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Craft villages suffer cash crunch

Update: August, 18/2012 - 09:01

HCM CITY — Binh Nham handicrafts village in the southern province of Binh Duong has, since the beginning of this month, been unusually quiet as the continuing lack of funds to execute orders bit deeper.

Business for the wooden-clog-making village, like many other handicraft villages around the country, has been down for a while due to the cash crunch and rising raw material costs that it did not dare to accept many orders.

Hung Thai Company, which has a 2,000sq.m factory here, has been forced to cut its workforce from 200 during its heyday to 50 now.

Its director, Thai Van Anh Hung, said the company has signed deals for just 100,000 pairs this year compared to the usual 500,000.

In another handicrafts village in HCM City's Cu Chi District, bamboo-products manufacturer Thien Phu Company faces similar difficulties.

Nguyen Thi Ngoc Bich, its director, said her company used to export dozens of containers of products to Taiwan every month.

But it has exported only 30 containers so far this year, she said, because of a lack of funds to buy raw materials and pay salaries.

Nguyen Thi Cuc, chairman of Ba Nhat Co-operative in Binh Duong, said her organisation had partners from 40 countries and territories after 10 years of doing business, but was now losing many of these markets.

Most co-operatives do not have enough money now to buy raw materials, or get loans from banks since they have nothing to mortgage.

Luu Duy Dan, chairman of the Viet Nam Handicraft Villages Association, said many partners had parted ways with Vietnamese companies because the latter were no longer able to execute large orders.

"More than 80 per cent of handicraft villages and co-operatives cannot get credit because they have nothing to mortgage," he said.

As for the financial support fund, he likened it to "salt in the ocean," meaning its resources were too little to help.

Due to their lack of funds, handicraft companies only bought raw materials after getting orders, so if their costs increased suddenly they faced losses, he added. — VNS

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