Vietnam textile firm bets on eco-friendly products
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For price conscious Vietnamese consumers, an organic product more expensive than its normal version is not an attractive option, but one firm has decided to be persistent.
The Phong Phu Textile and Garment Company introduced its made-in-Vietnam eco-friendly towel brand last December, attracting media attention as one of the first firms in the country to produce an organic textile product.
The Mollis Organic towels are made from 100 percent organic cotton. No genetically modified organism, chemical fertilizer or pesticides are used in the making of this product, the company asserts.
The company would strive to bring organic products to its customers although their production costs are high and profits uncertain, Pham Xuan Trinh, CEO of the Phong Phu Textile and Garment Company said.
The company prices its organic towels from VND60,000-250,000 ($2.62-$10.91) depending on the size, about 20 percent higher than conventional products, while made-in-China towels are sold for just VND15,000 ($0.65).
Since awareness of the importance and advantages of organic products is relatively low among a majority of Vietnamese consumers, Phong Phu is struggling to sell its organic towels to local customers.
“We’ll continue to invest in organic products despite low profits with the hope that one day Vietnamese customers will see the true value of organic products,” he said.
The company spent VND4 billion ($174,600) last year on research and development for its organic products.
As Vietnam’s conditions are not currently suitable for growing organic cotton, the company imports its material from Bangladesh, India and Israel. The processing and manufacturing processes happen in Vietnam.
The company has so far exported its organic towels to Japan and South Korea, aiming at the high-income customers in these countries.
Phong Phu recorded a profit of VND149 billion ($6.5 million) in the first half this year, a growth of 7 percent from the same time last year, but most of it came from conventional non-organic products, including towels and denim jeans.
Questions & Answers
Q.What is Phong Phu's main challenge in selling its organic towels in Vietnam?
What is Phong Phu's main challenge in selling its organic towels in Vietnam?
Phong Phu struggles to sell organic towels to local customers because Vietnamese consumers have low awareness of the importance and advantages of organic products. Price-conscious consumers also find the more expensive organic options unattractive.
Q.Where does Phong Phu source the raw materials for its organic towels?
Where does Phong Phu source the raw materials for its organic towels?
As Vietnam's current conditions are unsuitable for growing organic cotton, Phong Phu imports the material from Bangladesh, India, and Israel. The processing and manufacturing of the towels then take place in Vietnam.
Q.To which international markets has Phong Phu exported its organic towels?
To which international markets has Phong Phu exported its organic towels?
Phong Phu has exported its organic towels to Japan and South Korea. The company is specifically targeting high-income customers in these countries with its organic product line.
Q.How much more expensive are Phong Phu's organic towels compared to conventional products?
How much more expensive are Phong Phu's organic towels compared to conventional products?
Phong Phu prices its organic towels at approximately 20 percent higher than conventional products. For example, they range from VND60,000-250,000, while conventional towels cost significantly less.