The wooden industry is confident with a target of US$ 9 billion

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• The wooden industry

The Vietnam wooden processing industry is facing great opportunities in terms of the trend and market as well as the potential production of the domestic enterprises. Unless grasping promptly, Vietnam will lose the market to other countries in the region.

Wood enterprises are very optimistic about the situation in 2018. Photo: N.Hien.

Do not worry about the materials

In 2018, Vietnam aims to export wood, wooden products and non-wooden forest products to attain US$ 9 billion. (For 2017?) in particular, wood and wooden products (reached?) US$ 8.6 billion. Mr. Huynh Van Hanh, Vice President of Handicraft and Wooden Processing Association of Ho Chi Minh City (HAWA), said that the wooden production areas had not increased except in Asia-Pacific areas in recent years, so the global competition pressure did not increase. Meanwhile, the demand by the furniture market in the world had grown sharply. Therefore, this would be a very good opportunity for Vietnamese wood enterprises to reach a higher potential in the market.

Regarding the raw materials for wood processing, Mr. Hanh insisted to not worry. Accordingly, after the end of the 5 million hectare reforestation project, about 1 million hectares of forest were planted newly each year.

In addition, Vietnam had over 1 million ha of rubber trees, supplying 2.5-3 million m3 of wood each year. At the same time, fruit trees also provided over 1 million m3 of wood per year. This was a legal source for the wooden processing industry. According to Mr. Hanh, the import of raw wood had just enriched the market, created more choices for the consumers and replaced gradually the habit of using precious wood. In 2017, the wooden timber industry had achieved US$ 9 billion, of which US$ 1 billion was spent domestically. However, imports of wood and wood materials had just amounted to over US$ 2.1 billion, including nearly US$ 2 billion of raw materials and US$ 190 million of wooden products. Thus, most of the materials used for wood processing over time were taken from the domestic sources.

The wooden enterprises were also very aware of the responsibility to explain the origin of legal wood. By the end of 2017, Vietnam had 732 enterprises that were certified as the Chain of Custody (CoC/FSC), leading the Southeast Asian region. Of these, 24 enterprises were certified for sustainable forest management with a total area of 173,000 ha. It showed that the wooden processing industry has demonstrated sustainable industry development without affecting the area of natural forest.

The orders are bustling

According to Mr. Hanh, through the information from wooden processing enterprises, at the present time, the order situation for enterprises was very positive. Most of the enterprises had orders for until the end of June 2018, even some enterprises, such as the Cam Ha Company (Quang Nam) had orders for the whole year. Mr. Nguyen Chien Thang, General Director of Scansia Pacific Company said that his company had enough orders for the whole of year 2018. “Scansia Pacific is currently not worried about the shortages of orders, but only worried that production could not meet progress,” said Thang. In particular, in 2017, Scansia Pacific's production volume increased by 25% over 2016, and this year, the orders received from partners also increased by 30% compared to 2017. With large orders, Mr. Thang said that this was a good opportunity for the enterprises to reorganize production, improve processing.

Mr. Hạnh noted that enterprises would do well to attend to 3 conditions to take advantage of internal strengths and the advantages of turning opportunities into business results. Firstly, in terms of investment, enterprises should promote investment in technology innovation to solve the problem of productivity, competitiveness and stability of product quality. In addition, it is necessary to focus on product design to improve added value. In addition, because Vietnamese wooden enterprises had also come from small enterprises, the management process was unsystematic and weak in many stages, so it was necessary to focus on improving management skills.

Secondly, in terms of products, enterprises should focus more on mid and upper-end market. The products need to be multifunctional, serving young consumers living in tight living spaces in modern cities. Thirdly, about the market, there should be a national communication strategy to confirm that Vietnam is a wooden producer using lawfully compliant production methods. Along with that, besides the old markets, it is necessary to expand the exploitation of some new markets where Vietnam wooden products are still absent from, such as Africa, and some countries that Vietnam has recently signed trade agreements with.

By Nguyen Hien/ Binh Minh