Export wood: full orders but lack of raw material

This year, the export of forest products is expected to reach 9 billion USD. Picture: N.anh.

80% of enterprises have full orders

According to the Ministry of Agriculture and Rural Development, the turnover accumulation at the end of April for wood and wood products export is estimated at $ 2.6 billion, up 7.3% over the same period in 2017. The United States, China, Japan and Korea are the four largest markets of wood products importers from Vietnam in the first 3 months, accounted for 77.8% of the total value of wood and wood products. The markets with strong export value were South Korea (44.8%), France (22.8%) and the United States (10.8%).

Mr Nguyen Ton Quyen, Vice Chairman cum General Secretary of Vietnam Association of Wood and Forest Products (Vifores), said that the target for export of forest products was 9 billion USD this year, of which $ 8.6 billion is wood, the rest are other items such as rattan, bamboo, etc. This figure increased about $ 1 billion compared to the previous year. The export enterprises are quite active. "Up to now, 80% of enterprises have signed export contracts until the end of the year. For example, in the North, Woowsland JSC, Nam Dinh Forest Products Joint Stock Company (Nafoco) has signed 100% export contracts this year. This year's Woowsland export is about $ 55 million, Nafoco is about $ 40 million. In the central region, companies such as Tien Dat, Dai Thanh, Phu Tai ... have reached about 80% of export contracts in 2018. In Binh Duong, 100% of Vietnamese enterprises have signed contracts to export goods for the whole year "said Quyen.

Although export growth has been good, import of wood material has also been increasing. The Ministry of Agriculture and Rural Development shows that in the first four months of this year, Vietnam imported $ 698 million, up 2.5% over the same period in 2017. In the first three months of this year, import value of wood and wood products in most of the major import markets increased over the same period in 2017, except for Cambodia (down 56%), Malaysia (down 5.4%) and New Zealand (down 2.1%). Mr. Quyen commented that from now until the end of the year and in the next phase, the biggest difficulty for the wood industry is lack of raw materials. "According to calculations, exports increased by 1 billion dollars, the volume of raw materials increased by 3.5 million m3. Domestic wood and planted wood only satisfies about 10-15% of requirements. Each year, domestic timber exploits about 18-19 million m3, only 2-3 million m3 of wood furniture, the rest are chips, artificial boards ..., the rest are imported," said Quyen.

Take the raw material

To solve the problem of wood materials for processing and export, according to Mr. Quyen there are three main solutions. Firstly, Vifores recommends the State minimize export of raw materials, in particular chips. In 2017, export of chipwood was about 8 million tons, accounting for 12 million m3 of wood. The government should limit exports for timber for different purposes.

From the perspective of enterprises, the solution is that enterprises must use new technology to save on fuel consumption. Previously, 1 m3 of wood used 60-70% for furniture products, the cost saving effort should be increased. Currently, the model for drying sawn timber has been built in Tuyen Quang area with a total investment of about 132 billion, and it is expected to be inaugurated in November. Accordingly, the drying model and automatic cutting will increase the productivity of wood material to increase by 1.5 times. For example, one meter of sawn timber uses 60% of the wood, in the past it used to be 70%. "The third solution is to make the most of domestic raw materials such as rubber wood, home garden, fruit tree ... To do this, it is necessary to have support policies of the State, as the State should not interfere too deeply in transport and origin of wood ..., " said Mr Quyen.

Relating to the story of wood export, approaching from another angle, representatives of the Association of Wood and Wood Processing HCM: Compare the total trade of furniture of 100 exporting countries, Vietnam accounts for about 6%. This shows that Vietnam’s starting point is very low while the market opportunities are still very good, the ability to increase market share is very high. In order to increase orders, besides enterprises self-upgrades of products, productivity, quality, management level and competitive prices, the Government should have trade promotion programs associated with advertising measures of the brand name, "Vietnam is the world's wood furniture factory for legal and sustainable wood." Accordingly, the trade promotion agency coordinates with trade counselors to create programs and invite potential partners, especially markets where the government has just signed a free trade agreement (FTA). The leading companies have many new products and potential exporters will cover the cost to participate in promoting the product to the right audience to look for large orders for many small businesses.