Sunday, October 23 2016


Timber industry may flounder later in year

Update: August, 08/2015 - 09:10

The General Department of Customs reported the industry had gained a year-on-year increase of 8.4 per cent in total export value to reach US$3.7 billion. — Photo vov

HA NOI (VNS)— Viet Nam's wood industry gained growth in its export value in the first seven months of 2015 but will have difficulty maintaining this growth until the year end, according to experts.

The General Department of Customs reported the industry had gained a year-on-year increase of 8.4 per cent in total export value to reach US$3.7 billion. The US, Japan and China were the three largest export markets for Vietnamese wooden products, accounting for 66.3 per cent of the total export value.

Nguyen Ton Quyen, deputy chairman of the Viet Nam Wood and Forestry Product Association, said the domestic wood industry had achieved strong growth since 2000, seeing a surge in total export value from $294 million in 2000 to $6.2 billion in 2014, with an average growth rate of 15 per cent each year.

This year, the industry expected to gain a total export value of $7.2 billion, Quyen said, and Viet Nam would become the fourth largest exporter in the world market, after China, Italy and Germany.

The good results for exports were attributable to the high quality of the wooden products which were processed from legal timber, he said. Over the past year, many wooden product importers have ordered Vietnamese wooden products instead of importing from China due to the high labour cost in China.

Local enterprises had made use of this advantage to expand their export markets, increase production capacity and produce value-added products from local materials, Quyen said.

In addition, high demand on the world market and free trade deals were expected to increase chances for local wood producers to further expand their export market, he said.

Demand for wooden products in traditional markets, such as South Korea and the European Union, and also in large markets, such as the US and Japan, increased during the first seven months of this year.

So far, many local producers had signed contracts to produce more goods by the end of this year, he said.

In the near future, the top five export markets for Vietnamese wooden products would be the US, Japan, China, South Korea and the European Union, Quyen said.

However, enterprises continue to face many challenges in achieving further growth in exports, such as the complications of exchange rates and the unstable supply of raw materials.

Phi Manh Cuong, deputy general director of Viet Nam Forestry Corporation (Vinafor), said the European Union was one of the country's largest export markets but the reduction in the value of the Euro price had made foreign importers cut imports of Vietnamese wooden products and had even forced local exporters to reduce their price.

Rising dollar

Meanwhile, the rising value of the US dollar had driven up the cost of imported raw materials, he said, so enterprises had made little profit or had even suffered losses if the company could not recover its production costs.

In addition, local producers import 70 per cent of their raw materials while input costs of coal, electricity and water continue to rise. As a result, competition for Viet Nam's wooden products is lower than for products from other countries, such as Myanmar, Malaysia and Indonesia.

Quyen said the agricultural ministry had developed forests to ensure an adequate supply of raw material. — VNS

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