Vietnam’s timber industry aims for strong growth | Business

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However, to achieve this ambitious goal, the wood industry must eliminate many bottlenecks in the supply of raw materials, higher labor productivity and better access to production technologies.

Growth objective

In the first three months of the year, Vietnam’s timber industry export revenue reached $3.94 billion, up 3% from 2021. furniture are now full of orders until the third quarter and some companies even have orders until the end of the year, because the global demand for furniture is still on the rise.

According to the calculations, if the average export value is maintained at around US$1.5 billion per month, the industry’s overall goal of reaching US$16.5 billion this year is quite achievable. In 2021, despite numerous difficulties due to the Covid-19 pandemic in the third quarter, the wood industry maintained its position among the country’s top export industries, at more than $10 billion. Specifically, the industry as a whole reached a goal of $14.8 billion, an increase of nearly 20% from 2020.

Reflecting on the development and growth of the timber industry over the years, Ms. Do Thi Thu Huong, a research team member from the Private Economic Development Research Board (Board IV), reported on “the ‘wood industry in Vietnam and strategic issues, guiding development solutions to 2030’, said that over the past ten years, the growth rate of Vietnam’s wood processing industry is among the Vietnam is currently ranked seventh in the world in terms of production of wood products and furniture, second in exports in the Asia-Pacific region and fifth in the world, with the main export markets being the United States. United, Japan and China.

Vietnam’s wood and wood products, as well as furniture, are continuously ranked in the top ten industries with the country’s largest export turnover. It is an industry that has generated the third largest export surplus in recent years, providing an important source of foreign currency to the country’s foreign exchange reserves. The woodworking and furniture manufacturing industries are major contributors to job creation, providing more than half a million jobs, ranking fifth in labor volume among the manufacturing and construction industries. the transformation.

Remove bottlenecks

Despite the rapid growth, the Vietnamese timber industry faces many problems, in which the supply of raw materials constantly faces huge bottlenecks that need to be removed so that the whole industry can develop in a sustainable way. According to statistics, currently the domestic supply of raw materials can only meet about 75% of the total processing demand, including the exploitation of cultivated forests and the extraction of scattered crops, and rubberwood.

Every year, Vietnam still has to import about 8.5 million cubic meters of wood, which accounts for 25% of the total volume of the wood processing industry. At first glance, 75 percent of domestic raw materials is no small amount, but the problem is that the certified forest area is only 8.4 percent of the country’s total cultivated forest area, covering about 307,000 hectares. . However, the area of ​​forest planted by households is mainly intended for kindling.

Domestic raw materials have not met the demand so far, and imported materials also face many risks, especially in the current volatile global situation. According to a survey by Council IV, in 311 private enterprises in the sector, only 10% of enterprises have signed long-term contracts of 36 months or more with domestic raw material suppliers, and about 7% of enterprises have long-term contracts. terms with foreign suppliers of raw materials.

Speaking about the fact that domestic companies have not encouraged linkages with household reforestation programs, Mr. Thang Van Thong of Hao Hung Group said there are currently only a few companies directly associated with households. who are allocated forest land, but this area is very small, only 1,000 hectares at most. Hao Hung Group is one of the few companies to be part of this program.

According to Mr. Thong, there are three types of land that are natural forests, namely, without biomass reserves; barren land; and lands located in forest companies in still very large provinces. With these land funds, if the association and Council IV can propose to the Government to change the mechanisms and policies to turn forest land into production, it will create a huge amount of timber, and after ten years there will be no no more concern for the raw material. areas. According to Mr. Do Xuan Lap, Chairman of the Vietnam Wood and Forest Products Association, in the forest development chain, the afforestation chain is the most efficient and cost-effective in the forestry and wood processing stages.

Labor issues

Mr. Nguyen Liem, chairman of the Binh Duong Wood Processing Association, said the workforce in Binh Duong province has currently been reduced by 100,000 people compared to the previous year. The reason is because of the Covid-19 pandemic when many workers returned to their hometowns. Today, many provinces and cities in the Mekong Delta and the center of the country have established industrial zones, which should attract workers to the locality for work. However, companies in the wood industry need to focus on solutions to improve productivity and invest in better equipment. Investing in equipment and machinery alone is not straightforward. For large factories, it is still possible, but for small and medium-sized factories, it is not easy to find additional investment capital.

According to a survey of 436 enterprises in Council IV, nearly 58% of production technology or machinery and equipment of enterprises in the wood processing and wood products industry and furniture manufacturing enterprises have a year of production dated circa 2010 or earlier. As for the workforce, out of a total of more than half a million workers working in the wood processing and furniture industry, only 55% are skilled workers, and the rest are rather untrained. or totally inexperienced.

Despite a rapid growth rate, the timber industry in Vietnam cannot avoid competition from neighboring countries such as China, Malaysia or Indonesia. Thus, for the timber industry to develop sustainably, the State and companies must work together to solve many problems, such as the policy of linking afforestation and the development of support industries; loan support policies; promote linkages between companies in the supply chain; and have an effective long-term human resources training strategy.

Saigon Investment

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