Vietnam: A Ranking Wood-based Products Exporter

 

According to statistics, Vietnam has 1,200 wood processing and trading enterprises, including 300 exporters. Vietnamese wood-based products have been exported to 120 countries, mostly in the US, EU and Japan. As the first condition for the development is market demand. Currently, the world demand continues to increase, while Vietnamese market share is only 1 percent in the world market. With WTO membership, Vietnam can have better conditions to expand the markets. The problem now remains with Vietnamese businesses themselves.

 

Another advantage is the skill and workforce, especially Vietnamese artisans. As a matter of fact, 80 percent of Vietnamese wood-based exports are processed products. Success stories of Vietnamese enterprises such as AA company (HCMC) in Europe and US have shown that Vietnamese producers have met the demand of modern customers. Vietnam has three wood processing centres : HCMC-Binh Duong, Binh Dinh-Central Highlands and Hanoi-Bac Ninh. Hanoi-Bac Ninh centre is better known for wooden fine art articles.

 

Unlike expansion in the past, Vietnamese wood processing enterprises now concentrate on indepth development with modern equipment and technology, high quality and expanding to new markets. They continue to diversify and increase added value of their products with various kinds of materials (aluninium, stainless steel, bamboo, rattan, cloth, etc.). Many enterprises have increased their workforce to some thousand people to meet the orders. For instance, Truong Thanh Wood Processing Company, one of the three biggest companies in Vietnam (100 percent Vietnamese capital) is expected to increase its export turnover to US$60 million in 2007 and domestic consumption of VND200 billion.

 

In addition to local enterprises, 300 FDI enterprises with financial strength and dynamism have contributed over 50 percent of Vietnamese wood processing turnover. Kaizer Company (100 percent Taiwanese capital) has expanded the production, increased working capital and exported 1,000 containers a month with export turnover of US$60 billion in 2007.

Although wood processing turnover in the past increased 50-80 percent a year, in 2007 it slowed down (increased only 25 percent) and the second year in a row as 80 percent of timber are imported and the price increased 40-100 percent compared to 2006. The shortage is also in human resources (managers and skilled workers). Vietnam has five training schools but only one school training in fine art articles and the remaining for forestry exploitation.

 

Distribution groups such as CANFORD (Canada), WALLMART, COSCO, HOMEDEPOR (US) operating in HCMC disclosed that they are entering Vietnamese market and will buy with big contracts. Therefore, Vietnamese enterprises must ensure good quality and delivery on schedule. According to CAREFOR representative (France), EU customers highly value Vietnamese indoor and outdoor wooden furniture. However, they want Vietnamese products are environment friendly and in compliance with the agreements and without delay. Besides, the cooperation between Vietnamese exporting businesses remains low. Only big businesses engage in trade promotion and trade fair while thousands of small businesses do whatever they like.

 

Economists believe that to ensure a sustainable development of Vietnamese wood processing industry, meeting big orders of foreign markets, and avoiding anti-dumping technical barriers, Vietnamese businesses must together find and import the resources, reducing spending and intermediary. At the same time, the provinces must develop planning and leasing land to businesses for aforestation, encouraging and promoting farmers, and registering forest areas as wood processing industrial zones.

 

The wood-processing industry must set up timber distribution centres in Dong Nai, Binh Duong, Binh Dinh, Bac Ninh and open schools training, first of all, workers and managers of grass-root level and later on high-level human resources to meet development demand. The enterprises must be encouraged to increase investments in equipment and technology to upgrade their productivity and product quality, trade promotion and trademarks.