Vietnam Wood Industry Seeking New Direction
According to managers and enterprises in the wood industry, Vietnam has developed into the fourth biggest wood product exporter in ASEAN, following Malaysia, Indonesia and Thailand (and the second biggest exporter of processed wood). At present, Vietnam’s wood enterprises have changed from passive attitude when waiting clients for models and order to pro-active manner when trying to access the world market to seek for business opportunities via fairs and exhibits in other countries. Many enterprises have taken pro-active action in design, offer and set up storage system for direct sale to oversea supermarkets... Vietnam’s wood export markets has extended to 120 countries and territories, mainly to the US, EU and Japan. The biggest is the US market, accounting for 41 percent of Vietnam’s wood export volume, followed by Japan with 12.8 percent.
It can be said that Vietnam’s wood industry has great potential as despite its position among Vietnam’s leading export industries, Vietnam’s wood products now account for only 0.78 percent of the global market share. So far, China is considered as the most redoubtable competitor of Vietnam in term of wood processing, having the leading position in wood product export to US. However, China’s wood products are now applied the highest anti-dumping tax in US market. Therefore, importers tend to seek and import products from other markets at lower price like Vietnam. Experts say this is really an opportunity for the development of Vietnam’s wood processing industry in the time to come.
Despite a lot of advantages for development, Vietnam’s wood processing and fine art industry is, like other industries, facing with series of difficulties and severe challenges, especially the impacts put by the international economic crisis. Recent new regulations provided by the two export markets, US and EU, such as the FSC requirement, have posed barriers to Vietnam’s wood product exporters. In addition, the 80 percent dependence on imported materials has brought about a lot of difficulties in entering these two big markets. Many enterprises say the application of 10 percent duty on imported materials and of Circular No. 32 relating to VAT refund provided by the Ministry of Finance has posed difficulties to enterprises in the wood industry.
In spite of their appearance in 120 countries and territories, the main channel of Vietnam’s wood products export is via go-between (accounting for 90 percent of the products) and via processing activities under models of and contracts with foreign partners, then export enterprises become passive and dependent in this channel while fail to create a hallmark of “Viet Wood” in the world market. Vo Truong Thanh, Director of Truong Thanh Wood Group in Binh Duong said that setting up a oversea retail system would be a chance for enterprises in the wood industry to get to know about the market and create strong and long-term sale capacity. However, Vietnam’s enterprises have been yet affordable to do so.
Vietnam’s wood product export turnover by the end of November 2008 was only US$2.3 billion, thus, as likely as not, the UD$3 billion targeted by the end of the year shall be fulfilled. Additionally, under a sketchy research by the Southern Economic Research Institute conducted in 2008, the recession has led 20 percent of the enterprises in the wood industry to bankruptcy. Seeing the current difficulties, many believe that the wood industry picture in the year to come shall not be much brighter.
