Experts log potential of Vietnam wood - Experts log potential of Vietnam wood - Website Ho Chi Minh City
The wood processing industry has a huge opportunity to expand its markets both at home and abroad in the coming years, a seminar heard in Ho Chi Minh City on August 7.
It has enjoyed average growth of 15-25 percent for the past 10 years, with exports increasing every year, Nguyen Quoc Khanh, Chairman of the Handicrafts and Wood Industry Association of HCM City (Hawa), said.
It earned 5.7 billion USD from exports last year, a year-on-year increase of 19 percent.
Vietnam is among the 10 largest wooden products exporters in the world, but accounted for only 1.2 percent of the world's total consumption of 440 billion USD last year, and can increase its market share, he said.
With a population of 90.3 million, the domestic market too offers a great opportunity, he said.
Phan Chi Dung, director of the Ministry of Industry and Trade's Light Industry Department, said profits from exports remained low due to a reliance on imported wood and low value addition.
Small scale of production, high costs, and limited design capacity were among the reasons for the low value addition, he said.
Pham Minh Duc, a senior economist at the World Bank, said low labour productivity was another hurdle for the industry.
Improving workers' skills was vital and could be done by strengthening links between vocational schools and businesses and reforming training programmes to meet the industry's practical needs, he said.
Khanh said the industry wanted the Government to add it to the list of strategic industries in the next 10-20 years to provide incentives in terms of tariffs, customs, and credit to help boost exports and develop further.
Its development would stimulate the growth of supporting industries, creating more jobs, he said.
Delegates agreed that to ensure sustained development of the wood processing industry local sources of timber have to be developed and the dependence on imports reduced.
Nguyen Chien Thang, former chairman of Hawa and managing director of Scansia Pacific Company, said the Government should provide long-term loans to enterprises for acquiring modern technologies from Italian firms, many of which had closed down due to the economic crisis.
This would help them improve productivity and quality, he said.
Businesses and farmers should co-operate for planting forests so that the latter can cut down trees after 8 or 10 years instead of three as they do now for sawdust.
This would eliminate the shortage of timber, he added.
The ministry's Dung said local companies should focus on developing their brands and distribution networks and invest more in design.
Businesses should co-operate to share market information and undertake large export orders, he said.
If the industry took appropriate development measures and got support from the Government, wood product exports could increase to 20 billion USD in the next 5-7 years, Thang said.
They have been worth 3.35 billion USD so far this year, a 13.4 percent rise year-on-year.
Vietnam exports furniture to 120 countries and territories, with the US , China , Japan , the Republic of Korea , and the UK being biggest buyers, he said. The seminar was organised by Hawa, the Vietnam Chamber of Commerce and Industry, and VPBank.