Wooden products made for export at the Hiep Long Fine Furniture Company in Binh Duong Province. Viet Nam's wood processing sector faces high market risks due to its dependency on imported materials. — VNA/VNS Photo Thanh Vu

HA NOI (Biz Hub) — With its dependency on imported materials and export markets' stringent norms on the origin and legality of products, Viet Nam's wood processing sector is facing high market risks, said an expert.

The growth of wood chip processing and exports are also threats to the wood processing sector, as raw material for both sectors are sourced from Vietnamese wood. Up to 80 per cent of domestic raw material is currently used for wood chip processing, according to To Xuan Phuc of the Forest Trends organisation.

The expert noted that during a conference on the role of imported materials and orientations for the wood chip processing sector, in Ha Noi yesterday, many wood processors agreed that exporting wood chips brought about modest socio-economic efficiency.

However, wood chip processors at the event argued that the expansion of wood chip processing has stimulated the protection and growth of forests and improved the livelihood of millions of families who live on forestry.

Participants at the conference also discussed state policies related to the management and development of forest resources for reducing the dependence on imported materials by limiting the export of wood chips as well as by growing more and more large trees.

Supporting the policies, Phuc argued that they enhance the value of export products and improve the incomes of forest planters.

However, he suggested that, more saplings and capital should be supplied to support and encourage farmers to plant large wood trees.

Le Cong Can, Director of Cat Phu Vung Tau Company, held that the policy of planting forests and increasing technical support for export products are on the right track and need to be supported.

Nevertheless, any increase in wood chip export tariffs will affect those dependent on forestry, he said, adding that new policies should be designed to foster forest development and productivity.

They also stressed the need for in-depth studies on whether to prioritise the wood processing sector or the wood chip processing sector.

Vietnamese wood products are currently available in 120 countries and territories. Last year, the country imported 2 million cubic meters of sawn timber and 1.4 million cubic meters of log timbers from 115 countries and territories.

The total wood import value of Viet Nam, a world wood processing centre, reached US$1.72 billion, or 27.5 per cent of total export value of wood and wooden products.

The country plans to reduce wood chip exports to 3 million tonnes in 2020, or a drop of 50 per cent from 2015. — VNS