Wood processors log continued growth

Monday, Aug 18, 2014 08:33

Viet Nam has more than 3,000 businesses in the sector, the majority being small-and-medium sized firms.— Photo cafef.vn

HA NOI (Biz Hub) — The wood processing industry is expected to earn an export turnover of US$20 billion by 2020, experts said.

Nguyen Quoc Khanh, chairman of the Handicrafts and Wood Industry Association of HCM City (Hawa), was reported as saying by the online Business Forum newspaper that Viet Nam is the sixth largest exporter of wood and wood products in the world, after the US, Italy, Germany, Poland and China.

The sector has had surprising growth. Several years ago, the industry had a yearly export turnover of just $200 million, compared with Malaysia and Indonesia which has export turnovers between $1.5 billion and 1.8 billion.

Khanh said the sector's achievements meant that the Vietnamese firms learned the ropes quickly and expanded their markets.

The industry should move toward big profits, high surplus and had many opportunities to achieve its targets, he said.

Viet Nam has more than 3,000 businesses in the sector, the majority being small-and-medium sized firms.

The companies believe that their scale should not be seen as a disadvantage as it allows them to be flexible and adaptable, instead of large firms which have higher costs.

In addition, the industry has higher productivity than garment and textile, leather shoes and seafood sectors, even though it uses fewer labourers. The annual productivity in the wood processing sector would be $18,320 per person, while those of the above-mentioned industries are $7,156; $13,943 and $8,978 respectively.

The domestic wood processing sector has been highly valued by international groups and organisations. The interior woodwork and design of two of the largest hotels in Egypt, namely Le Gray – Lebanon and Sofitel Legend Old Cataract Aswan, have been produced by Viet Nam's AA Construction and Architecture Company.

Hawa chairman Nguyen Quoc Khanh added that Viet Nam would become a production centre of interior-design products as the country's wood products are sold in 120 countries. "Vietnamese wood products attract interest in the world because they are environment friendly," he said.

The sector also sees an opportunity in meeting the market demand of the 90-million-strong domestic population and the huge 600-million-strong ASEAN population.

Khanh said that Vietnamese wood processing firms should not only aim for high productivity, but also appropriate management and machines to achieve their target.

The sector had not had the right conditions to improve the quality of its machines, which would enable it to transfer technology and support human resources training, despite having big opportunities.

Khanh suggested that the Government should consider allowing enterprises in the wood processing sector to import used machines to take advantage of cheap prices.

Pham Thi Thu Hang, general secretary of Viet Nam Chamber of Commerce and Industry (VCCI), agreed, adding that the industry should build a brand name by improving and diversifying products.

Hang said the opening of the ASEAN market would increase competition in the sector in the region.

The sector had three important advantages, namely wood products, bamboo and products for interior decoration. These should be built as brands through trade promotion, marketing, branding with modern and high-end designs and improved value-added products, she said.

She added that better value-added products would bring more export orders for the firms. — VNS

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