The agriculture sector needed strategies to push wood export value beyond US$11 billion this year and to develop a production chain and value-added export products.

Prime Minister Nguyen Xuan Phuc made the statement at a forum on the wood processing and export industry in 2018 and seeking breakthrough solutions for 2019 held in Ha Noi on Friday.

According to the Prime Minister, wood export value growth had exceeded the target set for last year thanks to new designs, value-added product and branding.

The quality of the industry’s sustainable development would depend on the processing and export stages this year and beyond, Phuc said.

The PM said that in the next 10 years, Viet Nam must join the top 15 nations in terms of agricultural development and become a leading centre for processing and exporting wooden products to the world.

By 2030, Viet Nam was expected to hold 30-50 per cent of the global wooden product market worth $580 billion, instead of the 6 per cent it held now, he said.

In addition, Phuc said corporate and national brands for wooden products had not received enough attention so export value was not as high as expected due to the need to export via partners instead of directly.

Nguyen Quoc Khanh, chairman of AA Construction Joint Stock Company, said branding could increase value of a company by up to 50 times. However, corporate branding in the local wood industry was still very weak.

In the future, Vietnamese enterprises should change their way of thinking and build their own brands. To do that, the brand must be built based on the core values and identity of the enterprise. Customer satisfaction was an important asset and a core factor that built brand value for businesses.

Timber

PM Phuc said the timber industry was still unstable and needed a long-term strategy for market development.

Viet Nam had many timber enterprises but no major players capable of building a large-scale value chain.

Finally, the industry needed to continue focusing on designs and models as well as scientific research.

The PM said the Government would continue to listen to suggestions and recommendations from the business community and associations and then offer support through ministries and localities for businesses to achieve their goals of sustainable development and environmental protection.

The volume of local products to fastidious markets remained small. The industry should take advantage of existing and upcoming free trade agreements (FTAs) ​​to boost exports to key markets, Phuc said.

To achieve the goal of over $11 billion, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said the sector would effectively implement the Forest Law and compile regulations to implement new international commitments such as CPTPP and FLEGT-VPA for stable and sustainable development of the wood and forestry product processing industry.

The industry would also ensure a supply of about 37.5 million cu.m of materials for the wood processing industry by continuing to develop large forests according to international practices and criteria; and limit exports of raw wood, Cuong said.

The industry would also continue to improve productivity and the quality of forests while developing co-operation between enterprises and growers to ensure supplies.

In addition, Cuong said his ministry would maintain stable growth in existing markets and seek potential and emerging markets.

Speaking at the forum, Nguyen Ton Quyen, vice chairman of the Viet Nam Timber and Forest Product Association (VIFORES), said wood exports to CPTPP member countries would increase thanks to tariff cuts under the agreement. Enterprises would expand export markets to member countries such as Peru, Chile and Brunei.

Vietnamese enterprises would also be able to import raw materials from CPTPP member countries such as Canada and Chile to enjoy preferential rates when exporting furniture back to CPTPP member countries.

With the Forest Law Enforcement Governance and Trade Voluntary Partnership Agreement (FLEGT-VPA), Quyen said it would help Viet Nam to boost exports to the EU. Some countries were considering the recognition of FLEGT licences. This would be an opportunity for local businesses to expand their export markets. Viet Nam’s timber and wooden product export revenue would increase not only in EU countries but also elsewhere.

Duong Thi Tu Trinh, director of Thuong Nguyen Company, said local enterprises had only just got used to automated technology, or Technology 3.0, so they needed more investment in design as well as new technology in Industry 4.0 to increase their competitive advantage. Industry 4.0 offers new processing and manufacturing technologies.

Trinh said Vietnamese businesses could not afford to ignore the revolution. Modern technology in wood processing was a decisive factor in accelerating sustainable development. Workers would also be trained to use the new equipment, raising the quality of labour to create high-tech products.

She also said the State should have mechanisms to encourage the domestic machinery industry in developing equipment for the wood production industry. The State should also create favourable conditions in terms of capital and tax incentives for local enterprises to buy technologies from countries such as Germany, Italy and Japan.

Exports in 2018

According to the ministry, last year, Viet Nam’s wood and forest product export value reached $9.38 billion, accounting for over 23 per cent of the agricultural sector’s export turnover. The timber industry recorded a trade surplus of $7 billion.

At the forum, minister Cuong said the processing of wood and forest products for export had improved in scale, quantity and quality of production and business.

Viet Nam had about 4,500 wood and forest product processing enterprises, of which private enterprises accounted for 95 per cent.

Last year, the number of enterprises processing products for export reached over 1,800, an increase of more than 300 compared to 2017.

Vietnamese timber and forest products are exported to more than 120 countries and territories. Viet Nam ranks fifth in the world’s wooden product export market, the second in Asia and the first in Southeast Asia. — VNS