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Wood industry needs domestic forests
Growing more forests for commercial exploitation was a key measure required to ensure sustainable development of the wood processing industry, insiders said.
Though the industry had achieved consistently high growth rates, it had been undermined by an overwhelming reliance on imported timber, they said.
There are around 2,000 firms employing 250,000 workers in the country, located mainly in HCM City and Binh Duong, Dong Nai and Binh Dinh provinces.
More than 500 of the firms are involved in furniture export, with the US, the EU and Japan being their biggest buyers.
Viet Nam has become an important furniture exporter - exports were worth US$2.4 billion in 2007 and $2.8 billion last year.
But the industry imports timber worth $1 billion every year, one of the world's highest.
Deputy Minister of Agriculture and Rural Development Hua Duc Nhi said 80 per cent of the raw materials used by wood processors was imported.
This has increased their production costs and, thus, affected their competitiveness.
The situation took a turn for the worse recently when timber prices rose but furniture prices dropped sharply.
Dam Ngoc Nam, deputy director of the Department of Agro-forestry Products Processing and Salt under the Ministry of Agriculture and Rural Development, said the most vital task for the industry now was to ensure a stable supply of raw materials.
In the long term, he said, the Government should have policies to encourage commercial forestry to secure timber supply for processors.
He was referring to incentives like cheap loans and low rentals for growing timber forests.
Truong Thanh Furniture Corporation (TTFC) was the pioneer in the country in growing timber for commercial exploitation.
Its chairman Vo Truong Thanh said the firm had two subsidiaries growing 100,000ha of timber to feed its seven wood processing factories nationwide.
The forests were in the provinces of Dak Lak, Dak Nong and Phu Yen, he said.
TTFC, which exported 5,000 containers of furniture for $50 million last year, only had to import a modest quantity of timber for its needs.
Other weaknesses
Nam said the Government also needed to reorganise the wood processing industry to fully exploit the country's potential.
Experts have identified outdated technologies, lack of skilled workers and poor promotion as other major problems dogging wood processors.
Nam stressed the need for the industry to step up investment in technologies and equipment to increase their competitiveness and product quality. Furniture exporters should also turn their focus to the domestic market of more than 80 million people, he added.
VietNamNet, Viet Nam News
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