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Wood products go against the grain
"Viet Nam has an opportunity to expand exports of wood products despite the ongoing economic crunch," delegates said at a conference yesterday.
The assertion came as the conference discussed the pressing question of retaining and developing export markets for the wood processing industry and ensuring its stable development.
The wood processing industry has enjoyed strong growth over the past 10 years, with export value increasing every year, said Nguyen Chien Thang, chairman of the Handicrafts and Wood Industry Association of HCM City.
The country earned US$3.9 billion from the export of wooden products in 2011, a year-on-year increase of 15.1 per cent. The US, EU, Japan and China have been the main import markets for Vietnamese wooden products, he said.
"In the current economic downturn, demand for wood products has been shrinking globally, but compared to other countries, Viet Nam still has opportunities to boost exports," delegates said at the conference.
"China was not encouraging furniture production and has imposed high export taxes, Italy and Germany are closing furniture factories due to the crisis, and Malaysia does not have enough labour for the industry," they said, adding this gave Viet Nam a window of opportunity to increase its market share.
"Currently, Viet Nam's furniture export value accounts for just 2.68 per cent of the total figure of 70 furniture exporting countries," Thang said.
"If the industry undertakes appropriate development measures and gets effective support from the Government, wood product exports can increase to $15-20 billion in the next 10 years," he added.
Conference delegates agreed that in order to ensure sustained development of industry, local material sources must be developed to reduce reliance on imported materials.
Nguyen Manh Dung of the Agro-Forestry and Fisheries Processing Department said the target was to source 60 per cent of raw materials from plantations with clear origin certification within the country by 2020.
Hoang Duc Doanh, head of the Forest Management Department of central Quang Tri Province, suggested that the Government draw up a plan to issue such certification within the country, instead of depending on international organisations, which is an expensive process. The Government and enterprises should support farmers in obtaining these certificates, he said.
Ha Cong Tuan, deputy minister of Agriculture and Rural Development, advised enterprises that besides boosting exports to traditional markets like the US, EU and Japan, enterprises should focus more on expanding their share in the domestic market.
Tuan said local firms should upgrade production technology to reduce costs and raise product quality, and to reduce export of raw material. He also called on businesses to co-operate instead of engaging in unhealthy competition.
Chad Ovel, general director of AA Corporation, said Vietnamese exporters should be more active in seeking importers by taking part in international trade fairs, and creating designs of their own. They should not just wait for buyers to come and produce products following the latter's designs, he said.
Demand for furniture products in the US market has started to recover in 2010 and continued to increase last year, said Giovanni Rojas of AmCham.
He asked local firms to conduct research on market demand and produce suitable products.
Harvey N Dondero, executive general director of Theodore & Alexander, also advised local exporters to take part in trade shows in the EU as well as visit outlets in European nations to understand the market better.
Regarding China, a big importer of wood chips from Viet Nam, delegates said the industry should consider appropriate measures to develop this market in the most effective way.
Thang petitioned the Government for favourable policies that would provide long-term loans for enterprises so that they could equip themselves with modern technology. This would help them improve productivity and quality, he said
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