Abundant orders, the wood enterprises boost investment

	Orders for wood product exports soar
	Exporting wood to new opportunities
	3 groups of radical solutions, ensuring raw materials for wood industry

The foreign enterprises explore the Vietnam's wood products at Vifa Expo 2019

Full of orders

According to the statistics of the General Department of Customs, in the first 2 months of 2019, Vietnam's wood and wood product export turnover reached nearly US$ 1.4 billion, up by 13% over the same period in 2018. In which, only wood products reached US$ 998 million, increasing by 15.6%. This result shows a bright prospect for Vietnam's wood exports in 2019.

Talking to the reporter of the Customs News, many wood processing enterprises said that they had full orders signed until the end of 2019. Mr. Nguyen Liem, Chairman of Board of Lam Viet Company said that since the end of 2018, the company received enough orders until the end of 2019. Even at the Scancia Pacific Company, Mr. Nguyen Chien Thang, General Director said, not only had they received enough orders until the end of the year, but also the number of orders this year increased 30% more than 2018. In which, the US market has the strongest increase, up by 30%. Mr. Nguyen Chanh Phuong, Vice Chairman and Secretary General of Ho Chi Minh City's Fine Arts and Wood Processing Association (Hawa) also said that the customers from the US also ordered the products that are not traditional Vietnamese ones, like kitchen furniture with items with high industrial properties...

With a strong increase in orders, many wood processing enterprises have invested in technology change and production expansion. Mr. Thang shared, Scansia Pacific had started expanding investment with capital of up to several million US dollars since 2018. Similarly, the AA Construction Architecture Joint Stock Company has just imported a wood processing machine costing more than US$ 1 million to meet orders requiring high industrial quality. Mr. Huynh Quang Thanh, Director of Hiep Long Company said that the company was investing in many modern equipments, with good technology and productivity to replace old and outdated equipment.

Mr. Huynh Van Hanh, Vice Chairman of Ho Chi Minh City Fine Arts and Wood Processing Association said that Vietnam's wood export activities had many advantages in 2019. In which, Vietnamese wood enterprises had been able to actively source raw materials from the domestic plantation timber. In 2018, the wood industry used over 27 million m3 of timber from domestic plantations, accounting for 75% of the total raw materials for wood processing, the remaining 25% was imported wood. Although from January 1, 2019, the Law on Forestry began to take effect, but from 2018, the enterprises began to prepare by shaking hands with people to plant the forests. This was a premise to implement the Law on Forestry and domestic wood materials had created a huge competitive advantage for the Vietnamese wood products and improved people's lives. In particular, Mr. Hanh also informed that many processing enterprises had embarked on expanding investment thanks to the Government's interest in the wood industry today. "According to the information I have learned, there are currently 6 member companies of HAWA expanding their investment with a capital of about 140 million euros" – Mr. Hanh said.

The bright prospect of Vietnam's wood processing industry was also reflected in the interest of international customers at the Vietnam Export Furniture and Arts Fair - Vifa Expo 2019, which took place over the last weekend. It was estimated that the fair attracted 5,000 visitors in only 4 days. In which, the visitors came from 80 countries and territories.

Compete with the world's top rivals

In the context of opportunities, Mr. Dien Quang Hiep, Chairman of Binh Duong Wood Processing Association, General Director of Mifaco expressed his concern about the consumption capacity of Vietnam's wood processing industry. Specifically, after 20 years of development, Vietnam's wood export turnover had reached over US$ 9 billion. Recently, the Prime Minister had made a request for wood export turnover to reach US$ 20 billion by 2025. “So, in the next 7 years we have to go on an even longer journey than the one 20 years ago. This proves that the scale of the wood processing industry is increasing dramatically. To respond to such a scale, a process is needed. Because even labor productivity cannot be increased immediately,” said Mr. Hiep. Accordingly, Mr. Hiep said that it was necessary to build a concentrated industrial zone for wood processing industry so that the enterprises could concentrate on creating a resonant power, thereby improving labor productivity instead of focusing on the current expansion of the factory scale.

Besides, Vietnam also needs a large-scale exhibition center to display and introduce goods to the international customers. Despite the SECC Exhibition Center in Ho Chi Minh City has top national scale, but it has also become too narrow compared to the actual demand. Specifically, at the last Vifa Expo 2019, the exhibition area only occupied a small part of the size of the fair, and most of the booths had to display in tents, which affected greatly the image of the Vietnamese wood processing industry in the eyes of international buyers.

Mr. Hiep is also concerned that in spite of the rapid growth in recent years, Vietnam still ranked fifth in the world in timber exports. "Vietnam is still competing by volume, while the developed countries like as Germany, Italy and Poland compete with added value products, that is, they invest in design and brand" - Mr. Hiep said. Accordingly, if solving this problem, the growth rate of Vietnam's wood industry will be even stronger and the development will be really sustainable.

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Meanwhile, with a more optimistic look, Mr. Nguyen Chien Thang, General Director of Scancia Pacific Company shared, in 1992, he had the opportunity to visit a Malaysian wood processing factory, at that time, the wood export of Malaysia had reached nearly US$ 1 billion, and he saw the Malaysia's factory scale and machinery system was his dream. But now things have changed completely, the Malaysian enterprises look at some Vietnamese enterprises as their dream, because Vietnam's wood processing industry had developed beyond all Southeast Asian countries. At present, the market of Vietnamese wood products had reached 120 countries and Mr. Thang was confident that the Vietnamese furniture exported to any market would hold firm there.

For the leading exporters such as Germany, Italy, Poland, Mr. Thang shared that the these counties’ products are highly industrialized with nearly 100% automation level, so Vietnam had not competed fully yet. Currently, Vietnam only competed in the goods that need to be skilled by the workers. “However, many Vietnamese enterprises have imported modern machines and equipment to target this segment. Therefore, in the near future, Vietnam will be able to compete in this segment, because the management and factory costs in Vietnam will be much cheaper than in these developed countries,” Mr. Thang emphasized.