Chinese FDI overwhelming the wood industry, with low investment capital

VCN - In 2021, out of a total of 46 newly registered FDI enterprises in Vietnam's wood and forest product processing industry, 41 are from China. The average capital for business registration/enterprise is quite low, reaching only US$1.54 million.
More policies to support labor market recovery and development More policies to support labor market recovery and development
Mr. Pham Tan Cong, Chairman of VCCI: Sustainable development leads businesses to adapt and recover from the crisis Mr. Pham Tan Cong, Chairman of VCCI: Sustainable development leads businesses to adapt and recover from the crisis
FDI forecast to recover in 2022 FDI forecast to recover in 2022
Chinese FDI overwhelming the wood industry, with low investment capital
Enterprises in the wood processing and exporting industry in Vietnam want to be able to attract selective FDI with relatively new technologies. Photo: Nguyen Thanh

According to the latest information from the General Department of Forestry (Ministry of Agriculture and Rural Development), in 2021, the wood and forest product processing industry will have 203 newly registered enterprises, including 46 FDI enterprises.

Specifically, there are 41 enterprises from China (36 enterprises from Mainland China, five enterprises from Taiwan); three enterprises from South Korea; Canada and Finland each have one business.

Providing in-depth analysis of FDI enterprises investing in the wood industry in 2021, Bui Chinh Nghia, Deputy Director of the General Department of Forestry, said: The total registered capital of 46 FDI enterprises is US$71.6 million, an average of US$1.6 million/enterprise (China is US$1.54 million/enterprise; Taiwan is US$2.1 million/enterprise, Canada is US$5 million/enterprise).

Thus, the number of foreign enterprises registered for establishment is higher than in 2020 (46 compared to 36 enterprises), but the average registered capital per enterprise is much lower than the average of US$4.6 million/enterprise of 2020.

In attracting FDI into the wood industry, one of the problems in recent years is the emergence of "underground" and "hidden" investment, and put Vietnamese wood at risk of trade remedy investigations.

Nguyen Pham Nhu Ha, Deputy Head of the Department of Supervision, Management of Origin of Goods and Intellectual Property (Department of Supervision and Management of Customs, General Department of Customs), said that recently, she has witnessed many anti-dumping investigations into wood products.

There are two main forms of fraud that Chinese-invested enterprises are taking advantage of to get Vietnamese origin to export to some major markets, namely the US.

The first trick is an enterprise that imports peeled wood and plywood from China, but then takes the origin of Vietnam to export. Enterprises hardly do much processing, from raw materials to finished products.

The second common trick is that many enterprises buy raw materials from suppliers who are Chinese-invested enterprises, but each enterprise only buys a few products and then reassembles them. "The form of buying and selling wastes a lot of time for Customs authorities to investigate and collect information," Ha said.

Talking to Customs News, Do Xuan Lap, Chairman of the Vietnam Timber and Forest Products Association, suggested that the Government strictly control trade fraud, including FDI projects, especially projects with small scale, simple technology, production of goods with fraudulent signs and capital from China.

The control focuses on investment projects in groups of products with high risk of commercial fraud of the timber industry (the goods subject to anti-dumping tax by the US). Investment licensing should be carefully considered, prioritizing the use of high technology in the spirit of Resolution 50-NQ/TW dated August 20, 2019 of the Politburo on improving the quality of FDI investment.

"Technology in new investment projects in the wood industry needs to be appraised by the Advisory Council of the Vietnam Timber & Forest Products Association," said Do Xuan Lap.

Representatives of a number of wood industry enterprises expressed their view that the Ministry of Planning and Investment should have a "filter" on capital sources and investment scale of FDI projects. The wood processing industry accepts competition but must attract selective FDI with relatively new technology.

In 2021, out of a total of 46 newly registered FDI enterprises in the wood and forest product processing industry, there are 43 enterprises producing wood products (41 enterprises manufacturing beds, cabinets, tables, chairs and two enterprises producing wooden packaging); three enterprises produce artificial wood planks (two enterprises produce plywood and one enterprise manufacturing slats).

By locality, Binh Phuoc has 15 enterprises; Binh Duong 14 enterprises; Dong Nai four enterprises; Yen Bai, Quang Binh and Bac Ninh have two enterprises each; Bac Giang, Hai Duong, Long An, Nam Dinh, Quang Ngai, Quang Ninh, Thai Nguyen each have one enterprise.

Thus, Binh Phuoc and Binh Duong continue to be localities attracting many foreign businesses to invest in 2021.

By Thanh Nguyen/ Kieu Oanh

Related News

Quang Tri Customs makes great effort to foster imports and exports across area

Quang Tri Customs makes great effort to foster imports and exports across area

VCN – Quang Tri Customs Department determines that accompanying businesses is a requirement and responsibility to support businesses in overcoming difficulties, contributing to the socio-economic development in the area.
Removing difficulties in tax exemption and refund policies for export processing enterprises

Removing difficulties in tax exemption and refund policies for export processing enterprises

VCN - The Customs agency has received many proposals from businesses about answering and guiding policies on tax exemption, import tax and VAT refund for export processing enterprises. The General Department of Customs has responded and provided instructions for each specific case.

Latest News

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN member states and the Republic of Korea (RoK) have reached a consensus on the transposition of ASEAN-RoK Free Trade Agreement (AKFTA) Product Specific Rules from the Harmonised System Codes HS 2017 to HS 2022.
Opportunities for digital technology businesses to go global

Opportunities for digital technology businesses to go global

Finding solutions and directions to promote and develop Vietnamese digital technology enterprises is an important task, which will promote the stability and sustainability of the country's economy, heard a recent conference.
Vietnam, China eye stronger border trade

Vietnam, China eye stronger border trade

Border provinces of Vietnam and China should continue close coordination and enhance trade promotion between the two sides, stressed the recent talks between the management boards of the economic zone of the northern province of Ha Giang and the Malypo border economic cooperation zone of China’s Yunnan province.
Improve competitiveness and sustainable development of the seafood industry

Improve competitiveness and sustainable development of the seafood industry

VCN - In early 2024, seafood exports have prospered. This is the driving force that helps seafood businesses hope for a stronger recovery this year. Ms. Nguyen Thi Thu Sac, Chairwoman of the Vietnam Association of Seafood Exporters and Producers (VASEP) shared with Customs Magazine.

More News

Business environment reform needs further promotion: expert

Business environment reform needs further promotion: expert

Resolution 02 issued by the Government creates pressure for the ministries, sectors and localities to make changes for the business community as well as the socio-economic development.
Singapore is the largest foreign investor in VN in Q1

Singapore is the largest foreign investor in VN in Q1

The disbursed FDI rose by 7.1 per cent in the first quarter to reach $4.63 billion, a signal that the disbursement will continue the positive trend, the agency said.
Thai Binh boosts investment, trade cooperation with Germany

Thai Binh boosts investment, trade cooperation with Germany

A delegation from the northern province of Thai Binh, led by Deputy Secretary of the provincial Party Committee Nguyen Khac Than, visited several localities and business organisations in Germany from March 25 to 27, in a bid to enhance trade cooperation with and attract direct investment from the European nation.
Lifting obstacles to develop industrial parks

Lifting obstacles to develop industrial parks

VCN - Attracting investment and developing industrial zones (IZs) and economic zones (EZs) is one of the important contents to implement the policy of developing a multi-component, open, attract investment and resources from all economic sectors to develop the country. In addition to the results achieved, there still limitations that need to be removed to draw investments to develop industrial parks and economic zones, including financial problems for industrial parks.
Unlock capital flows and create favorable conditions for investors

Unlock capital flows and create favorable conditions for investors

VCN - Talking with the press, Dr. Ngo Cong Thanh (Photo), Provisional Executive Committee member of the Vietnam Industrial Park Finance Association (VIPFA), said that it is necessary to open up capital flows and create conditions for investors to access key factors. Facilitate production and business factors and innovate investment promotion activities to more effectively develop industrial parks.
More than 300 businesses, manufacturers to attend VGMF 2024

More than 300 businesses, manufacturers to attend VGMF 2024

More than 300 domestic and foreign businesses and manufacturers will attend the Vietnam Global Manufacturing Forum 2024 (VGMF2024) to explore investment and business cooperation opportunities.
Connecting with FDI firms helps boost wood exports: insiders

Connecting with FDI firms helps boost wood exports: insiders

Strengthening linkages and cooperation between foreign-invested and domestic enterprises will contribute to promoting the sustainable development of the Vietnamese wood industry, according to insiders.
Doosan Vina exports nearly 2,000 tonnes of modules to US

Doosan Vina exports nearly 2,000 tonnes of modules to US

The Doosan Enerbility Vietnam (Doosan Vina) specialising in heavy industries announced on March 26 that it has just exported a batch of nine modules weighing nearly 2,000 tonnes to the Golden Triangle Polymers company in Texas, the US.
Wood processing enterprises strive to increase the proportion of individually designed goods

Wood processing enterprises strive to increase the proportion of individually designed goods

VCN - Many wood and furniture processing enterprises are promoting investment in design activities, helping to increase the proportion of individually designed products (ODM) in exports, thereby affirming the industry's capacity Vietnamese wood in segments with higher added value.
Read More

Your care

Latest Most read
ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN member states and the Republic of Korea (RoK) have reached a consensus on the transposition of ASEAN-RoK Free Trade Agreement (AKFTA) Product Specific Rules from the Harmonised System Codes HS 2017 to HS 2022.
Opportunities for digital technology businesses to go global

Opportunities for digital technology businesses to go global

Finding solutions and directions to promote and develop Vietnamese digital technology enterprises is an important task, which will promote the stability and sustainability of the country's economy, heard a recent conference.
Vietnam, China eye stronger border trade

Vietnam, China eye stronger border trade

Border provinces of Vietnam and China should continue close coordination and enhance trade promotion between the two sides, stressed the recent talks between the management boards of the economic zone of the northern province of Ha Giang and the Malypo border economic cooperation zone of China’s Yunnan province.
Improve competitiveness and sustainable development of the seafood industry

Improve competitiveness and sustainable development of the seafood industry

In early 2024, seafood exports have prospered. This is the driving force that helps seafood businesses hope for a stronger recovery this year.
Business environment reform needs further promotion: expert

Business environment reform needs further promotion: expert

Resolution 02 issued by the Government creates pressure for the ministries, sectors and localities to make changes for the business community as well as the socio-economic development.
Mobile Version