Happy while worry when FDI into the timber industry increases

VCN - Foreign direct investment (FDI) is one of the driving forces for the development of the timber industry. However, the rapid increase of FDI into the timber industry also poses many challenges such as difficulties in quality control of projects and receiving small-scale projects with outdated technology and potential risk of origin fraud.  
happy while worry when fdi into the timber industry increases Promote links in the ASEAN Wood industry
happy while worry when fdi into the timber industry increases FDI into wood industry increases rapidly: Worries about the “hidden” investments
happy while worry when fdi into the timber industry increases The timber industry is going down now
happy while worry when fdi into the timber industry increases

Exports of timber and timber products reached a turnover of US$11 billion in 2019. Photo: Nguyen Thanh

According to the Department of Agro-product Processing and Market Development (Ministry of Agriculture and Rural Development), exports of timber and timber product exports in the first 11 months of 2019 were estimated at US$9.64 billion, a year-on-year increase of 9.5 percent. Now, exports of timber and timber products are expected to reach $11 billion. The United States, Japan, China and South Korea remain Vietnam’s four largest import markets for timber and timber products, with about 81 percent of total export value. For the US, exports reached $4.2 billion, up to 34.5 percent.

It has been assessed that Vietnam has made better use of export opportunities than tropical timber exporters such as Indonesia, Malaysia or some other nations. This is a driving force to promote exports of Vietnamese timber and timber products to the US.

The Agro-product Processing and Market Development Department said US-China trade tensions along with Vietnam's participation in new generation free trade agreements (FTAs) such as the CPTPP, FTA Vietnam-EU (EVFTA) have contributed to attracting foreign direct investment into Vietnam’s timber industry.

According to the report "Foreign investment in Vietnam's timber industry" Vietnam Timber and Forest Product Association, foreign direct investment (FDI) in the timber processing sector has increased rapidly, especially since 2018.

Among investors, China, Japan and South Korea are countries with a large number of projects and large scale of investment. By the end of September 2019, Vietnam's timber industry received 67 new investment projects, with total investment capital of over $581 million, 2.3 times higher than total registered capital of 2018.

To expand production, many FDI enterprises have decided to increase investment, of which Hong Kong (China) is the territory with the largest amount of capital increases at 10 times, three times higher than 2018; followed by China, the United States and the British Virgin Islands. Total increased capital in the first nine months of 2019 reached $200.4 million, 1.8 times higher than the increase in 2018.

Chairman of the Binh Duong Furniture Association (BIFA) said the levy of a tax of 10 – 25 percent by the US on timber imports from China makes Chinese timber enterprises almost unacceptable. To continue exporting to the US, they have to shift their investment to other countries, such as Vietnam.

Despite identifying FDI as a driving force for the development of the timber industry, the Agro-product Processing and Market Development Department said this poses many challenges as well as difficulties for the quality control of projects, receiving small-scale projects with outdated technologies, and failing to meet environmental protection requirements.

Notably, the FDI increase into the timber industry also has the risk of trade fraud and fake origin to take advantage of lower import taxes from Vietnam than from China to the US.

happy while worry when fdi into the timber industry increases Foreign investment increases in wood processing industry

Foreign direct investment in the wood processing industry has increased rapidly especially since 2018 the Vietnam Timber ...

Hiep said the shift of investment capital into the timber industry from China to Vietnam has started to put significant pressure on Vietnamese enterprises, typically in labour recruitment and anxiety about risks of origin fraud.

Three issues to be controlled:

Firstly, it should all three types of investment, including new investments, capital raising projects and share purchase projects. Among them, priority should be given to reviewing new and small-scale investment projects, especially new investment and small-scale capital in 2019.

Secondly, central management agencies should coordinate with local timber associations to monitor and grasp the situation of illegal investments, thereby forming important key gates in the control of FDI investment.

Thirdly, the Ministry of Industry and Trade and ministries and agencies need to strengthen inspection and handling of trade fraud issues. In particular, direct management agencies such as agencies in charge of import and export, trade protection, customs and investment must get involved.

By Thanh Nguyen/ Huyen Trang

Related News

Industrial Growth Projections for 2025

Industrial Growth Projections for 2025

VCN - The Ministry of Industry and Trade has set ambitious goals for 2025, targeting an industrial production index growth of approximately 9–10% compared to 2024. Additionally, merchandise exports are expected to rise by around 12% relative to the previous year.
The supporting industry needs high-tech human resources

The supporting industry needs high-tech human resources

VCN - The trend of shifting supply chains is opening up many opportunities for the domestic supporting industry to develop; the problem of human resources is becoming more urgent so that businesses can improve production capacity and self-sufficiency competitiveness by meeting the increasing requirements of the value chain.
Semiconductor industry needs 50,000 high-quality workforce in next 10 years

Semiconductor industry needs 50,000 high-quality workforce in next 10 years

Vietnam's workforce demand in the semiconductor–microchip field is forecast to be around 20,000 engineers for the next five years, and 50,000 engineers in the next 10 years, according to economists from the Fullbright University.
Vietnam making new moves in multibillion-dollar semiconductor industry

Vietnam making new moves in multibillion-dollar semiconductor industry

Vietnam is making strong progress in advancing its standing in the global semiconductor supply chain as many of the world’s largest chip manufacturers have landed in the Southeast Asian nation, insiders said.

Latest News

Việt Nam tightens fruit inspections after warning from China

Việt Nam tightens fruit inspections after warning from China

The Plant Protection Department has urged local authorities and relevant agencies to strengthen the inspection and monitoring of durian cultivation areas and export packing facilities following a warning from China.
Brand building key to elevate Vietnamese fruit and vegetable sector: experts

Brand building key to elevate Vietnamese fruit and vegetable sector: experts

Trade promotion, product introduction and brand promotion also need to be innovated to attract customers effectively.
Freight transport via China-Việt Nam cross-border trains posts rapid growth

Freight transport via China-Việt Nam cross-border trains posts rapid growth

The Nanning branch of China Railway Group Limited reported a sharp increase in freight transport on the China-Việt Nam cross-border railway last year, with trains departing from Guangxi carrying a total of 19,670 containers, marking a staggering annual increase of 1,153 per cent.
Vietnamese retail industry expects bright future ahead

Vietnamese retail industry expects bright future ahead

With a young and dynamic population, rising incomes and increasing urbanisation, the sector is emerging as one of the most promising engines for economic expansion in the coming years.

More News

Complying with regulations of each market for smooth fruit and vegetable exports

Complying with regulations of each market for smooth fruit and vegetable exports

VCN - According to Mr. Dang Phuc Nguyen (photo), General Secretary of the Vietnam Fruit and Vegetable Association (Vinafruit), with the development momentum and increasing consumption demand from the Chinese market, the Vietnamese fruit and vegetable industry is setting new records and is expected to reach an export turnover of US $10 billion by 2030. With great potential and advantages in developing agricultural products, Vietnam has been affirming its position as one of the world's leading agricultural exporters.
Fruit and vegetable industry aims for $10 billion in exports by 2030

Fruit and vegetable industry aims for $10 billion in exports by 2030

Based on impressive export results in recent years, Việt Nam’s fruit and vegetable industry has set a target of achieving US$10 billion in export value by 2030, according to the Việt Nam Fruit and Vegetables Association.
GDP grows by over 7 per cent, exceeds target for 2024

GDP grows by over 7 per cent, exceeds target for 2024

The growth rate is relatively impressive for the 2011-24 period, only lower than the rates of 2018, 2019 and 2022.
Vietnamese pepper: decline in volume, surge in value

Vietnamese pepper: decline in volume, surge in value

In December 2024, Việt Nam exported 15,265 tonnes of pepper of all types, including 12,771 tonnes of black pepper and 2,494 tonnes of white pepper, generating a total turnover of $100.6 million.
Việt Nam maintains position as RoK’s third largest trading partner

Việt Nam maintains position as RoK’s third largest trading partner

Việt Nam continued solidifying its position as the Republic of Korea (RoK)’s third-largest trading partner in 2024, trailing only China and the US, marking the third consecutive year of the significant trade relationship.
Greater efforts to be made for stronger cooperation with European-American market

Greater efforts to be made for stronger cooperation with European-American market

The European-American Market Department (MoIT) will monitor regional developments and explore opportunities to strengthen Việt Nam’s economic and trade ties.
Leather, footwear industry aims to gain export growth of 10% in 2025

Leather, footwear industry aims to gain export growth of 10% in 2025

The footwear sector will still focus on exporting to available and easy-access markets such as Africa and Asia to increase revenue.
Grasping the green transformation trend - A survival opportunity for Vietnamese Enterprises

Grasping the green transformation trend - A survival opportunity for Vietnamese Enterprises

VCN - Green transformation not only helps enterprises minimize the risk of being eliminated from important export markets, but also creates opportunities to build sustainable brands, enhance product value and reach high-end customer segments globally.
Việt Nam to complete database of five domestic manufacturing industries in 2026

Việt Nam to complete database of five domestic manufacturing industries in 2026

The project to build a comprehensive database of domestic industries aims to enhance the capacity and efficiency of trade remedy investigations. It also serves as a strategic tool to protect domestic production.
Read More

Your care

Latest Most read
Việt Nam tightens fruit inspections after warning from China

Việt Nam tightens fruit inspections after warning from China

The Plant Protection Department has urged local authorities and relevant agencies to strengthen the inspection and monitoring of durian cultivation areas and export packing facilities following a warning from China.
Brand building key to elevate Vietnamese fruit and vegetable sector: experts

Brand building key to elevate Vietnamese fruit and vegetable sector: experts

Trade promotion, product introduction and brand promotion also need to be innovated to attract customers effectively.
Freight transport via China-Việt Nam cross-border trains posts rapid growth

Freight transport via China-Việt Nam cross-border trains posts rapid growth

The Nanning branch of China Railway Group Limited reported a sharp increase in freight transport on the China-Việt Nam cross-border railway last year, with trains departing from Guangxi carrying a total of 19,670 containers, marking a staggering annual increase of 1,153 per cent.
Vietnamese retail industry expects bright future ahead

Vietnamese retail industry expects bright future ahead

With a young and dynamic population, rising incomes and increasing urbanisation, the sector is emerging as one of the most promising engines for economic expansion in the coming years.
Complying with regulations of each market for smooth fruit and vegetable exports

Complying with regulations of each market for smooth fruit and vegetable exports

VCN - According to Mr. Dang Phuc Nguyen (photo), General Secretary of the Vietnam Fruit and Vegetable Association (Vinafruit), with the development momentum and increasing consumption demand from the Chinese market, the Vietnamese fruit and vegetable indu
Mobile Version