"Shake hands" to overcome difficulties

Export of wood and wood products in 2018 is quite positive. There are some views that Vietnam has been negotiating and signing many Free Trade Agreements (FTAs), which are one of the main reasons for positive impacts on the growth of the processing industry, export wood. What is your point?

That's exactly correct. Impact on wood and wood products exports this year, typically Vietnam-EU FTA. It is expected that, in 2018, this FTA will take effect, opening up a large market of 28 countries for the wood industry in Vietnam. In addition, the Partnership for Comprehensive Poverty and Transnational Progress (CPTPP) will also have a positive impact on timber processing and export. In preparation for CPTPP, many countries in the bloc have worked with the wood industry, the prospect is quite open.

Apart from the above factors, the policies, guidelines and policies of the Party and Government are increasingly expanding, creating favorable conditions for enterprises. In terms of processing enterprises, wood export, in recent years, enterprises have been well prepared in changing technology, labor source etc., to meet the requirements to export to many markets, especially for the EU market.

One of the reasons contributing to the export of wood and wood products in 2018 is the support of foreign partners for Vietnamese enterprises. Currently, Vietnamese wood products are exported to many countries. The big buyers from Vietnamese enterprises that have a lot of experience in world markets have communicated with Vietnamese companies. Specific content including customer tastes, specifications, volume of products etc. Even, these partners also support Vietnamese enterprises in terms of finance. For example, furniture maker Ikea (Sweden) has supported Woodsland and Nam Dinh Forest Products JSC (Nafoco) for forest certification.

Besides the advantages mentioned above, how will the processing industry, and wood exporters face difficulties this year, sir?

As the export turnover increases, the typical difficulties in the wood industry are the raw materials. The quantity of raw materials needed is increasing, and the demand for raw materials to legalize the wood is also increasingly demanding. In addition, this year the processing enterprises, wood exports will face fierce competition on raw materials, especially from the Chinese market.

China's wood processing industry is expected to account for about 60 million m3 of timber. Chinese companies will spread the purchasing markets, including Vietnam and other Southeast Asian countries, putting pressure on businesses in Vietnam. Meanwhile, neighboring countries such as Laos, Cambodia, Myanmar will continue to promote the policy of banning the export of logs and sawn timber from plantations, creating a situation of scarce supply.

In addition to raw materials, difficulties facing most of the wood processing industry are capital for investment in technology changes. Nowadays, technology devices are expensive. Processed wood, wood exports want to change technology in at least the next 5-7 years. Meanwhile, the time that banks provide for businesses to borrow money is relatively short. In addition, companies have difficulty in self-training technical resources in the context of lack of training schools in Vietnam.

At present, the issue that many export sectors are quite interested in is the application of industrial revolution 4.0 into production. Could you say how this revolution has been spreading in the wood processing industry?

Industrial revolution 4.0 is a digital issue, is artificial intelligence, to put it into the wood industry needs a long time. At present, factor 4.0 has also appeared in the wood industry as some companies try to buy technology from overseas for the application of automatic wood drying. In many stages such as wood classification, sawing, wood drying they can apply 4.0, but obstacles that most businesses encounter is still lack of capital. Industry 4.0 is good, but where to buy the technology and labor force to use that technology is something that needs to be addressed in the future.

In your opinion, in 2018 as well as the further future, what is the basic solution for processing industry and wood export to overcome difficulties for sustainable development?

In my opinion, timber enterprises must make good use of state support, especially support in the Small and Medium Enterprises Assistance Law. In addition, both large and small scale enterprises must link together to take advantage of factors such as premises, labor, raw materials, capital, etc.

In fact, in the year 2017, wood enterprises have tested this "handshake" coordination model. Namely, Nafoco has linked with local businesses in Tuyen Quang, Hoa Binh, Thanh Hoa to take advantage of raw materials as well as preliminary processing workshops of local businesses. This year, the linkage model is expected to be further promoted.

Thank you Sir!