Wood industry waiting for FDI from developed countries

VCN- Talking to reporters from Customs News, Mr. Nguyen Ton Quyen , Vice Chairman and General Secretary of Vietnam Timber and Forest Products Association, said that attracting foreign investment (FDI) is necessary for Vietnamese timber industry, but the key is to promote attraction from developed countries like the US and EU, instead of markets like China and Taiwan (China).
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wood industry waiting for fdi from developed countries
Mr. Nguyen Ton Quyen , Vice Chairman and General Secretary of Vietnam Timber and Forest Products Association,

Since 2018, FDI into the wood industry has increased rapidly, especially from China, Taiwan (China), etc. How do you assess this increase in investment?

In the first 9 months of this year, FDI into the wood industry has increased in quantity, but not in quality. 67 FDI projects mainly increased capital to occupy the premises, not new investment. In terms of the increasing quantity, but it is not remarkable

In addition, FDI into Vietnam mainly comes from China, Taiwan (China) and Hong Kong (China). The developed countries that Vietnam urgently needs such as the US and EU do not invest in the wood industry. Although Japan and South Korea have been called for, FDI into the wood industry is not significant. Thus, FDI increases in quantity but quality and efficiency are not high. I do not expect much in this FDI.

FDI enterprises investing in the wood industry have created fierce competition with domestic enterprises, especially in the "capital" of Binh Duong, does this problem cause many concerns?

Binh Duong province attracts a large amount of FDI capital into the wood industry because it focuses on many favorable conditions such as supporting industries, convenient transportation for the development of the processing industry and wood exports. Infact,Binh Duong is alocality with a large concentration of wood enterprises, but land is narrow. Other localities are not like that. For example, the North or BinhDinhhas a large area, but FDI enterprises do not "enter".

Currently, internal resources and the scale of Vietnamese enterprises are rising strongly, so we do not need to be too concerned about competition issues. For example, this year, Woodsland Joint Stock Company hadexport turnover of US$73 million and is expected to reach US$100 million in the next two years. Nam Dinh Forest Products Joint Stock Company (Nafoco), too, had three factories in three different districts with 3,000 workers, the export turnover this year amounted to US$50 million.

The timber industry has maintained anaverage growth rate of 18% per year for many years. So why don’t developed countries want to invest in this potential field?

I have discussed this with leaders of large corporations inthe US, Germany and France. The General Director of a large US corporation said that their wood processing industry has not developed. Enterprises mainly sell timber and buy products, so they are not interested in investing. They focus on material development and product development. The economic development orientation of countries like the US, Germany and Franceis very different, there is no need to invest in the field of wood processing.

Currently, the capacity of Vietnam's wood processing industry is more than capable of producing US$20 billion in export value by 2025. However, supporting industries must follow. We currently want to call for FDI in areas such as manufacturing of woodworking machines, manufacturing of mechanical products, glues, paints, etc. If attracted, the price will drop sharply, costs will drop too.

wood industry waiting for fdi from developed countries
Customs authorities strictly control import and export goods to prevent origin fraud. Photo: T.A.

Could you please tell us how the Government should take measures to improve the efficiency of attracting FDI into the wood industry in the future?

I propose that the State should continue calling and creating favorable conditions to attract FDI to invest in the development of supporting industries and the timber industry. For example, the Government is very interested in developing the mechanical industry. Attracting FDI capital needs to diversify in many other fields.

The Politburo has Resolution 50 / NQ-TW on "Orientations for institutional improvement, policies to improve the quality and effectiveness of foreign investment cooperation until the end of 2030".

If this Resolution can really come into force, it will change the quality of FDI projects, attract investment capital from developed countries, have markets, have strong and qualified potential, professional management with modern and advanced technology. Countries such as the US, EU, Japan and South Koreathenbring good technology with them.If Resolution 50/NQ-TW isimplemented, it will change the "face" of FDI into Vietnam and the timber industry.

By Thanh Nguyen/Bui Diep

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