Solutions for exporting wood and wood products in Vietnam

In recent years, export of wood and wood products increased, earning a lot of foreign currency, helping many families and localities to get rich. However, how to fully promote the potentials and strengths in wood production, overcome barriers, create leaps, breakthroughs is the next big question.

Bright colors in the export of wood and wood products.

In 2021, despite the impact of the Covid-19 epidemic, the export of wood and wood products (W&WP) still reached US$14.809 billion, continuing to hold the sixth position in export turnover in key export products of Vietnam (up 19.7% compared to 2020). Meanwhile, Vietnam’s W&WP import turnover in 2021 reached 2.928 billion USD, up 14.5% compared to 2020. Thus, Vietnam had a trade surplus of 11.88 billion USD in import-export activities. W&WP exports in 2021, which is $2,067 billion higher than in 2020.

According to statistics of the General Department of Vietnam Customs, Vietnam’s W&WP exports focused on a few traditional markets and always maintain high growth rates, such as China 23.7%; United States 21.4%; EU 14.4%; Japan 6.7%; Korea 5.7%.

Among these markets, the US market continues to be the largest importer of W&WP in Vietnam, reaching over US$2.29 billion, up 77.02% over the same period in 2020; accounting for 61% of the total W&WP export turnover of the whole industry (this rate of the same period in 2020 reached 50%). Three largest markets behind the US belong to Asia, including: China, Japan and Korea, with growth rates of 8.22%, 9.71% and 8.98% respectively. Vietnam’s W&WP export turnover to Canada, France, Australia and the Netherlands also increased strongly. Regarding the export value of some W&WP product’s type, there was a remarkable increase, such as: wood chips increased by 18.4%, wood pellets increased by 17.4%. Meanwhile, wood material reached 2.42 billion USD, up 1.1%; wood products reached 840.5 million USD, up 401.6 %.

Also according to statistics of the General Department of Customs, W&WP import turnover from China, Brazil, Laos and Chile increased sharply. In 2021, China continues to be the largest W&WP supply market for Vietnam, reaching $1.036 billion, up 20.20% compared to 2020; accounting for 35.39% of total import turnover. Next is the US and Thailand markets, with an increase of 6.6% and 7.13% compared to 2020. In particular, in 2021, the import turnover of W&WP from Brazil, Laos and Chile increase significantly. Up to 87.40% in turn; 85.29% – an increase of 32.61% compared to 2020. In contrast, the import turnover of W&WP from Newzealand, Russia and Congo markets only increased very slightly.

In-depth analysis of Vietnam’s W&WP export in 2021 shows that the W&WP export turnover of foreign direct investment (FDI) enterprises reached US$7.464 billion, an increase of 22.24% compared to that of Vietnam in 2020. Accounting for 50.4% of the total W&WP export turnover of the whole industry (slightly increased compared to the proportion in 2020 reaching 49.35%). Meanwhile, the W&WP import turnover of FDI enterprises reached US$1,195 billion, up 14.37% compared to 2020; accounting for 40.82% of the total import turnover of W&WP in the whole country.

The export turnover of wood products of FDI enterprises reached USD 6.82 billion, up 20.48% compared to 2020; accounted for 92.72% of total W&WP export turnover of FDI sector and accounted for 55.14% of total SPG export turnover of the whole industry. Thus, in 2021, FDI enterprises had a trade surplus of US$6.268 billion, up from a trade surplus of US$5.06 billion in 2020. It is worth mentioning that the number of FDI enterprises is much smaller than the number of domestic W&WP exporters. This indicates that the productivity and efficiency of FDI enterprises have better quality and wider influence than domestic enterprises.

Breakthrough solution to increase export of wood & wood products

For the success of the export of wood and wood products, there are a few prominent reasons, which are: Overall, the opening of trade markets with countries through an FTA has helped export growth of wooden furniture increased significantly. In fact, joining FTAs ​​has helped Vietnam perfect its policies by cutting unnecessary procedures, thereby promoting Vietnam’s W&WP exports to the FTA market.

Giải pháp xuất khẩu gỗ và sản phẩm gỗ ở Việt Nam
Workers of Thuan An Wood Processing Joint Stock Company check the details of wooden bed frames. Photo: HONG NHUNG 

Next, the reduction of W&WP import tax of the countries in the FTA unintentionally stimulated consumption demand in the host country, promoting the import of Vietnamese wooden products. Moreover, because Vietnam has begun to focus on improving the domestic supply of raw materials, the increase in the domestic supply of wood materials has led to the promotion of furniture exports to FTA markets. However, this is not the key factor to promote the enhancement of the value of W&WP production and export in the future.

According to experts, in order to produce and export W&WP more, Vietnamese enterprises need to invest in technology, limit the export of wood chips, logs and raw materials, but instead focus strongly on processing products with higher added value. In fact, apart from FDI enterprises, most wood processing enterprises in Vietnam are not strong in processing. Therefore, the export value is not high. This further affirms that the development of processing or added value to wood material areas is one of the top points to note for Vietnam’s furniture industry if it wants to continue to grow exports, especially to FTA markets when these agreements are signed.

Vietnam is a country with a humid tropical climate, suitable for afforestation development, and a rich source of production materials. For thousands of years, traditional handmade wooden furniture production has developed. However, along with the outstanding advantages that have helped Vietnam’s W&WP production and export grow well in recent years, there are also limitations that need to be overcome. Most notably the standardization stages. equipment, human resources, infrastructure investment, modern production facilities, raw materials and product designs. In order to promote the export of wood and wood products to the FTA market, in the coming time, Vietnam needs to focus on completing a number of urgent policies.

Giải pháp xuất khẩu gỗ và sản phẩm gỗ ở Việt Nam
Producing wooden furniture for export to the EU market. Photo: HONG NHUNG

Firstly, in the group of solutions to prepare raw materials, the State needs to have special policies so that businesses can receive afforestation land and develop raw materials faster and more sustainably. Because planting material forests requires a lot of time, it is necessary to have a strategy to encourage long-term investment. The specific solution in this field is to need to make scientific and sufficient calculations to forecast the demand for wood materials in detail, to plan the development of material areas with different types to meet the demand. . It is necessary to have specific policies in the process of afforestation, exploitation, and minimize the export of raw wood. Besides, it is necessary to pay attention to the source of imported raw materials. Because this is an important component in Vietnam’s export wooden products. Therefore, the Government needs to create the most favorable conditions for importing and supplying wood materials. Satisfy quantity, quality and time with competitive price. In particular, the important solution is to build a portal on wood materials so that businesses can consult, be more proactive in importing and avoid stockpiling raw materials for too long.

Second, on the side of the solution group to prepare human resources. In fact, although the skills and qualifications of Vietnamese workers in furniture production are basic but not refined, they are still heavy on traditional products and limited in modern product designs, which are not suitable. with the culture, way of life and methods of many countries in the world. Specifically, most Vietnamese enterprises produce products according to orders, but have not yet created new designs to meet the requirements of exporting to other countries. Therefore, it is necessary to promote training and improve workers’ skills. The State needs to study to perfect policies to support training skilled workers in the direction of investing in more machinery and technology to meet business needs.   

About the group of investment in means and technology. In fact, the reason why although the number of FDI enterprises producing and exporting W&WP is many times less than domestic enterprises, the export value is higher because they have good production technology from which to attract customers. customers and have a market for consumption. The specificity of G&WP production also requires the development of strong supporting industries, especially raw materials and accessories such as glue, paint, leather, plastic… and accessories from the mechanical industry. In particular, the wood industry needs graphic designers to produce new models. Therefore, because the supporting industry and graphic design human resources in the wood industry are still limited, it is rare to produce new useful and aesthetic products to offer partners, but instead manufacture to order.

The solution on the group of export mechanisms and policies is also very interesting. Accordingly, the State needs to improve tax policies, support and encourage exports such as credit and investment policies to facilitate export enterprises. In particular, the most necessary is to focus on research to reduce costs and time to participate in the market for production and business investors.

Regarding policies on trade promotion, it is necessary to have furniture fair centers with a suitable scale to converge and promote trade. It is necessary to develop a program for trade promotion and international cooperation to gain access to modern technology; research, assess wood market trends, seek partners in the direction of maximum support for businesses participating in international and domestic wood trade fairs and forums. That is, in addition to researching and expanding markets, it is necessary to maintain and develop traditional markets (both transit markets and direct consumer markets), through which the reputation and quality of Vietnamese export wood products will reach consumers faster.

About the group of policies to improve export institutions. Continue to promote the simplification of administrative procedures, at the same time strictly control since the drafting of relevant legal documents, fully and promptly announce and publicize new administrative procedures. ; create more favorable conditions for people and organizations to access and carry out administrative procedures. It is necessary to attach importance to promoting the development of logistics services for export through perfecting policies to promote investment attraction in the field of logistics infrastructure; focus on improving logistics infrastructure associated with e-commerce to keep pace with the development of the world and the region. Focusing on calling for investment in building Type I logistics centers in Hanoi and Ho Chi Minh City, which play the role of connecting Vietnam with the world and Type II logistics centers in Lang Son area.

The solution group strengthens anti-origin measures to protect Vietnam’s export wood industry against the risk of lawsuits. State authorities need to strengthen post-inspection work at C/O issuers and C/O requesting enterprises, aiming to take advantage of new generation FTA preferences, especially in terms of rules of origin. and how to meet the rules of origin. Enterprises also need to have a plan to deal with trade remedy lawsuits through strengthening the early warning mechanism; propagating, disseminating and guiding enterprises on how to respond to lawsuits initiated by foreign countries in order to limit harms right from the investigation stage to minimize adverse impacts on enterprises; guide and accompany enterprises in fighting and initiating a dispute settlement mechanism.

Exporting wood and wood products is one of the strategic directions to develop the country’s economy, especially creating jobs and income for rural and mountainous areas. Therefore, it is very necessary to have methodical research and investment for comprehensive development in order to have modern, diverse and useful products to meet the needs of markets in other countries. If we do better and invest deeply, surely in the future, the revenue and growth rate of G&SPG will not stop at ranking 6th out of 8 high value exports of Vietnam.

According to the Vietnam People’s Army newspaper.

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