Lacking the link and single efforts in the wood industry to reduce the timber import, which are currently near 40% to a lower level, it will not be effective.

Wood stock quotes increase sharply before the conflict in Ukraine, the opportunity for wood products to sell at higher price when the supply of timber from Russia to the world market may be interrupted. At the end of the trading session on the weekend of March 11, many wood stocks were in purple color such as GDT of Duc Thanh Wood Processing JSC (+7%), GTA of Thuan An Wood Processing JSC (+7%), TTF of Truong Thanh Wood Industries JSC (+7%), PTB of Phu Tai JSC (+7%) and MDF of MDF VRG – Quang Tri Wood JSC (+15%). Besides, many other stock codes also gained positively, including VIF of Vietnam Forestry Corporation JSC up 7.1%, BKG of BKG Vietnam Investment JSC up 6.3 %, SAV of Savimex Import Export and Economic Cooperation JSC exports increased by 3.4%, AGC of An Cuong Wood Working JSC increased by 0.4%.

The wood industry’s forecasts all lead to the export of wood and wood products to prosper in 2022. According to the Vietnam Timber and Forest Products Association, at this time, many wood businesses have received orders until the end of the second quarter of this year. In 2022, the order size increases sharply, wood processing factories are increasing their capacity to be ready to meet the needs of customers.

On a global scale, the Italian Center for Industrial Studies (CSIL) forecasts that the global furniture market will grow by about 4% in 2022. Among the major markets (furniture consumption is forecasted to be over US$5 billion per year), Europe and Asia are expected to have the strongest growth in consumption of interior and exterior furniture. Besides, the main market of Vietnam’s wood industry is North America, will continue to grow steadily. CSIL based on survey results in 100 global furniture consumption markets to make this forecast.

The CSIL’s forecast is relatively consistent with the context that Vietnam’s wood industry is striving to be self-sufficient in raw materials to some extent. A plan to develop the modern wood industry, ensure the harmony of interests among stakeholders, was approved by 5 wood associations, including: Vietnam Timber and Forest Products Association (VIFOREST), Dong Nai Wood and Handicraft Association (DOWA), Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), Binh Duong Furniture Association (BIFA) and Forest Products Association of Binh Dinh (FPA Binh Dinh), are bound together by a new agreement.

For the past two years, the supply chain has broken by the Covid-19, the wood industry has gradually established an alliance to set up an inter-regional timber center. Mr. Do Xuan Lap, Chairman of the Vietnam Timber and Forest Products Association (Viforest), said that a chain of links had gradually been established, from linking with the people and forestry farms to build a sustainable raw material area, linking wood businesses for intensive production, to linking with markets and buyers to join the global supply chain.

The “Green Vietnam” Fund was launched in December 2020 by timber associations and the business community, and it is waiting for the approval from the Ministry of Home Affairs for establishment and operation, which will allow timber associations to promote their link.

To release the timber pressure

30/03/2022 13:20

To release the timber pressure

Lacking the link and single efforts in the wood industry to reduce the timber import, which are currently near 40% to a lower level, it will not be effective.

Wood stock quotes increase sharply before the conflict in Ukraine, the opportunity for wood products to sell at higher price when the supply of timber from Russia to the world market may be interrupted. At the end of the trading session on the weekend of March 11, many wood stocks were in purple color such as GDT of Duc Thanh Wood Processing JSC (+7%), GTA of Thuan An Wood Processing JSC (+7%), TTF of Truong Thanh Wood Industries JSC (+7%), PTB of Phu Tai JSC (+7%) and MDF of MDF VRG – Quang Tri Wood JSC (+15%). Besides, many other stock codes also gained positively, including VIF of Vietnam Forestry Corporation JSC up 7.1%, BKG of BKG Vietnam Investment JSC up 6.3 %, SAV of Savimex Import Export and Economic Cooperation JSC exports increased by 3.4%, AGC of An Cuong Wood Working JSC increased by 0.4%.

The wood industry’s forecasts all lead to the export of wood and wood products to prosper in 2022. According to the Vietnam Timber and Forest Products Association, at this time, many wood businesses have received orders until the end of the second quarter of this year. In 2022, the order size increases sharply, wood processing factories are increasing their capacity to be ready to meet the needs of customers.

On a global scale, the Italian Center for Industrial Studies (CSIL) forecasts that the global furniture market will grow by about 4% in 2022. Among the major markets (furniture consumption is forecasted to be over US$5 billion per year), Europe and Asia are expected to have the strongest growth in consumption of interior and exterior furniture. Besides, the main market of Vietnam’s wood industry is North America, will continue to grow steadily. CSIL based on survey results in 100 global furniture consumption markets to make this forecast.

The CSIL’s forecast is relatively consistent with the context that Vietnam’s wood industry is striving to be self-sufficient in raw materials to some extent. A plan to develop the modern wood industry, ensure the harmony of interests among stakeholders, was approved by 5 wood associations, including: Vietnam Timber and Forest Products Association (VIFOREST), Dong Nai Wood and Handicraft Association (DOWA), Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), Binh Duong Furniture Association (BIFA) and Forest Products Association of Binh Dinh (FPA Binh Dinh), are bound together by a new agreement.

For the past two years, the supply chain has broken by the Covid-19, the wood industry has gradually established an alliance to set up an inter-regional timber center. Mr. Do Xuan Lap, Chairman of the Vietnam Timber and Forest Products Association (Viforest), said that a chain of links had gradually been established, from linking with the people and forestry farms to build a sustainable raw material area, linking wood businesses for intensive production, to linking with markets and buyers to join the global supply chain.

The “Green Vietnam” Fund was launched in December 2020 by timber associations and the business community, and it is waiting for the approval from the Ministry of Home Affairs for establishment and operation, which will allow timber associations to promote their link.

To release the timber pressure 1

 

Wood from Vietnam’s plantations. Source Go Viet 

The “Green Vietnam” Fund, an initiative from timber associations and branches throughout the country, has established a Foundation Board of Directors in December 2020, the Fund is waiting for an official decision from the Ministry of Home Affairs, which allows timber associations to promote the link. The plan develops an inter-regional furniture center with the leading scale and capacity in the manufacture, processing and trade of furniture and wood products in the Asia-Pacific region, which is being implemented on an area of 500 ha in Dong Nai province. In association with foreign forestry companies, researching on timber seedlings/species which is suitable for Vietnam’s soil is also being carried out.

Mr Lap believes that the link can “handle a huge part” of the challenges, make price advantages, increase competitiveness, and contribute to build up the Vietnamese wood brand on the global market. He cited, a business cannot handle an order of 1000 containers, with many product lines, from tables, chairs, cabinets and many other items. In addition to a large investment, high-priced orders will not bring results. If they link together, businesses focus on their intensive fields, which will bring higher added value.

The expectation of the wood industry is completely consistent with the global market and the current conditions of Vietnam’s wood processing industry. However, with a weak link, especially a weak link in the chain link, “going faster” also pushes the industry to face other issues.

Looking at the actual development of Vietnam’s forestry industry, the timber shortage will only change when related policies to the forestry and land sectors are amended and supplemented to be suitable for the new situation. “The lack of access to land fund for afforestation is currently the biggest difficulty facing the private sector,” commented Dr. To Xuan Phuc, Senior Advisor of Forest Trends. Currently, this land fund is managed by households and forestry companies.

Mr. Phuc realized that the risk of the export wood processing industry in not meeting the technical requirements of the import markets is very large. Meanwhile, strengthening the requirements of green growth, including the requirements for legal timber origin, has become the main trend in many markets. The US Lacey Act, the EU Forest Law Enforcement, Governance and Trade (FLEGT) Project, and the Australian Illegal Logging Prohibition Law are typical examples. These requirements are continuing to create great challenges for the development of the wood processing industry for export, while the technical and phytosanitary measures which are used by import markets are increasingly common.

Dr. Phuc, who has carried out many studies on forest resources in relation to national policies and the people’s livelihoods in many regions in Vietnam and countries in the Mekong Sub-region, recommended that the Government of Vietnam needs to issue “open and transparent mechanisms and policies”, allow the forestry companies to contribute the land to cooperate with private companies in creating a large source of timber plantations. He believes that: “The risks in capital contribution to the association will also be minimized if the Government makes the strict supervision mechanisms in determining the source of land funds take part in the link, pricing the value of land as well as of the plants on it”.

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