Wood enteprises solve the problem of productivity improvement

The wood industry is facing many advantages and challenges. According to Binh Duong Furniture Association (BIFA), Vietnam's wood industry is ranked 4th among the top exporters of wood and wood products in the world. In the coming time, wood enterprises should increase productivity to gain more competitiveness in the market.

Challenges from raw materials

Mr. Luong Ngoc Kim, Director of Kim Thanh A Wood Company, said that wood products from rubber wood are now very popular market. Many wood enterprises in Binh Duong are lack of rubber wood material for export orders. At present, some countries in the region such as Malaysia, Laos and Cambodia have limited the export of raw materials to ensure domestic raw materials. Meanwhile, China also banned the exploitation of natural forests, so the demand for raw materials for production of this country is very large. In recent time, many domestic wood enterprises are worried when Chinese traders are intensifying the purchase of rubber wood materials in our country.

Huynh Quang Thanh, Chairman of BIFA, said that the country's wood enterprises proposed that the government should impose necessary sanctions to reserve raw materials in the country. Everyone know that exporting raw materials is less valuable than making a product for export, but not exporting raw materials affects the immediate interests of farmers. When raw material prices soar, we cannot ban farmers from selling raw materials to foreign traders.

Wood industry needs to develop more links to increase productivity. Photo: Wood production at Kim Thanh A Wood Company. 

The price of rubber wood has increased by 20-30% compared to the same period of 2016, while the supply of sawn timber in North America, Northern Europe, China ... is also increasing sharply by 6-13%. Therefore, enterprises need to proactively reserve materials in the long run; Do not take the initiative will cause many difficulties to businesses themselves. Mr. Luu Phuoc Loc, Director of Mtrade Co., Ltd said that in the immediate future, enterprises only use Melaleuca timber for some details of product, rubber wood material is still necessary for production activities of enterprises.

According to Vietnam Rubber Industry Group, liquidated rubber wood source will be into the peak in 2020-2025, with an area of ​​12,000 hectares per year. During this period, rubber wood material will decline sharply with only 6,000 hectares per year. While waiting for the government to adjust the strategy of developing wood growing areas, enterprises should promote labor productivity improvement to reduce costs, production costs, improve competitiveness ... when raw materials are gradually become scarce.

Proactively restructuring and connecting

Nguyen Liem, Director of Lam Viet Wood Company said that according to statistics, the country's labor productivity was very low, equal to only 1/10 compared with Korea, 1/5 compared with Malaysia, 1/15 compared with Singapore ... Therefore, restructuring enterprises, adjusting personnel to increase labor productivity is very necessary in the current context. Nguyen Phuc, Secretary General of BIFA, said that there were many measures to promote productivity increase such as manufacturing plant expansion, investment in machinery and equipment; improving the quality of labor and governance: continuously creating new products ... However, increasing investment capital is not the most effective measure.

In fact, some wood enterprises in Binh Duong with rudimentary equipment can still give high productivity, high profit. Enterprises need to determine whether their businesses have exploited the full available potential or not; which stages are still weak, which stages hinder labor productivity then to have a good foundation for the restructuring of enterprises.

Thanh added that BIFA had made trips to Italy to learn experiences. The survey showed that the scale of their production plants even lagged far behind some wood enterprises in Binh Duong. Machinery and technology of Italian enterprises is not much higher than domestic enterprises, but their productivity is very high. The main reason is that the Italian wood industry is professionally assigned, each enterprise only undertakes to produce one or two parts of the production chain. Therefore, even to large corporations, the scale of Italian workshops is much smaller than that of Binh Duong wood enterprises. Thanks to the cost savings from factories, labor ... Italy's wood industry is at top of the export market.

According to BIFA leaders, the idea of ​​promoting linkage in the difficult context of wood industry is being welcomed by all wood enterprises in Binh Duong. In the near future, the linkage will gradually be carried out, firstly focus on raw materials for production. The next step is learned from Italian linkage model, assignment, specialization of each product detail ... for each enterprise. This linkage could only be successful when the timber business community together turn towards the common goal is that the timber industry throughout the country should put full trust in each other.

Reported by Phung Hieu – Translated by Ngoc Huynh 

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