Binh Duong wood industry guarantees to fulfill growth target

Update: 09-04-2022 | 12:36:50

Adapting flexibly to the pandemic and market developments, the wood processing and export industry has quickly resumed its production, promptly resolved backlog of orders. Up to now, most enterprises have filled their orders for the end of the third quarter 2022, some closed orders for the whole 2022.

Timber manufacture at Tan Nhat Wood Company (South Tan Uyen Industrial Park).

Number of orders increases

According to Nguyen Liem, Chairman of Binh Duong Furniture Association (BIFA), thanks to free trade agreements (FTAs) in the processing industry, Binh Duong wood export industry has conveniently brought products to many markets, heightened their competitiveness with other countries' products. FTAs are having a very favorable impact on Vietnam's wood industry, creating a competitive advantage as the tax rate gradually decreases to zero. This also creates an attraction for investment from the EU region into Vietnam. While the US market has identified Vietnam as an important link in the supply chain. "The other issue is how we get involved in the chain. Wood enterprises are determined to transform the entire process to meet global supply chain standards," said Phan The Hai, Director of Trieu Phu Loc Company in North Tan Uyen District.

In fact, wooden furniture exported to markets increased sharply, led by furniture of living room, dining room, followed by bedroom furniture. It is expected that exports of wood and wood products to trans-Pacific markets would continue to increase sharply in the coming time. Currently, many businesses are increasing capacity to keep up with the schedule of signed orders until the end of the second quarter. Currently, in addition to the US, Canada and Australia are also potential markets for Vietnam.

Duong Thi Minh Tue, Sales Director of Minh Duong Wood Joint Stock Company (Thuan An City) said that the company's export orders to the US and Europe were closed until the end of the third quarter, and is receiving orders for the fourth quarter. Although the wood industry is on a favorable track for orders, most businesses are having a headache because of some costs incurred after the country lifted the lockdown. For example, the rising cost of gasoline and fuel affects input cost, auxiliary cost also increases. Besides, logistics costs are increasing rapidly, hence the price of products is very high. Many orders were signed before the fluctuation of raw material prices; thus businesses are suffering losses. A container to Europe currently ranges from US$6,000 to US$8,000, to the US from US$10,000 and US$12,000. But there are orders, which cost up to US$25,000 to ship a container from Cat Lai port to the East Coast of the US.

According to Do Thi Kim Loan, Director of Sao Nam Company (South Tan Uyen Industrial Park), many companies offer great incentives to attract labor sources that are at risk of shortage after the pandemic. With the good disease control in the country, importers and partners in the EU and the US are assured of orders from Vietnam. Especially since the enforcement of Resolution 128, manufacture has been resumed because businesses are actively in organizing production and disease prevention control.

Steady development

Deputy Prime Minister Le Van Thanh signed Decision No. 327/QD-TTg on March 10th 2022 approving a project to develop a sustainable and effective wood processing industry in 2021-2030 period. The target of wood and forest product export is to reach US$20 billion by 2025, of which the export turnover of wood and wood products would reach over US$18.5 billion. Furthermore, the whole country strives to have more than 80% of wood processing and preservation businesses to reach the level and capacity of advanced production technology; 100% wood, wood products exported and domestic consumption would use legal wood raw materials, wood with sustainable forest management certificates. Binh Duong wood industry is confident with its key role.

Nguyen Liem said that in 2022, export target of the wood industry from US$17.5-18 billion is completely achievable. In particular, the five main export product groups, such as chairs would reach US$4.1 billion, furniture would reach about US$10 billion, wood chips about US$2.1 billion, tablets about US$0.6 billion and plywood about US$1.3 billion. Especially, product groups are having great attractions such as chips and tablets, industrial materials (indoor and outdoor furniture) have a very strong production shift from other countries to Vietnam, while industrial materials focus on the U.S. market, and Japanese market has a great demand for wood chips and tablets. With these goals, Liem said that Binh Duong wood businesses did well their key role in maintaining export capacity.

To catch up with market demands in 2022, Binh Duong wood industry planned to organize many trade connection activities, such as the fair of "BIFA Wood Vietnam 2022" in August. In the short term, over the first six months of 2022, enterprises are focusing on high-value orders, prioritize forte orders of Binh Duong wood industry, not prioritize quantity growth target.

According to Nguyen Thanh Toan, Director of Provincial Department of Industry and Trade, currently, for the project "Developing the wood industry in the province until 2025, oriented towards 2030", consultation is completed, comments from BIFA were collected to complete the submission to Provincial People's Committee in the earliest time. The industry and trade authorities continue to listen to, solve difficulties to create conditions for the wood industry to develop favorably.

Reported by Tieu My, Cam Tu – Translated by Ngoc Huynh

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Binh Duong wood industry guarantees to fulfill growth target

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