Business
Wood sector pins high hopes on export value of $8b
Vietnam’s export of wood and timber products is expected to reach US$8 billion in 2017, roughly $500 million to $1 billion higher than the annual target set earlier this year.
The Vietnam Timber and Forest Product Association (Viforest) forecast the industry’s export growth rate this year will be 17 percent.
Viforest vice chairman and general secretary Nguyen Ton Quyen said the impressive growth rate in the first nine months boosts prospects of the wood sector achieving its target. The sector earned $5.9 billion in export revenue in nine months this year, up 11 percent year-on-year. The wood export turnover averaged some $700 million a month.
Vietnam’s wood products achieved the highest export growth from particle boards, artificial wood boards, melamine-faced chipboards (MDF) and wood pellets.
The last three months of the year are generally the peak season for wood and wood product exports, so the industry’s target of $8 billion is deemed attainable.
Wood exports grew in most traditional and key markets, such as the US, Japan, the EU, China and South Korea. The value of exports to the five markets makes up nearly 90 per cent of the total, said Quyen.
In May 2017, after a six-year negotiation process, Vietnam initiated the Vietnam-EU Voluntary Partnership Agreement (VPA) on the EU Forest Law Enforcement, Governance and Trade (FLEGT).
Quyen said implementation of this agreement in Vietnam will ensure all wood products on the agreed list are legal. The document could create fundamental changes for Vietnam’s wood processing sector, as well as domestic and export markets, including nations supplying wood material to Vietnam and those buying wood and timber products from Vietnam, he added.
However, the country is facing several challenges, including the short supply of raw wood. Apart from domestic wood, Vietnam imports a large amount of wood material worth $1.7-1.8 billion annually, equivalent to about 20-30 per cent of the export turnover.
According to experts, the biggest challenge for the expansion of the wood sector was competition in raw wood purchase. China’s ban on natural forest logging, and restrictions imposed by Vietnam and other countries on the trade, exploitation and export of raw wood have limited supply globally.
Some of Vietnam’s major wood and wood product importers such as the US, Australia and the EU demand to know the legal origin of wood. This means wood must come from forests grown under sustainable forest management standards of the Forest Stewardship Council (FSC) and must be imported from non-risk sources.
South Korea and Japan are also planning to tighten the management of imported wood products, the experts said, adding that this would directly impact Vietnam’s exports to those markets.
The experts recommended that Vietnamese wood processors and exporters must therefore devise solutions and long-term strategies to reduce risks and boost export growth. Local processors should choose clean raw wood to meet importers’ requirements./.
Viforest vice chairman and general secretary Nguyen Ton Quyen said the impressive growth rate in the first nine months boosts prospects of the wood sector achieving its target. The sector earned $5.9 billion in export revenue in nine months this year, up 11 percent year-on-year. The wood export turnover averaged some $700 million a month.
The wood sector earned $5.9 billion in export revenue in nine months of this year, up 11 percent year-on-year.
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The last three months of the year are generally the peak season for wood and wood product exports, so the industry’s target of $8 billion is deemed attainable.
Wood exports grew in most traditional and key markets, such as the US, Japan, the EU, China and South Korea. The value of exports to the five markets makes up nearly 90 per cent of the total, said Quyen.
In May 2017, after a six-year negotiation process, Vietnam initiated the Vietnam-EU Voluntary Partnership Agreement (VPA) on the EU Forest Law Enforcement, Governance and Trade (FLEGT).
Quyen said implementation of this agreement in Vietnam will ensure all wood products on the agreed list are legal. The document could create fundamental changes for Vietnam’s wood processing sector, as well as domestic and export markets, including nations supplying wood material to Vietnam and those buying wood and timber products from Vietnam, he added.
However, the country is facing several challenges, including the short supply of raw wood. Apart from domestic wood, Vietnam imports a large amount of wood material worth $1.7-1.8 billion annually, equivalent to about 20-30 per cent of the export turnover.
According to experts, the biggest challenge for the expansion of the wood sector was competition in raw wood purchase. China’s ban on natural forest logging, and restrictions imposed by Vietnam and other countries on the trade, exploitation and export of raw wood have limited supply globally.
Some of Vietnam’s major wood and wood product importers such as the US, Australia and the EU demand to know the legal origin of wood. This means wood must come from forests grown under sustainable forest management standards of the Forest Stewardship Council (FSC) and must be imported from non-risk sources.
South Korea and Japan are also planning to tighten the management of imported wood products, the experts said, adding that this would directly impact Vietnam’s exports to those markets.
The experts recommended that Vietnamese wood processors and exporters must therefore devise solutions and long-term strategies to reduce risks and boost export growth. Local processors should choose clean raw wood to meet importers’ requirements./.
