Export growth of timber industry likely to plummet to 0%

VCCI – The novel coronavirus (COVID-19) has served to have a negative impact on Vietnam’s timber industry with the industry poised to record export growth equal to 0% this year, according to insiders.

At the online seminar 

Information on the decline was analysed during an online seminar held on April 28 discussing sustainable development within the timber industry following the COVID-19. The event was jointly held by the Forest Trends Organization, the Handicraft and Wood Industry Association of HCM City, the Vietnam Timber and Forest Product Association, and wood processing associations from different localities.  

Indeed, the timber industry has set a primary target of reaching US$12 billion in export turnover this year. The General Statistics Office (GSO) reported that the first quarter of the year saw the country gain a total export value of US$2.58 billion, an annual increase of 13.9% and fulfilling 21.5% of the yearly plan.

With the COVID-19 pandemic causing an adverse effect on several markets in April, approximately 80% of orders have been suspended while major export markets have been almost frozen. Therefore, it is anticipated that the industry’s export growth will be negative over the course of the year. 

According to a survey conducted among 124 enterprises operating in the industry at the end of March, 100% of firms have been affected by the COVID-19 epidemic while 75% of businesses said that the initial damage stands at an estimated VND3,066 billion (US$130 million).

Over half of the companies questioned said that they have been forced to scale down production, while 35% of the respondents will have to suspend production ahead in the near future. In addition, 7% of the respondents have ceased operation, although only 7% are still able to operate normally.

Experts believe that in order to remove barriers faced by local enterprises, the government should introduce new mechanisms and policies aimed at supporting enterprises, noting that businesses must be quick to adapt to the new situation. 

Overall, the national timber industry must change its way of thinking such as strengthening connectivity among enterprises in the industry, establishing domestic supply chains, and developing supporting industries. 

The impact of the COVID-19 shows that the country’s wood export supply chains are partly dependent on raw materials imported from China.

Experts said there are opportunities to reduce this dependence through a number of different trade agreements Vietnam has signed with its partners over the years, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership  (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA), and the Vietnam-Korea Free Trade Agreement (VKFTA). Thanks to these agreements, the timber industry can enjoy a transformation in terms of production, orders, and investments from European nations, the United States, and Japan.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sales
Select the fields to be shown. Others will be hidden. Drag and drop to rearrange the order.
  • Image
  • Description
  • Attributes
Compare
%d bloggers like this: