The Government plans to develop 8.4 million ha of forest by 2020 to generate 22 million cu.m of wood of various kinds to ensure sufficient supply for domestic production activities, according to the Handicraft and Wood Industry Association of HCM City (HAWA).

HAWA Vice Chairman Tran Quoc Manh said that, with the 8.4 million ha of forest in 2020, domestically produced wood materials will be able to replace imported materials.

" Vietnam now has to import between 70 and 80 percent of wood materials for producing export wood products annually," Manh said.

In 2011 alone, wood enterprises had to spend 1,209 million USD on importing wood materials, and the fund was 340 million USD in the first quarter of this year.

Vietnam 's main wood material exporters are Laos (30.8 percent), the US (14.1 percent), China (8.9 percent) and Malaysia (8.8 percent).

"The main wood imports include medium-density fibreboard or MDF (accounting for 12.8 percent), rosewood (11.2 percent), ironwood (8.4 percent), pine (7.1 percent) and poplar (5.0 percent)," Manh said.

In 2008 the country had 12.9 million ha of forest, including 10.3 million ha of natural forest and 2.6 million ha of planted forests.

Figures also show that between 2002 and 2007 the country's forest coverage grew by 0.5 per ent annually due to Government and public efforts in forest protection and development.

However, domestic forests still can meet only 30 percent of wood producers' demand for wood materials, Manh said at a conference held recently in HCM City.

In addition to extending the country's forest coverage, Manh said the domestic wood industry also planned to carry out several measures to become one of the leading manufacturers of wooden furniture in Southeast Asia .

According to the plan, the industry will continue participating in the global supply chain and value chain, and intensify investments in trade promotion.

The industry will also set up bonded and unbonded warehouses in overseas markets, and identify major importers in those countries who can help Vietnamese wood enterprises directly sell their products.

Vietnam has 2,526 wood processing enterprises, including 300 foreign-invested companies, with 600 factories specialising in manufacturing export wood products. These have created 250,806 jobs.

According to the Ministry of Industry and Trade, the industry's export value increased from 219 million USD in 2000 to over 3.9 billion USD in 2011. In the first quarter of this year, the industry exported nearly 1 billion USD of products.

Wooden products have become one of the country's major export earners in addition to rice, seafood, textiles and apparel and footwear.

The industry's annual growth rates have been high, with 31.2 percent in 2010, 13.7 percent in 2011, and 18.3 percent in the first three months of this year.

In addition to these successes, the domestic wood processing industry still has some limitations that restrict enterprise development, according to Manh.

"Reliance on imported materials, lack of market information and good managers, designers and marketing workers are the biggest obstacles for domestic wood processors," he said.

Most wood processors are small – and medium-size companies that use manual workers whose labour productivity is low.-VNA