Local wood enterprises will face a tougher price and product quality competition with their rivals from other parts of Southeast Asia next year when the ASEAN Economic Community (AEC) takes shape, the Saigon Times Daily reported.
When the AEC is formed, enterprises in ASEAN countries will enjoy free tariffs on their many goods exported to Vietnam, said Huynh Van Hanh, Vice Chairman of the Handicraft and Wood Industry Association of HCM City (HAWA).
Tariff exemptions will make life harder for Vietnamese producers, particularly wood firms, on the local market, Hanh was cited as saying at a news briefing held in HCM City last week to introduce the Vietnam Furniture & Home Furnishing Fair, or VIFA Home 2014.
Thailand and Malaysia have been named as Vietnam's major competitors in the wood sector as their companies have already invested in wood processing factories in this market, Hanh said.
Currently, Thai companies look more aggressive in their plans to acquire supermarkets and attract distributors to realise their targets to make and sell their products in Vietnam.
More challenges will also be from China as Chinese wood products abound in the north of Vietnam though imports from the northern neighbour declined in the first six months of this year.
Imported wood products accounted for 20 percent of the domestic market in the first half of this year, and furniture shipments from China fell sharply. “The shrinking percentage is a good sign as the figure was 30-40 percent in previous years,” Hanh was quoted as saying.
A lack of timber is also a great challenge for the local wood sector because domestic supply now can meet only half of the demand for wood product processing and export.
Last year, Vietnam chopped down 15 million cubic metres of cajuput trees and shipped ten million cubic metres of the volume to China and other markets including Japan and Hong Kong. China used the wood material to produce furniture for export to Vietnam at much high prices, Hanh said.
To help the local wood sector prepare for the challenges, Hanh suggested the Government draw up proper policies to develop wood factories near forests in the central region to enable enterprises to process wood on the spot before having it transported to furniture makers, helping firms save up to 75 percent of transport costs.
Nguyen Chien Thang, Chairman of Alliance Handicraft Wooden Fine Art Corporation, said to ensure material supply and reduce costs, his company is working on a project to financially support tree growers in the central province of Quang Tri.
In previous years, growers cut down five-year-old trees for sale to have money for their daily expenditure though wood from these young trees was of low economic value. With the project, they are assisted to keep their forests for four to five years more to ensure higher quality of their wood material.
The Ministry of Agriculture and Rural Development estimated the combined exports of timber and wood products at 528 million USD last month and 4.98 billion USD in the January-October period, rising 12.8 percent year-on-year. The ministry aims for 6.3-6.5 billion USD this year.
VIFA Home 2014 will take place in Ho Chi Minh City from November 6 to 9 with the participation of 115 enterprises.-VNA
When the AEC is formed, enterprises in ASEAN countries will enjoy free tariffs on their many goods exported to Vietnam, said Huynh Van Hanh, Vice Chairman of the Handicraft and Wood Industry Association of HCM City (HAWA).
Tariff exemptions will make life harder for Vietnamese producers, particularly wood firms, on the local market, Hanh was cited as saying at a news briefing held in HCM City last week to introduce the Vietnam Furniture & Home Furnishing Fair, or VIFA Home 2014.
Thailand and Malaysia have been named as Vietnam's major competitors in the wood sector as their companies have already invested in wood processing factories in this market, Hanh said.
Currently, Thai companies look more aggressive in their plans to acquire supermarkets and attract distributors to realise their targets to make and sell their products in Vietnam.
More challenges will also be from China as Chinese wood products abound in the north of Vietnam though imports from the northern neighbour declined in the first six months of this year.
Imported wood products accounted for 20 percent of the domestic market in the first half of this year, and furniture shipments from China fell sharply. “The shrinking percentage is a good sign as the figure was 30-40 percent in previous years,” Hanh was quoted as saying.
A lack of timber is also a great challenge for the local wood sector because domestic supply now can meet only half of the demand for wood product processing and export.
Last year, Vietnam chopped down 15 million cubic metres of cajuput trees and shipped ten million cubic metres of the volume to China and other markets including Japan and Hong Kong. China used the wood material to produce furniture for export to Vietnam at much high prices, Hanh said.
To help the local wood sector prepare for the challenges, Hanh suggested the Government draw up proper policies to develop wood factories near forests in the central region to enable enterprises to process wood on the spot before having it transported to furniture makers, helping firms save up to 75 percent of transport costs.
Nguyen Chien Thang, Chairman of Alliance Handicraft Wooden Fine Art Corporation, said to ensure material supply and reduce costs, his company is working on a project to financially support tree growers in the central province of Quang Tri.
In previous years, growers cut down five-year-old trees for sale to have money for their daily expenditure though wood from these young trees was of low economic value. With the project, they are assisted to keep their forests for four to five years more to ensure higher quality of their wood material.
The Ministry of Agriculture and Rural Development estimated the combined exports of timber and wood products at 528 million USD last month and 4.98 billion USD in the January-October period, rising 12.8 percent year-on-year. The ministry aims for 6.3-6.5 billion USD this year.
VIFA Home 2014 will take place in Ho Chi Minh City from November 6 to 9 with the participation of 115 enterprises.-VNA
