At a wood working factory (Photo: VNA) HCM City (VNA) - The various components of the woodworkingindustry’s supply chain need to establish close links to ensure the industry’ssustainable development, an expert has said.
Such linkages would bring many benefits,including efficient utilisation of resources, increase in specialisation,reduction in risks, more market opportunities and higher profits, To XuanPhuc of the sustainable forestry NGO Forest Trends organisation, said.
He was speaking at a forum held in HCM City lastweek by the Vietnam Timber and Forest Product Association,the Handicrafts and Wood Industry Association of HCM City, Forest Trends,and the Forest Products Association of BinhDinh.
There are around 4,300 businesses in theVietnamese woodworking industry employing thousands of workers, he said.
But vertical and horizontal linkages in the industry,including links between wood processors, timber suppliers and forestgrowers, and between firms in the same sector, remain weak mainly due to a lackof trust and fair sharing of benefits, he said.
It is one of the country’s key exportindustries, with export revenues going up every year and expected to continuerising in the coming time, he said.
“But there remain some systemic shortcomingsthat affect the sustainable development of the industry.”
Vietnamese companies tend to invest in theentire production chain, which often means the investment is spread toothin, technologies are mismatched, and there is no specialisation at anystage in the supply chain, he said.
Besides, there is no supporting industry for the woodworkingindustry, and as a result its productivity is much lower than in Thailand orMalaysia, he said.
A shortage of raw materials also threatens thesustainable development of the industry.
Dien Quang Hiep, chairman and director of MIFACO Co., Ltd, said:“A majority of firms in the industry are small or medium-sized, and if we donot link up we [cannot] compete with large foreign firms.
“These linkages would determine the very survival of theindustry,” he said.
The businesses in the industry are scattered and so it is hard forthem to link up and work together, he said.
The creation of a wood processing industry cluster would providecompanies the opportunity to share information, resources and export orders, hesaid.
This needs support from the Government and localities, he said.
Vo Quang Ha, general director of Tan Vinh Cuu Joint Stock Company(Tavico), said to successfully forge linkages, enterprises must have the samedirection and a common goal.
They need to discuss ways to develop linkagesand avoid conflicts, he said.
The association must play a greater role as anintermediary to bring them together for mutual benefit, he said.
Companies should establish close links with households that growforests to ensure a steady source of timber and reduce risks, delegates toldthe forum.
Nguyen Quang Vinh of the Vietnam Timber andForest Product Association, said planted forests have become the main source oftimber for Vietnam’s wood processing industry.
To develop a steady and legitimate source oftimber, some linkages have been established between wood processing companiesand households growing forests, he said.
For instance, companies making products for IKEAGroup, one of the world’s largest woodproducts company - such as Nam Dinh Forest Products JSC (NAFOCO),Woodsland JSC, and Scansia Pacific - have tied up with households in Phu Tho,Tuyen Quang, Yen Bai, and Quang Tri provinces to grow forests certified by theForest Stewardship Council, he said.
They use the certified sustainable wood to makeproducts for IKEA, he said.
This model helps improve benefits for thehouseholds and ensure a steady supply of timber for the companies, headded.-VNA
VNA
