Wood sector to earn more on woodchips, pellets

Illustrative image (Photo: VNA)

Hanoi (VNA) – Vietnamese exporters of wood and wooden furniture expect to bring home 16.5 billion USD this year, fueled by an increase in the overseas shipment of woodchips and wood pellets in the first 10 months of this year. 

Unprecedented growth in export of woodchips, wood pellets 

According to a timber wholesaler in Dong Hy, the northern province of Thai Nguyen, prices of sawn timber (big wood) are almost the same as those of wood chips which are only 20,000 VND per tonne different. Hence, growers are racing to cut them down and sell to woodchip factories.

Notably, while the export of wooden furniture and laminated wood is frozen, woodchips and wooden pellets have been lining up for overseas shipment over the past 10 months. 

Do Van Hai, Director of the Hai Oanh Forestry Production-Export and Import Co.Ltd based in the central province of Thanh Hoa, said without the “heated up” export of woodchips and wood pellets, it would be difficult for his company to survive as the shipment of laminated wood slowed down in late 2021 and came to a halt in April 2022. 

"If we stop making woodchips, our business will die because of heavy bank interest rates,” Hai said.

Nguyen Thi Thu Thuy, Director for Forestry and Materials at Biomas Fuel Vietnam company based in the central province of Nghe An, said to meet requirements of the most demanding markets like Japan, the US and the European Union, wood pellets must meet quality and have clear origin. Apart from the traditional market of Japan, her company plans to expand to Europe as demand for pellets as a winter heating material is growing. 

Wood export expected to bring home 16.5 billion USD 

 
According to the Ministry of Agriculture and Rural Development, the wood sector earned 13.5 billion USD from export in the first 10 months of this year, up 11.4% annually. Contributions by woodchips and pellets turned them into a “phenomenon” in the wood export landscape. During the period, pellets raked in over 603 million USD, up 81% in value year-on-year while woodchips brought home nearly 1.8 billion USD compared to 1.7 billion USD last year. These two products are expected to earn a turnover of about 2.8-2.9 billion USD this year. 

Data from the Ministry of Industry and Trade (MoIT) showed that the export of wood and wooden products is estimated at 13.5 billion USD in the first 10 months of this year, up 11.4% year-on-year. Of the figure, 9.3 billion USD were from wooden products, marking a 2.7% increase. 

President of the JCI Vietnam Vu Tuan Anh said Chinese merchants are looking for woodchips from Vietnam to serve paper production and provide them as materials for pellet factories in China. 

With limited supply at home, China will continue relying on neighbouring countries for wood materials. This will create opportunities for Vietnamese wood exporters, he said. 

According to the MoIT’s Export-Import Department, not only the EU market, the demand for woodchips and pellets in Asia is surging, mostly in the Republic of Korea and Japan that are switching from coal-fired to clean electricity, including biomass power.

On the sidelines of the recently-held 2022 Vietnam International Woodworking Industry Fair (Vietnam Wood), Vice Chairman of the Handicraft and Wood industry Association of HCM City Nguyen Chanh Phuong said the total wood export in the fourth quarter may hit around 4.5 billion USD, bringing the total to 16.9 billion USD this year, up 14% annually./.