VietNamNet Bridge – Nguyen Ton Quyen, Deputy Chairman of the Wooden and Forestry Products Association, talked about the problems of the wood processing industry.

What would you say about the business results of wood processors in 2007?

 In 2007, the total export turnover of wooden products reached $2.5bil, an increase of 21% over 2006. However, the high growth rate could not make wood processors happy because they were still facing a lot of difficulties.
The materials for wood processing are seriously lacking. The added value of exported wooden products remained low. Meanwhile, the Government still did not release the overall plan on wooden products development.
Therefore, though gaining the high growth rate of 20% in the last few years, Vietnamese wood processors still have small production scale, while they do not have good cooperation with colleagues. The spontaneous development of the wooden processing industry is the inevitable result of the tardiness in setting up a master plan for the wood processing industry.

 You have said that one of the biggest problems now is the lack of materials, because of which Vietnamese enterprises have to rely on material imports. Could you please tell me more about this?

 Vietnam is striving to develop 825,000 ha of forests in 2006-2020. It is expected that the total wood output ready for exploitation would be 20mil cu m a year by 2020, meeting 70% of the demand.
As we estimate, we have to wait 10 more years at least to be able to take the initiative in wood materials, when the forests can be exploited. In the near future, we have no other choice than importing wood materials.

 So, the key issue now to develop the wood processing industry is to make heavy investments in forests?

 Currently, most of the forest land (nearly 5mil ha) are being managed by state owned yards and local authorities. 3.1mil ha of land have been allocated to more than 1mil households and individuals to develop forests, but 20-30% of the allocated land have been used for other purposes, while the other 70% cannot bring the desired effects. Meanwhile, a lot of big investors, who have forestry projects, are not allocated land.
So, the key issue now is to have suitable mechanism to encourage investments on forest projects.

 As you have said, Vietnamese enterprises will still rely on material imports for some more years. What do they have to do to ease the negative impacts of this reliance?

 The Prime Minister has approved the project on setting up an online wood trading floor, which has the total investment capital of VND5bil. Vietnamese enterprises will get the information about the world’s market and legal issues from the trading floor, which will help them take the initiative in negotiating with partners and importing materials
Regarding the plan on setting up the wood market, there no feasible project has been suggested so far, though enterprises understand that if the market becomes operational they will be able to save up 10% of total costs at least.
I have to say that Vietnamese enterprises remain very weak in cooperating with each other. Therefore, they will find it hard to reach the agreements on getting involved in big wood import deals, where several tens cu m of wood are imported at once, which allows for the reduction of import cost.

 
What are do you think the key points of the master plan for the wood processing industry?

 It is necessary for Vietnam to define the key products for the wood processing industry, which are the competitive products of Vietnam on the world’s market: wooden furniture, fine arts or artificial boards.The definition of the key products will decide the planning of material growing areas and investments levels. It is expected that in 2008, fact-finding trips, surveys and national conferences will be organized before the national master plan on the wood processing industry is set up.

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