Woodwork industry needs complete overhaul

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SaigonTimes English - 32 month(s) ago 6 readings

HCMC – It will be hard for the local woodwork industry to develop in the near future due to the lack of connectivity between production steps and the absence of sufficient policies, said industry players.

Woodwork industry needs complete overhaul

Wood assoc. wants tax slapped on wood scrap export

By Thai Hang and Pham Thai - The Saigon Times Daily

HCMC – It will be hard for the local woodwork industry to develop in the near future due to the lack of connectivity between production steps and the absence of sufficient policies, said industry players.

Nguyen Chien Thang, director of Scansia Pacific, a large wood processor in Binh Duong Province, said an an industry meeting last Friday that his company had lost an export order to a Chinese rival.

Thang had received an order of 500,000 sets of tables made of fir from IKEA, a woodwork retailer in Sweden.

However, he failed to seal the deal as the Chinese rival offered the customer a price level of US$67 a set, which is five dollars cheaper than his asked-for price.

“Chinese companies no longer focus on processing raw materials like wood but their competitive capacity is still overwhelming with cheap products,” Thang admitted.

According to Thang, input material areas in Vietnam are scattered and therefore there is no connectivity between these areas and wood processing mills. This has pushed up the prices of products, Thang added.

Vo Truong Thanh, chairman of Truong Thanh Furniture Corp., noted the present mechanism had yet to allow forestry growers to be granted land ownership certificates. Meanwhile, he stressed, this is one of the ten criteria that is required by large wood import markets such as the U.S. and European nations.

The General Office of Forestry said forestry growers and wood processors for export had faced a lot of difficulties in expanding production space as well as hiring forestry-growing land. This has resulted from troublesome administrative procedures and underdeveloped planning of forestry-growing land at home.

The instability of material supply, the shortage of connectivity among related sides alongside inappropriate policies and mechanism have discouraged investors so far, according to the office.

* Owing to the current massive export of wood sawdust, the Handicraft and Wood Industry Association of HCMC (HAWA) has sent a petition to the Ministry of Finance, urging for taxes to be slapped on this material.

According to HAWA vice chairman Huynh Van Hanh, the proposal is to prevent a large quantity of wood sawdust from being shipped abroad, especially to China.

Hanh said local demand for wood scrap has been on the rise due to the overwhelming presence of plywood manufacturers. Besides, multiple importers from Europe and South Korea have shown keen interest in products made from wood sawdust.

“These orders bring in high profits while they only need low processing technology. However, the uncontrolled export of input materials has pushed up the price of these materials at home,” Hanh noted.

Scansia Pacific director Nguyen Chien Thang earlier suggested the Government to map out planning zones for input wood material areas to utilize wood sawdust and shaving. He supposed these raw materials when used to produce plywood products would create value higher than when exported as raw materials.

Meanwhile, forestry growers in a meeting held last Friday in HCMC reported they had no choice but to exploit wood earlier than expected to make wood chips or even sawdust for export because of capital shortage.

At present, wood scrap is priced at VND500,000 a ton while the price of one ton of sawn timber is four times higher.

The Import - Export Department under the Ministry of Industry and Trade said it would review the situation to submit suitable solutions to the Ministry of Finance.

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