11:11 | 25/02/2014 Trade
(VEN) - Vietnam Timber and Forest Product Association (Vifores) Vice President Nguyen Ton Quyen said that the US$6.2 billion wood product export target set for 2014 was absolutely feasible.
According to him, in late 2013 and early 2014, many wood processing and export companies signed export contracts, including long-term, high-value orders received from large groups such as Carfor (USA) and IKEA (Sweden), to export to the US and EU markets.
“Some businesses in Nam Dinh Province even signed five-year export contracts with the IKEA Group. Under these contracts, they will receive the IKEA Group’s assistance in terms of capital and equipment to be capable of creating products meeting the EU’s technical standards. These are the most modern wood processing facilities in Vietnam,” Nguyen Ton Quyen said.
In 2013, Vietnam exported US$5.7 billion worth of wood products, not including other forest products except timber. This was the result of macro policies of the state and great efforts of the business community.
However, the profit coefficient and added value of timber and wood product exports remain low due to increases in the price of electricity, water, labor costs and materials. Therefore, in 2014, along with efforts to seek new markets, the wood sector will pay more attention to creating products of higher added value.
Regarding market prospects predicted for 2014, Nguyen Ton Quyen said that the US economy had recovered and the Japanese economy was thriving, hence wood product exports to these two markets would possibly grow compared with 2013. The Chinese market is growing, but in the long term, Vietnam must increase the added value of wood exports to China (currently, Vietnam exports to China mostly low-tech, low-priced wood products such as shavings and woodchips).
Domestic wood businesses have also promoted exports to other potential markets such as Russia, India, the Middle East and especially Myanmar.
In the opinion of Nguyen Ton Quyen, there will be big opportunities for Vietnamese wood businesses to boost exports to the EU market, especially when the Trans-Pacific Partnership Agreement (TPP) and the Vietnam-EU Free Trade Agreement (VEFTA) are signed. “The signing of the TPP and the VEFTA will facilitate the access of Vietnamese wood products into the EU market. However, we are considering to decide which one of the two markets to focus on as well as which technologies to apply and which products to be exported so that businesses can take the initiative in production,” Nguyen Ton Quyen said.
In his opinion, a Voluntary Partnership Agreement (VPA) between Vietnam and the EU will help ensure that Vietnamese timber and wood products can maintain their positions in the EU market while striving to access other markets.
“Under the VPA, Vietnamese businesses will receive more support to increase their market shares in the EU and their products can be exported to the EU at higher prices. But the agreement will also require domestic businesses to cope with more difficulties because Vietnam will have to make changes in terms of the legal corridor. However, the implementation of the VPA and the EU Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan will help improve forest farmer incomes, forest management and business administration. It will also help Vietnam improve wood industry development policies and mechanisms,” said Nguyen Ton Quyen./.
By Nguyen Tien Dung