According to the US Hardwood Exporters’ Association, Vietnam is leading the world in terms of hardwood imports, especially sawn timber.Vietnam maintains the high growth rate at 20% in wooden furniture exports, which has resulted in the high import volume of wood materials. In the first quarter of the year, Vietnam imported $199mil worth of wood material, up by 56% over the same period last year. The biggest wood material suppliers for Vietnam are Malaysia, Laos, China, the US, Thailand and New Zealand.
According to Trang Hieu Dung, Head of the Planning Department under the Ministry of Agriculture and Rural Development, wooden furniture exports can bring more than $2bil in turnover, but the expenses for wood material imports account for 1/3 of turnover ($720mil in 2006).
Mr Dung said that 80% of the material needed for processing has to be fed by imports.
However, it has become more difficult to import wood. Malaysia and Indonesia have banned the export of round timber, and have announced they would prohibit sawn timber exports. Laos only allows a limited volume of wood material to be exported.
There are only two addresses which can be sufficient sources of wood material supply for Vietnamese enterprises: the far eastern region in Russia and Africa.
The reliance on wood material imports has been making Vietnam-made products less competitive, said Laslo Pancel, Chief Advisor of the German-funded GTZ project.
There are 420 foreign invested operational projects in Vietnam in the field of forestry, totaling $330mil. Most of the projects, run by Asian investors (Taiwan, Singapore, Malaysia, China), aim to make processing products from import materials.
Dr Marko Latila, Senior Economic Advisor under the Finnish Ministry of Foreign Affairs, said that the Government should take action to ensure long-term readiness in providing wood materials. He stressed that investment in the wooden processing industry would be successful if Vietnam could ensure the sustainable supply of materials.
If Vietnam cannot ensure the stable supply of wood material and investment in forestation cannot bring enough profit, it would be better for Vietnam to import finished wooden products, he said.