Export Wood Processing Industry: Cooperation for Development

Binh Dinh province is considered the capital of wooden furniture in the central region and one of four wood processing export centres in Vietnam.

However, business performance among local wood companies has tended to go down in recent years. So, what needs to be done to revive and develop the export wood processing industry of Binh Dinh province?

 

Export wood processing industry is a leading economic sector of Binh Dinh province as it contributes up to 60-65 percent to the local export turnover. But, in recent years, production and business activities of local enterprises have been alarmingly declining.

 

In 2012 alone, the province’s woodwork export turnover declined nearly 18 percent year on year to about US$186 million. In particular, the value of exported outdoor woodwork slumped nearly 19 percent.

 

Mr Do Xuan Lap, President and CEO of Tien Dat Co., Ltd, said there are a lot of reasons for the slump of Binh Duong province’s wood processing industry. Objectively, global financial crisis and economic recession plus EU debt crisis have forced most EU nations to adopt austerity measures and reduce spending. As a result, woodwork export to this huge market has been also affected.

 

Besides, local wood processing enterprises have faced technical barriers imposed by importing countries. Subjectively, wood processors have a lot of shortcomings like rising input costs, unequal product quality, and overdue deliveries.

 

Mr Le Van Hong, General Director of Binh Dinh Production, Investment, Services, Im-Ex Corporation (Bixico), said that weaknesses of Binh Dinh province-based wood processing companies are weak personnel, ineffective corporate governance, and low interest in modern equipment and expertise.

 

Local firms also made ineffective investments like investment for real estate. They also lacked cooperation and even performed unfair competition with each other for individual interests.

 

At present, the export wood processing industry now needs practical, effective measures to support businesses to boost up recovery, stability and development. Mr Do Xuan Lap affirmed that market expansion is crucial for sustainable and efficient development of enterprises.

 

This requires companies to have an excellent marketing force, dare to take big orders and guarantee punctual delivery. They also have to improve competitiveness, customer understanding and market information to produce best products for the market in their capacity.

 

Besides, they necessarily optimise expertise and technologies to reduce costs and maximise profits.

 

Mr Le Van Hong said companies should not perform unfair competition or use price wars. Instead, they should cooperate with each other to strengthen production capacity, deepen expertise and diversify products.

 

This will help them increase productivity, reduce costs, improve production and business efficiency. Big companies should support orders, governance experience, and business capital for smaller enterprises.