Woodwork has become the sixth most important export item of Vietnam. In recent years, total export turnover of Vietnam has seen a growth rate of over 20 per cent per annum with the figure of woodwork export increasing over 38 per cent per year on average in the 2001-2005 period. Woodwork is now one among 12 export items gaining a total export turnover of at least US$500 million. At present, Vietnam has 1,250 enterprises, including 60 foreign-invested enterprises with skilled artisans, specialising in processing woodwork for export.
Vietnamese woodwork has found a foothold in 20 countries and territories. Japan, the EU and the US are leading markets for Vietnamese woodwork products, accounting for over 70 per cent of Vietnam’s total woodwork export turnover. The EU alone accounts for 28 per cent and Japan, 24 per cent. The US, despite accounting around 20 per cent, has seen a high growth in recent years.
After Vietnam joins the World Trade Organisation (WTO), local enterprises specialising in woodwork processing for export will benefit as they enjoy an import tax cut for materials and an export tax cut when their products enter foreign markets. Another advantage is that the US has imposed a high anti-dumping tax rate on woodworks made in China, a main rival of Vietnam in the US market. Local enterprises can take the opportunity to promote their export to the US.
Apart from good opportunities, challenges for Vietnamese woodworks are not small at all. This is because the volume of Vietnamese products imported by foreign countries remains low. Also, after the US imposed a high anti-dumping tax rate, some woodwork processing enterprises from China have invested in Vietnam to avoid a high import tax rate when exporting their products to the US. As a result, Vietnamese enterprises have more rivals on the same playground. More importantly, Chinese enterprises are better than Vietnamese competitors in exploiting skilful hands of Vietnamese workers. Furthermore, they have more modern technology than Vietnamese enterprises.
Vietnam has to import 80 per cent of materials. Prices of materials have increased sharply due to forest fires, floods and environmental deterioration. Transportation costs have increased due to an increase in prices of oil and petrol. Over the past three years, prices of wood materials in Vietnam have increased by between 20 and 22 per cent. This has produced negative impacts on local enterprises, which have seen their profits down significantly.
An export goods development strategy throughout 2010 has been developed. Accordingly, woodwork will have to earn a total export value of US$5.5 billion in 2010. When Vietnam joins the WTO, the woodwork processing industry will enjoy advantages and may achieve the target early. To that end, however, the industry is required to exert further efforts to overcome the above mentioned weaknesses. According to environmental analysts, if Vietnam does not improve its material conditions, in five years, Vietnam may have to import 100 per cent of materials.
Thuong Mai
Vietnamese
