Vietnam will have to spend nearly US$1 billion importing around four million cu.m of wood for processing and re-exports in 2006, up 33 per cent on-year and accounting for nearly 50 per cent of the country’s total export turnover from woodworks, according to Nguyen Ton Quyen, general secretary of the Vietnam Timber and Forest Product Association (Vifores).
In the first seven months of this year, the country imported more than US$384 million worth of timber and wood materials to make finished wood products for exports, up over 8 per cent on year. The total import volume in the period, however, was not made available.
Vietnam’s 1,250 wood processing enterprises need more than 3.5 million cu.m of timber per year, but domestic supply meets just 20 per cent and the rest is provided by 130 foreign distributors.
Quyen said that for the last three years, the price of imported timber has increased to 20-25 per cent and timber costs are driven up because wholesalers only import 5,000-7,000 cu.m bales of wood, consignments domestic enterprises often cannot afford due to capital shortage.
“Local enterprises have to import smaller batches that have been segmented from larger bales. Shortage and shipping drives up the cost,” said Tran Quoc Manh, vice chairman of the Ho Chi Minh City Timber Processing Association, adding that prices are pushed up further because Vietnam has no ports through which timber can be imported, thus shipments must be road hauled.
Both Quyen and Manh agreed that the local woodwork industry has to as soon as possible settle timber shortage, which is seen as the biggest obstacles preventing the industry’s further development.
Recently, in an effort to relieve the timber shortage, the Ministry of Agriculture and Rural Development has submitted a project to expand the country’s total natural production forest area by 4 million ha by 2020, which will be expected to supply 45 million cu.m of timber and wood annually.
Last year, Vietnam raked in US$1.6 billion from woodwork product exports. But, the woodwork industry had to spend as many as US$667 million importing materials, accounting for 44 per cent of its total export turnover.
Holding 0.78 per cent of the world’s market share in 2005, Vietnam has surpassed the Philippines to take the tenth position in the world and fourth in ASEAN in woodwork exports.
The country is expected to increase its total export turnover from woodworks to US$2.2 billion in 2006 and US$5.5 billion in 2010.
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