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REPORT Demand on raw wood for processing wood and wood products exported to the EU market in the context of the implementation of the EVFTA and the VPA commitments
By: Centre for Sustainable Rural Development l Hanoi
Published: September 20, 2022
Countries: Vietnam
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Document type: Report
Document ID: 9338
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REPORT Demand on raw wood for processing wood and wood products exported to the EU market in the context of the implementation of the EVFTA and the VPA commitments

 

 

 

 

 

REPORT

Demand on raw wood for processing wood and wood products exported to the EU market in the context of the implementation of the EVFTA and the VPA commitments

 

 

Researchers:

  • Prof. Nguyen Ba Ngai (Ph.D.) – Team leader
  • Tong Thi Phuong (Ph.D.)
  • Tran Thi Hai Yen (MSc)
  • Tran Ngoc The (Ph.D.)
  • Vu Xuan Thon (PhD)
  • Tran Huy Le (MSc)

 

 

 

 

 

 

 

 

Ha Noi, August 24th, 2022

 Contents

LIST OF FIGURES/ PICTURES. 4

LIST OF TABLES. 6

LIST OF ABBREVIATIONS. 7

SUMMARY.. 8

PART I: RESEARCH ISSUES. 11

PART II: RESEARCH OBJECTIVES, SUBJECTS, CONTENTs AND METHODS. 13

  1. Objectives. 13
  2. Subjects. 13
  3. Contents. 13
  4. Research Methods. 13

4.1.       Collecting, synthesizing, and analysing secondary documents. 13

4.2.       Research sites. 14

4.3.       Method of investigating W&WP processing enterprise. 14

4.4.       Data collection and processing methods. 15

4.5.       Expert consultations. 15

PART III: RESEARCH RESULTS. 16

  1. General situation of processing W&WP for export to the EU market 16

1.1.       On a national scale. 16

1.2.       Facts from investigated enterprises. 17

1.3.       Conclusions. 22

  1. Raw wood for processing W&WP for export to the EU market 22

2.1.       Imported wood. 22

2.2.       Domestic wood. 31

  1. The raw wood demand forecast for processing W&WP for export in the period 2022 – 2030. 42

3.1.       Quantity demand. 42

3.2.       Demand for wood type, quality, and legality of raw wood  48

3.3.       Some conclusions about the demand on wood for processing W&WP for export to the EU market 50

  1. Preferential policies in support of processing W&WP for export 50

4.1.       Preferential policies in support of W&WP processing enterprises. 50

4.2.       The situation of implementing preferential policies and supporting W&WP processing enterprises. 53

4.3.       The demand for policy innovation promotes enterprises to gradually reduce the use of imported wood and increase the use of domestically planted forest wood for processing W&WP for export 60

  1. Proposing solutions and policy recommendations. 62

5.1.       Proposing solutions. 62

5.2.       Recommendations for orienting preferential policies and supporting W&WP processing. 64

PART IV: CONCLUSIONS AND RECOMMENDATIONS. 66

  1. Conclusion. 66
  2. Recommendations. 67

REFERENCES. 68

APPENDIX.. 70

 

 

 

LIST OF FIGURES/ PICTURES

Figure 1: Chart of changes in the number of W&WP processing enterprises in the period 2016-2020. 15

Figure 2: The proportion of enterprises exporting W&WP to the EU market 16

Figure 3: Product type structure of surveyed enterprises. 17

Figure 4: The size of enterprises producing other products. 20

Figure 5: The value structure of other products exported to the EU market (wood chips, pellets, etc.) 20

Figure 6: Percentage of W&WP processing enterprises using imported raw wood. 22

Figure 7: The percentage of use of imported raw wood to produce products exported to the EU market 24

Figure 8: Imported raw wood. 24

Figure 9: The type of wood that is required to be imported because there is no substitute material 25

Figure 10: Evaluation of the advantages of imported raw wood. 26

Figure 11: Board import rate by years. 27

Figure 12: Total volume of imported boards by year. 27

Figure 13: Trend of imported board wood by maximum value (max) 28

Figure 14: The main imported boards. 28

Figure 15: Quality assessment of imported boards. 29

Figure 16: Domestic raw wood for the period 2017-2021. 31

Figure 17:The percentage of enterprises using domestic wood. 31

Figure 18: The average amount of domestic lumber and logs used by years. 33

Figure 19: Domestic demand for wood in 3 years (2019-2021) 33

Figure 20: Domestic raw material structure used to produce W&WP for export to the EU market 34

Figure 21:  The proportion of using domestic wood for W&WP production and export to the EU market 35

Figure 22: Assessment of domestic wood that can replace imported wood. 35

Figure 23: The domestic wood area where enterprises purchase raw wood. 36

Figure 24: Assessing the advantages of domestic wood. 37

Figure 25: Assessing the disadvantages of domestic wood. 38

Figure 26:.Rate of domestic use of board wood by years. 39

Figure 27: The amount of domestic board material used over the years. 40

Figure 28: W&WP export value from 2017 to 2021 and projected export value growth from 2022 to 2030. 42

Figure 29: Correlation analysis between raw wood quantity and export value. 44

Figure 30: Enterprises’ forecast of export value to the EU market 46

Figure 31: Demand for wood. 48

Figure 32: The status of benefiting from the policies of the enterprise. 53

Figure 33: Difficulties in implementing the policy of land use levy exemption and reduction. 54

Figure 34: Difficulties in implementing credit loan support policies. 55

Figure 35: Difficulties in implementing policies to support infrastructure construction. 56

Figure 36: Difficulties in implementing policy to support production capacity development 57

Figure 37: Difficulties in implementing market development policy. 58

Figure 38: Proposing policies to promote enterprises to use wood from domestic plantations. 60

 

LIST OF TABLES

Table 1: Distribution of enterprises responding to the questionnaire and direct interviews, by province. 14

Table 2: Three-year change in the export value of indoor furniture products. 18

Table 3: Changes in export value of outdoor products in 3 years of processing enterprises. 18

Table 4: Changes in export value of artificial boards in 3 years of enterprises. 19

Table 5: Changes in the rate of imported wood in 3 years of processing enterprises. 22

Table 6: Criteria for assessing the quality of imported wood. 25

Table 7: Changes in the rate of domestic use of raw wood in 3 years by processing enterprises. 32

Table 8: W&WP export value from 2017 to 2021 and projected export value growth from 2022 to 2030. 42

Table 9: The supply of wood from 2017 to 2021. 43

Table 10: The raw wood demand forecast in the period 2022-2030. 45

Table 11: W&WP export value in the period 2017-2021. 46

Table 12: Forecast of demand for wood for W&WP production exported to the EU market in the period 2022 – 2030. 47

Table 13: Summary of results of the assessment of the implementation of export tax policies for leading W&WP products. 59

 

 

 

 

LIST OF ABBREVIATIONS

 

MARD

BIFA

Ministry of Agriculture and Rural Development

Binh Duong Woodworking Association

W&FPP Wood and Forest Products Processing
EU EU Union
EVFTA EU Union – Viet Nam Free Trade Agreement
FPA Binh Dinh Binh Dinh Timber and Forest Products Association
FSC Forest Stewardship Council
W&WP Wood and Wood Products
HAWA Handicraft and Wood industry Association of Ho Chi Minh city
KCN Industrial area
PEFC Programme for the Endorsement of Forest Certification
REACH Registration, Evaluation, Authorization and Restriction of Chemical Substances
SSI Semi-Structured Interview
LTD Limited Liability
US$ US Dollar
VIFOREST Viet Nam Timber and Forest Product Association

 

 

 

 

SUMMARY

1) Researching the demand on raw wood for processing  wood and wood products exported to the EU market to meet the EVFTA Agreement’s requirements, as well as putting the VPA commitments into action, in order to: i) Analyse the situation of raw wood and forecast demand for raw wood for processing W&WP for export to the EU market in 2022 – 2030; ii) Analyse the policy implementation situation and recommend policy orientation; assist processing enterprises in gradually reducing the use of imported wood and increasing the use of domestically planted forest wood for processing and exporting W&WP to the EU market. The content of the research focuses on: i) Assessment of the current situation and forecast of the demand for raw wood for processing W&WP for export to the EU market and solutions; ii) Review and evaluate the implementation of policies and recommend orientations for preferential policies, supporting processing enterprises to gradually reduce imported wood and increase the use of domestically planted forest wood.

2) Research has collected, synthesized, and analysed secondary documents and selected 3 regions representing 3 regions (North, Central, and South). In each region, select several localities (provinces) as research sites; survey 46 enterprises by questionnaire; in-depth interviews with 16 processing facilities. Interview data was extracted from KoboToolbox software via MS. Excel software has been checked, cleaned, and encrypted. Use IBM SPSS Statistics 22 software to analyse descriptive statistics, charts, and explore relationships (if any). The research has received comments from experts, scientists, and managers at 3 technical meetings and 1 workshop.

3) Research results identify 5 main export product groups, including: indoor furniture, outdoor furniture, artificial boards, construction wood, wood pellets, and flooring. In which, indoor or and outdoor furniture account for over 83% (53% of indoor furniture and 30% of outdoor furniture). Some main findings of the study have been found: i) The annual value of Viet Nam’s W&WP exports to the EU market recently accounted for about 8% of the country’s total export value; ii) The number of W&WP exporting enterprises to the EU market accounts for a low proportion of the total number of W&WP processing enterprises with export activities; iii) Viet Nam’s W&WP exported to the EU market are mainly indoor and outdoor furniture. This product group has specific requirements for raw wood of which some are required to import from the EU; iv) W&WP exported to the EU has high requirements for legal timber traceability and meets quality and safety standards for users.

4) The research results show that 87% of enterprises use imported wood to produce W&WP, and only 13% of enterprises do not use imported wood. Enterprises mainly use imported logs, lumber, and artificial boards for production W&WP to export to the EU market. Nine types of wood imported into Viet Nam have been identified (wood species such as acacia, eucalyptus, teak, ash, walnut, white oak, red oak, poplar, and beech) and evaluate the profitability, existence, and limitations of wood imports. The research has discovered some important points: i) Import of wood used to produce products for export to the EU accounts for approximately 37% of total raw wood imports; ii) Import of raw wood is limited, consisting primarily of logs, lumber, and imported MDF in response to EU orders; and iii) The quality requirements of imported wood is higher in comparison to domestic wood, with 100% of the wood requiring FSC and PEFC international certificates as well as compliance with the provision; iv) The price of imported raw wood tends to increase due to the impact of inflation, gasoline prices and military conflicts in some areas.

5) Research results on domestic wood show that: 90% of enterprises use domestic wood; 10% of enterprises do not use domestic wood; identified the main domestic wood species including: acacia 37%, melaleuca 21%, rubber 16%, other woods (eucalyptus, pine, teak ..) about 26%, and raw wood from domestically produced artificial boards; identified the main raw material areas (North, Central, South) and analyze the advantages and disadvantages of domestic wood. The study also found some important points about domestic wood: i) The amount of domestic wood used for W&WP production exported to the EU market tends to increase; ii) Acacia, melaleuca, rubber, and pine are the types of wood that are highly appreciated by enterprises for their quality, quantity, and stability. Melaleuca, rubber, and pine wood can replace imported wood. iii) The EU market tends to switch to using our country’s wood products because they are cheaper than imported wood; iv) The quality of raw wood (especially acacia wood) tends to decrease, such as wood with many defects, many knots, small diameter size, uneven colour, etc; v) Lack of investment in exploitation, preliminary processing, drying, etc.

6) The forecast of demand on raw wood for processing W&WP for export in the period of 2023 – 2030 shows that: i) The demand for raw wood for W&WP production to be exported to the EU in the whole period is 4.47 million m3, on average need 4.61 million m3/year, of which 1.7 million m3/year needs to be imported and 2.9 million m3/year of domestic timber is required annually; ii) Legal raw wood for W&WP processing will be strictly controlled by the implementation of the EVFTA and FLEGT agreements within the EU and Viet Nam, and strictly controlled according to the regulations of each country in the EU.

7) The results of the review of preferential policies and support for processing W&WP for export reveal the following main findings: i) In addition to the preferential export tax policy, the current preferential policies to support enterprises are less suitable, especially policies on land and credit policies; ii) The policy of industrial zones is not suitable with the production characteristics of W&WP processing facilities, such as increasing the cost of raw wood due to multiple layers of the raw wood supply network (exploitation, preliminary processing, drying facilities); high land and infrastructure rental costs, not directly benefited to the policy of infrastructure development, land rental prices; iii) Enterprises accessing policies face many difficulties because of the complexity and impracticality for W&WP processing enterprises, and sometimes may face risks due to declaration to access policies. The most complicated or unclear procedure is the policy on capital support or the government’s support packages, so enterprises pay little attention to the preferential and support policies; iv) Policy propaganda and dissemination is still limited.

8) Solutions for raw wood for processing W&WP for export to the EU market focus on: i) Solutions for effective management of raw wood that require planning to create a centralized and large enough raw material area, associated with the planning of processing facilities, consumption markets and creating chain links, especially linking sustainable wood supply; ii) Solutions to improve the quality of domestic raw wood, focusing on the application of science and technology to the production of raw wood, including selecting varieties, creating varieties, controlling and ensuring the quality of forest varieties, improving technical measures for forest intensive farming; iii) Solutions for technical improvement, production level focusing on investment in technology that is advanced, environmentally friendly, and saves raw wood, fuel, and energy. Building large-scale concentrated pre-processing in concentrated planting areas. Building timber trading centres in the 3 regions: North, Central and South.

9) Recommendations on orientations for preferential policies and support for processing W&WP focusing on: i) Policies related to land use levy to ensure equality between domestic wood processing enterprises and FDI enterprises, determine the land rental price suitable to the characteristics of enterprises to produce wooden furniture, create conditions for wood processing enterprises to rent land outside industrial zones where traffic and infrastructure is convenient, adjust the policy of exemption and reduction of land use levy for enterprises, especially small and medium enterprises; ii) Policies on infrastructure, credit and market need to change the way infrastructure service fees are calculated in industrial zones in accordance with wood processing characteristics, reduce lending interest rates when using domestic wood, reduce storage costs storage due to the impact of epidemics or natural disasters, building markets/centers/exchanges for timber wood, closely coordinating with the Timber Association to promote the trade promotion of wood products; iii) Policy on development of production capacity should pay attention to training in industrial working style and manners for local workers to provide human resources for enterprises instead of specific vocational training as at present.

 

PART I: RESEARCH ISSUES

The EU and the UK market have consistently ranked fifth in W&WP export markets by export turnover. In 2017, 2018, and 2019, export turnover to this market still maintained an average increase of about 10%/year, reaching US$ 762,562,950 respectively; US$ 785,266,729 and US$ 864,589,886 with about 88% of total exports to the EU belonging to the group of wood products (HS 94[1]) (To Xuan Phuc et al., 2019). In 2020, export turnover to the EU market was US$ 536.69 million, accounting for 4.5% of total export value, down 5% from 2019 (Viet Nam Wood Magazine, 2020); in 2021, it reached US$ 597.76 million (accounting for 4.2%), up 11.4% from 2020. This decrease is attributed to the Covid-19 pandemic and the UK’s decision to leave the EU. W&WP processing for export to the EU market will increase further in the next years, providing fresh chances to confirm its significant role in the wood industry and serve as one of the sources of demand for Viet Nam’s plantation timber.

In 2020, the whole country had 5,381 enterprises producing, trading, and processing W&WP, of which 1,977 enterprises exported W&WP, of which over 300 enterprises were processing W&WPto the EU market. In recent years, the import W&WP accounted for a low proportion of the import value of W&WP, accounting for about 5%, and the import value of wood increased on average from 1 – 6%/year, lower than the forest product export growth rate, over 13%/year. Eight million m3 were imported in 2018, 9 million m3 in 2019, and roughly 8.5 million m3 in 2020, amounting to between US$ 2.2 billion and US$ 2.53 billion (Prime Minister, 2022). The supply of imported wood was constrained by the Covid-19 pandemic, which raised the price of wood. As a result, transportation and warehousing costs increased by 30% to 35%, and it is anticipated that this trend will continue in the years to come. For W&WP processing to be done in preparation for export to the EU market, the type, quality, and legality of domestically planted timber have not yet met the standards.

On 30 March 2020, the Council of Europe approved the EV FTA[2] Agreement; on June 8th, 2020, the National Assembly of the Socialist Republic of Viet Nam ratified the EVFTA Agreement. In the agreement, there are strict provisions on commitments to implement items related to W&WP exports to EU Union countries. The following are the main points of these provisions, which are presented in several articles in Chapter 13 of the EVFTA Agreement: firstly, sustainable forest resource management and trade in forest products (Article 13.8) by encouraging the promotion of trade in forest products from forests that are sustainably managed and harvested following domestic legislation; ensure the exchange of information on forests; secondly, conserving biodiversity (Article 13.7) by encouraging trade in goods (in the forestry sector, W&WP) benefits the sustainable use and conservation of biodiversity, in line with domestic legislation; thirdly, climate change by reducing greenhouse gas emissions (Article 13.6); in the field of forestry: say no to converting natural forests to planted forests, only planting production forests on bare land and bare hills; increase the carbon stock of planted forests; fourthly, implement the multilateral agreement on labour and employment (Article 13.4) according to the declaration of the International Labour Organization (ILO) not to use child labour in the production of wood and wood products.

On September 1st, 2020, the Government issued Decree No. 102/2020/ND-CP, regulating the legal timber guarantee system in Viet Nam. Regarding domestically planted forest timber for export of W&WP, the Decree stipulated in Articles 8, 9, and 10 on exploitation, transportation, trading, and processing of wood shall comply with regulations on the management of timber products, management, and traceability of forest products. The following six requirements must be met for timber to be considered legal under the current regulations: There is no conflict or disagreement regarding the legal ownership of the forest land; Strictly adhere to laws governing the use and extraction of wood from production forests; Possessing a declaration for any state-owned, contracted, traded, or otherwise protected forests; There is a contract and a list for the sale of timber; There are records of the unit or home’s forests and forest products; and It complies with social, environmental, and tax laws.

Research results on the demand for plantation timber for export processing to meet the requirements of the EVFTA Agreement and the implementation of VPA commitments in Viet Nam to be implemented in 2021 (Study Phase I) stop at the scope of the above overview study throughout the country, several key research issues, specifically on plantation timber for wood processing and furniture export to the EU market, have not been resolved, which are: i) Demand for raw wood for processing W&WP for export to the EU market in the period of 2022-2030; ii) Preferential policies, supporting processing enterprises to gradually reduce imported timber and increase the use of domestically planted forest wood for processing and exporting W&WP to the EU market.

Therefore, it is necessary to research the demand on raw wood for processing wood and wood products exported to the EU market in the context of the implementation of the EVFTA and the VPA commitments in order to strengthen the supply capacity of sustainable domestically planted forest timber for processing W&WP to the EU market, fully meeting the requirements for quantity, quality and legality.

 

 

PART II: RESEARCH OBJECTIVES, SUBJECTS, CONTENTs AND METHODS

1.    Objectives

To solve the above two problems, the research’s goals for 2022 are:

– Analysing the situation of using raw wood and forecasting the demand for raw wood for processing W&WP for export to the EU market in the period of 2022 – 2030.

– Analysing policy implementation and recommending orientations for preferential policies, supporting processing enterprises to gradually reduce the use of imported wood, increase the use of domestically planted forest wood for processing, and exporting W&WP to the EU market.

2.    Subjects

The object of the research is the demand on raw wood for W&WP processing enterprises to export to the EU market.

3.    Contents

Research content focuses on:

– Assess the current situation, forecast the demand for wood for wood processing, and export furniture to the EU market and solutions.

– Reviewing and evaluating the implementation of policies and recommending orientations for preferential policies, supporting processing enterprises to gradually reduce imported raw wood and increase the use of domestically planted forest wood.

4.    Research Methods

4.1.         Collecting, synthesizing, and analysing secondary documents

– A list of 1,900 processing facilities with general data was gathered and initially screened.

– Documents related to domestically planted timber from the annual national forest status announcement from 2001 to 2021 by the Ministry of Agriculture and Rural Development; Final report of the Forest Inventory and Census Project for the period of 2013 – 2016; Viet Nam’s forestry development strategy for the period of 2021 – 2030, with a vision to 2050; Project on Restructuring the forestry sector in the period of 2013 – 2020; Report on the implementation of “Action plan to improve productivity, quality and value of production forests for the period 2014 – 2020”; Summary Report of the Agricultural Extension Project on building a model of converting small timber supply forests to large timber and taking care of large timber intensive plantations; annual summary reports of the General Department of Forestry on the implementation of the Program on Sustainable Forest Protection and Development for the 2016 – 2020 period; other relevant documents.

– Collected information, secondary data on nature, socioeconomics of provinces with W&WP processing facilities for export such as Phu Tho, Ha Noi, Nam Dinh, Quang Nam, Binh Dinh, Binh Duong from documents data published on the web portal of the provinces and the resolutions of the provincial Party Committee, the People’s Council; report of the Provincial People’s Committee on the contents related to forestry and afforestation, forest product processing.

– Collected general information on the implementation of several preferential and supportive policies such as Decree No.57/2018/ND-CP dated April 17th, 2018, on mechanisms and policies to encourage enterprises to invest in agriculture and rural areas; Decree No. 98/2018/ND-CP dated July 5th, 2018, on policies to encourage the development of cooperation and association in the production and consumption of agricultural products; Decree No. 55/2015/ND-CP dated June 9th, 2015, on credit policies for agricultural and rural development; amended and supplemented by Decree No. 116/2018/ND-CP dated September 7th, 2018; Decision No. 38/2016/QD-TTg dated September 14th, 2016, on some policies on protection, development, and investment in supporting infrastructure, assigning public utility tasks to forestry enterprises; ……

4.2.         Research sites

Select 3 regions representing for North, Central, and South. In each region, select some localities (provinces) as research sites, namely:

+ Northern midland and mountainous region (representing the North) with specific characteristics meeting the criteria for processing W&WP for export, including export to the EU market. The cities of Ha Noi, Phu Tho, and Nam Dinh were selected, investigated, and researched.

+ The South-Central region (representing the Central region) with specific characteristics meeting the criteria for W&WP processing for export, including export to the EU market. Quang Nam and Binh Dinh provinces have been selected, investigated, and researched.

+ The Southeast region (representing the South) has a very strong development of processing facilities for export to the EU market. Binh Duong province was selected, investigated, and researched.

4.3.         Method of investigating W&WP processing enterprise

Preliminary data indicates that there are roughly 1,977 W&WP processing facilities across the nation that are available for export. Of these, 300 facilities export to the EU market, with the South accounting for the majority of these exports (about 60%), the Central for 30%, and the North for 10%. The study chose 130 enterprises to receive the questionnaire based on this. A total of 46 enterprises took the survey in response. The KoboToolbox tool is designed to be used to respond to the business questionnaire (Appendix 02: Interview form[3]).

Sixteen processing facilities were involved in the study, of which the North had 5, the Central had 7, and the South had 4. The interviews were conducted using the semi-oriented interview method (SSI). (Appendix 01: SSI Semi-oriented Interview Table)

The table below shows a breakdown by the province of the enterprises that participated in the questionnaire and direct interviews:

Table 1: Distribution of enterprises responding to the questionnaire and direct interviews, by province

Province Number of enterprises surveyed by questionnaire Number of enterprises interviewed by SSI
Binh Duong 19 4
Binh Dinh 10 6
Da Nang 1 0
Dong Nai 4 0
Ha Noi 4 3
Ho Chi Minh city 1 0
Nam Dinh 1 1
Phu Tho 1 2
Quang Nam 2 1
Quang Tri 1 0
Thanh Hoa 1 0
Tuyen Quang 1 0
Total 46 16

 

4.4.         Data collection and processing methods

The interview data was extracted from KoboToolbox software and MS. Excel was used to review, clean and encrypt data. Then IBM SPSS Statistic 22 was used for examining descriptive statistics, creating charts, and examining relationships (if any) … Appendix 03 contains the findings of the analysis.

4.5.         Expert consultations

The research team reported the research proposal and received comments from experts at the proposal appraisal meeting held by SRD. Three technical meetings and one workshop organised by the VIFORA with the input and participation of experts and scientists.

PART III: RESEARCH RESULTS

1.    General situation of processing W&WP for export to the EU market

1.1.         On a national scale

Figure 1 shows the growth in the number of W&WP processing enterprises in the country from 2016 to 2020 (Prime Minister, 2022). Up to now (in 2022), there is no officially announced data on enterprises producing, trading, and processing wood and forest products. Among the enterprises mentioned above, there are no official statistics on the number of processing enterprises exporting to the EU market. Preliminary results of the research team estimated that about 300 processing enterprises are exporting to the EU market. However, the number of enterprises is always fluctuating due to their dependence on monthly and quarterly orders.

 Source: Statistics of the General Statistics Office

Figure 1: Chart of changes in the number of W&WP processing enterprises in the period 2016-2020

Viet Nam exports W&WP to 160 countries and territories. The main export markets are still the United States, China, Japan, Korea, and the EU. The EU is one of Viet Nam’s important markets, but the turnover is modest at present. In 2017, the turnover from this market (EU_28) accounted for 9.6% of the total export turnover of the industry. In 2017, the growth in turnover compared to 2016 reached 2.6%. In 2019, Viet Nam’s export turnover of wood products to this bloc reached US$ 864.6 million, up 10% compared to 2018. Export value to the EU_27 (excluding the UK) in 2020 reached US$ 536.69 million, down 5% from the previous year, accounting for 4.5% of the total export value[4].

The whole country has about 88% of the total export turnover to the EU in the group of wood products (HS94). The rest are items in the group of wood. (HS44) (Viet Nam Wood Magazine, 2019)……………. ……………………………………………….
Items in the group of other furniture, chairs, and bedroom furniture are the main groups of products exported by Viet Nam to the EU. These commodity groups account for a large number of products and grew steadily from 2016 to 2021, which shows that the tastes and demand for products in the EU market are relatively stable with little fluctuation.

1.2.         Facts from investigated enterprises

1.2.1.    The proportion of enterprises’ exports to the EU market

Figure 2 demonstrates that 58% of the enterprises are W&WP exporters, with over 51% of their total output going to the EU market. This amount, which satisfies the assessment requirements for raw wood, is a sizable percentage. the use of timber in the manufacture of goods for the EU market. Enterprises export to the EU at a rate of 21% from those between 31 and 50 percent and 13% from those between 11 and 31 percent. Only a very small portion (8%) of the enterprises in the survey have a percentage of products exported to the EU that is less than 10%.

Figure 2: The proportion of enterprises exporting W&WP to the EU market

The results of direct research at enterprises also give similar results. Most enterprises have a proportion of W&WP exports to the EU market of 30% or more, and some enterprises even export 100% to the EU market. All this without other markets. Several enterprises that previously had a large proportion of exports to the EU market had a reduction of this proportion to less than 50% and converted to other markets. The reasons are said to be the complexity of the documents of goods exported to the EU, the high requirements for the wood’s origin, and the difficulty in meeting the requirements for the type of imported wood used for products in the import situation. The import of wood products is difficult at present. This transformation mainly takes place in enterprises with large production scales and rich customer partners, especially in the US market. These enterprises can receive large orders from the US market and are willing to cancel orders from EU customers, keeping only traditional and long-standing partners.

1.2.2.    Products and value of exports to the EU market

Enterprises mainly focus on five product categories, including indoor furniture, outdoor furniture, artificial boards, sawn timber and construction wood, and other products (chips, pellets, and pellets floor). The survey results show that most enterprises focus on specialized production of indoor furniture, outdoor furniture, or a combination of both types of indoor furniture and outdoor furniture. In addition, there are several enterprises producing a combination of these products, between indoor furniture and artificial boards (laminated boards, plywood), or between indoor furniture and artificial boards. The survey results are shown in Figure 3. Over 80% of the 46 enterprises that were surveyed make indoor furniture and outdoor furniture, with indoor furniture production accounting for the majority (53%), outdoor furniture (30%), 8% are enterprises making artificial boards, 3% are enterprises making sawn timber, and 6% are enterprises making other goods (chips, pellets, chips, etc.).

Figure 3: Product type structure of surveyed enterprises

+ Indoor furniture 

Through a direct survey of 16 enterprises, the furniture products exported to the EU market are very rich in designs and designs. Products include living room furniture, bedroom furniture, kitchen furniture, bathroom furniture, … These products are all made from natural wood or natural wood combined with artificial boards. The type of wood used can be imported or domestic depending on the order. Furniture is a significant export to the EU market, and there are stringent requirements for wood traceability (100% FSC certification is required) and certificates of chemical and product safety. Furniture products must be safe and environmentally friendly. The structure of the export value of furniture products of the surveyed wood processing enterprises varies from year to year, as shown in Table 2.

Table 2: Three-year change in the export value of indoor furniture products

No Export value Fluctuations in proportion (%)
2019 2020 2021
1 < US$ 1 million 42 29 21
2 US$ 1 million – US$ 5 million 25 33 50
3 US$ 6 million – US$ 10 million 8 13 12
4 US$ 11 million – US$ 50 million 25 25 17

 

The majority of furniture exporters to the EU market concentrate on the export value range of US$ 1 million to US$ 5 million (which accounts for more than 60% of all exports). This represents the proportion of small and medium-sized enterprises that predominate. Between 2019 and 2021, there was a significant change in the export value of furniture products from the surveyed enterprises to the EU market. From 25% in 2019 to 33% in 2020, and then sharply increasing in 2021 to reach 50% of surveyed enterprises, the number of enterprises exporting furniture products worth between US$ 1 million and US$ 5 million annually exhibits signs of growth.

+ Outdoor furniture

The majority of the outdoor goods that enterprises directly surveyed export to the EU market include wood-only furniture, wooden tables and chairs covered in fabric, sun loungers, swing chairs, etc. The product has a wide range of options for finishing, including coating and anti-mold oil wipes. These finishing wood need to be safe and eco-friendly enough to fulfil export requirements for the EU market. The fluctuations in export value of outdoor products of the surveyed enterprises are shown in Table 3.

Table 3: Changes in export value of outdoor products in 3 years of processing enterprises

No Export value Fluctuations in proportion (%)
2019 2020 2021
1 < US$ 1 million 6 6 6
2 US$ 1 million – US$ 5 million 59 47 47
3 US$ 6 million – US$ 10 million 6 18 23
4 US$ 11 million – US$ 50 million 29 23 24
5 Over US$ 50 million 0 6 0

It is clear that the export value of outdoor furniture from the surveyed enterprises to the EU market is primarily concentrated at US$ 1 million to US$ 50 million annually, or about 50%. Enterprises with an export value of US$ 11 million to US$ 50 million annually, or about 25% of their total revenue, came in second, and enterprises with an export value of US$ 6 million to US$ 10 million annually came in third. This is consistent with the analysis of enterprise size and the proportion of small and medium-sized enterprises that dominate the total number of enterprises surveyed.

+ Products of artificial boards

There are mainly 2 types of artificial boards exported to the EU market by direct survey enterprises: plywood and laminated boards. This type of product accounts for a smaller proportion of enterprises and exports to the EU than indoor and outdoor products. The total number of enterprises producing artificial boards accounts for only 8% of the total 46 enterprises surveyed. The structure of the export value of these enterprises is shown in Table 4.

Table 4: Changes in export value of artificial boards in 3 years of enterprises

No Export value Fluctuations in proportion (%)
2019 2020 2021
1 < US$ 1 million 0 50 34
2 US$ 1 million – US$ 5 million 50 25 33
3 US$ 6 million – US$ 10 million 50 25 0
4 US$ 11 million – US$ 50 million 0 0 33

As can be seen, over 50% of the surveyed enterprises’ exports of artificial boards are concentrated in the subsegment of less than US$ 5 million annually. There is an increase from the export values of US$ 1 million – US$ 5 million/year and US$ 11 million – US$ 50 million/year in 2020 and 2021 in terms of the proportion of enterprises with an export value of artificial boards to the EU market. The survey results from 16 enterprises showed that only 2/16 enterprises have exported artificial boards, mainly plywood and laminated boards. This is not the main export product of the enterprise. Among the 16 surveyed enterprises, most of them have production lines for laminated boards and plywood boards but mainly serve the needs of enterprises without investing in professional production for export.

+ Lumber products

None of the 46 enterprises that were surveyed exported lumber to the EU market in the three years between 2019 and 2021.

 

 

+ Other products (chips, tablets, …)

Among the surveyed enterprises, enterprises producing other products such as wood chips, tablets, floorboards, etc. accounted for a small proportion. The scale of these enterprises was mainly divided into 3 types: 50% are small-scale production enterprises of less than 5,000 m3/year, the remaining 25% are medium-sized enterprises, and 25% are large-scale manufacturers (Figure 4). Other products (wood chips, pellets, …) of the surveyed enterprises are mainly concentrated in the segment of US$ 1 million – US$ 5 million/year. This rate does not change from the years 2019 to 2021 (Figure 5).

Figure 4: The size of enterprises producing other products

Figure 5: The value structure of other products exported to the EU market (wood chips, pellets, etc.)

1.3.         Conclusions

– The value of W&WP exports to the EU market is low annually, accounting for about 8% on average, always in fifth place, when compared to the major markets such as the US, China, Japan, and Korea. The key point is that the UK and the EU’s 27 member states import only a small amount of products each year.

– The number of W&WP processing enterprises exporting to the EU market is small, accounting for a low proportion of the total number of W&WP processing enterprises for export. But in those enterprises, the products and value exported to the EU market of these enterprises account for a high proportion of the total products and export production value of the enterprises.

– The 7 groups of W&WP imported from Viet Nam to the EU are quite diverse, but indoor and outdoor products account for a large proportion. These products require specific wood in terms of type (some are required to be imported from Europe), high quality, and legality. This is a problem that affects wood substitutes from domestic.

– In addition to meeting the general requirements of the EVFTA and VPA/FLEGT agreements, each EU member state has its own requirements for product quality and legal wood traceability. This is one of the most difficult problems in terms of product categories and standards.

– The EU is a very sensitive market and has been affected by objective factors in recent years, especially epidemics, regional conflicts, terrorism…

2.    Raw wood for processing W&WP for export to the EU market

2.1.         Imported wood

2.1.1.    General situation

The value and volume of raw wood imports have not changed significantly over the past few years. They imported 7 million m3 in 2016; 8 million m3 in 2017; 9 million m3 in 2019; 8.5 million m3 or so in 2020, and 8.6 million m3 or so in 2021. However, there has been a significant change in the percentage of imported wood used in production and processing. Before 2010, about 70% of the total demand for wood in processing production was always met by the amount of imported wood used in product processing. The amount of imported wood used for processing will only make up about 25% of the total demand for raw wood in production by 2020, down from the current percentage of about 40% in 2013. Logs, lumber, and artificial boards are the most common types of imported wood, which are used as raw wood to create products (Prime Minister, 2022)[5].

 

According to the findings of a survey of 46 enterprises, 87% of those enterprises import raw wood for the production of W&WP exports, while only 13% of enterprises do not use imported wood for export item production. This finding indicates that the majority of W&WP processing enterprises that export their products must source their raw wood from abroad (Figure 6).

Figure 6: Percentage of W&WP processing enterprises using imported raw wood

A direct survey of 16 enterprises also showed similar results, 16 out of 16 enterprises imported raw wood for W&WP production for export in general and exported to the EU market in particular. These imported raw wood are mainly required by customers, it is mandatory to use imported raw wood for their products. This is the general peculiarity of the EU market.

  • Imported logs and lumber
a) Imported logs and lumber

       Table 5 shows that the amount of imported lumber for production by the surveyed enterprises has little changed in the 3 years of 2019, 2020 and 2021. Most enterprises have an average import volume of logs and lumber in the range of less than 5,000 m3/year (the average of the last 3 years is over 80%). There are only a few enterprises with an average import volume of raw lumber and logs over 5,000 m3/year (accounting for 17% and no change in 3 years). This is a relatively small amount of imported material compared to the production and export scale of the enterprise.

Table 5: Changes in the rate of imported wood in 3 years of processing enterprises

No Average import volume/year (m3/year) Fluctuations in proportion (%)
2019 2020 2021
1 Under 1,000 46 43 43
2 1,000 – 5,000 37 40 40
3 Over 5,000 17 17 17

The survey results show that the average amount of imported lumber and logs by year ranges from 17,000 m3 (minimum value) to over 33,000 m3 (maximum value). Considering the change in the average rate of imported logs and lumber by year according to the maximum value, the amount of imported sawn logs tends to decrease from 2019 – 2021. This result is consistent with the actual survey results at 16 enterprises. If 3 years ago, before the COVID pandemic, imported wood had a little fluctuation in price and supply, it was relatively easy for wood processing enterprises to import. The tastes of EU people in general and of other markets in particular have not changed. Export products use a lot of imported wood, and the domestic wood supply has not met the demand. However, since the COVID pandemic, which directly impacted people worldwide, the increase in inflation, and the political unrest in Russia and Ukraine have significantly impacted the source of raw wood imported into Viet Nam, enterprises that previously heavily relied on this source of imported raw wood have gradually switched to using domestic raw wood. Consequently, the trend for imported wood declined.

b) Amount of imported logs and lumber used for W&WP production exported to the EU market

Figure 7 shows that the rate of using imported wood to produce W&WP for export to the EU market is very low, with 34% of surveyed enterprises using this amount of raw wood to produce less than 10 % of the total amount of imported wood. 24% of enterprises surveyed used 26 – 50% and 24% of enterprises used 51 – 75%. Only 9% of enterprises use imported wood to produce EU export products, accounting for more than 75% of the total amount of imported wood.

The results of the direct survey of 16 enterprises showed similar results, with 6/16 surveyed enterprises having a rate of using imported raw wood for the production of EU export products below 10% (3/6 enterprises). This industry has a rate of using imported raw wood of less than 5%). The rest uses 10 – 20% of imported raw wood. The average amount of imported wood every year is also very small. All of these wood are used to fulfil orders from partners who directly specify the type of wood used.

 

Figure 7: The percentage of use of imported raw wood to produce products exported to the EU market

c) The main type of imported wood

The most common imported wood for export production is white oak, which accounts for 23% of all imports. Pine is the wood with the second-highest import rate (18%), followed by eucalyptus with a third-highest import volume (16%), teak with 11%, and red oak with 8%. These five types of wood are frequently used to make goods for export. Other types of wood, like poplar, beech, walnut, etc., are imported, but only a very small portion – less than 4% – is used for export production (Figure 8).

Survey results directly from enterprises show that white oak, pine, and eucalyptus are often imported by enterprises to produce high-class furniture for export. These are wood products of good quality, grain, and colour that are easy to process and process into products with high aesthetics, so they are favoured by customers and designated for their orders. This is also the type of wood that enterprises consider irreplaceable due to customer demand, and there is no domestic substitute material (Figure 9).

Figure 8: Imported raw wood

Figure 9: The type of wood that is required to be imported because there is no substitute material

Most of the wood mentioned above are imported from nations like the United States, New Zealand, South Africa, Uruguay, and Brazil.

d) Assessment of the advantages of imported wood

The research team used 3 sets of criteria to assess the advantages of imported wood, including advantages in quality, advantages in market procedures, and meeting the requirements of the EU market for W&WP exports. The evaluation results are shown in Table 6 and Figure 10.

Table 6: Criteria for assessing the quality of imported wood

Criteria for evaluation Proportion %
The quality advantages
High-quality wood 52
Similar colours 33
Wood specifications ensure demand 58
Consistent wood quality 58
The advantages in terms of procedures and markets
Clear procedure 21
Competitive price 36
Fair competition, transparency 30
Less negative 24
Easy and clear wood traceability 64
Easy to check and monitor 42
Meet the requirements of the EU market for exporting W&WP
They have all the required certificates (FSC, PEFC, …) 82
Do not use illegal wood 58

It can be seen that the criterion is rated the highest, accounting for 82% of enterprises agreeing that the advantage of imported wood is having all the required certificates (FSC, PEFC, …) for products exported to the EU market. This is a mandatory condition for the production of goods for export to this market. The results of direct surveys at enterprises show that, when goods are exported to the EU market in particular and other markets in general, the customer partners will periodically hire a third party to independently evaluate the product. on criteria such as quality, texture, chemical safety criteria, and records to ensure the wood’s origin. This is a very strict process, which enterprises must comply with to avoid inconveniences and economic losses. When one of the inspection criteria is not met, the goods will be returned. Therefore, now enterprises are willing to pay high prices for raw wood to ensure legality and have all the required certificates. The criteria of favourable market conditions and quality of wood are highly appreciated by enterprises for imported wood.

In addition to the above advantages of imported raw wood, this type of raw material currently has many difficulties, such as high prices, precarious markets, unstable supply, very difficult transportation to Viet Nam, long transportation time, and high costs. Therefore, some enterprises with a high rate of using imported wood are really struggling during this time. Some enterprises are gradually converting to using domestic raw wood instead.

Figure 10: Evaluation of the advantages of imported raw wood

2.1.3.    Imported board
a) Quantity of imported boards

Figure 11: Board import rate by years

Figure 11 shows that the import rate of boards at the surveyed enterprises has little changed. Most enterprises have a very small import of boards, just under 1,000 m3/year (accounting for over 80%). In 2020 and 2021, the import volume of boards at 1,000 – 5,000 m3/year will increase, but it will not exceed 11%.

 

Figure 12: Total volume of imported boards by year

Figure 12 shows that the total annual average volume of imported boards at the surveyed enterprises ranges from 8,000 m3 to 18,000 m3. This average volume of imported boards tends to increase from 2019 – 2021 (Figure 13).

 

                     

Figure 13: Trend of imported board wood by maximum value (max)

b) The main imported boards

Among imported boards, MDF is currently the type of board with the highest rate of imports into Viet Nam, with 42% of surveyed enterprises importing this type of board to produce products for export to the EU market. The remaining types of boards with a lower import rate include plywood (16%), chipboard (16%), plank wood (12%), and other boards (14%) (Figure 14).

According to the results of direct surveys of enterprises, the proportion of MDF boards used by the majority of enterprises, imported from Malaysia, is used to make products that require large sizes and high quality, such as dining countertops, kitchen countertops, kitchen cabinets, etc. When used, these types of boards will be covered with decorative boards such as veneer, face-covering boards, and glued paper. Consequently, this type of board has a higher import rate than other types of boards.

Plywood is also a type of board that is used a lot to produce wood products for export to the EU market, but the import volume of this type of board is low because most enterprises (direct survey) have a production line. The enterprise’s products need this type of board to meet their needs. One advantage of this type of board is that it mainly uses domestic acacia wood, has simple production technology, can make the most of raw wood, and can produce boards with specifications following the requirements of the product. This is why the amount of plywood imported by enterprises only accounts for a very small percentage of the total.

Figure 14: The main imported boards

c) Quality assessment of imported boards

Imported boards have higher quality than domestically produced ones and fully comply with EU market requirements, which is highly valued by 34% and 30% of the surveyed enterprises, respectively. These are the two main determinants of whether W&NTFP exporters are welcomed on the EU market. Additionally, imported board products come in a wide variety of types with a full range of product specifications, which enterprises can choose from to meet order requirements. 19% of the surveyed enterprises value this criterion. Board importers are also interested in the remaining criteria, which include straightforward processes, affordable prices, and assurance of safety standards in accordance with REACH regulations. (Figure 15).

This result is completely consistent with the results of a direct survey of 16 enterprises. With enterprises that import boards to produce products for export to the EU market, the first thing enterprises care about is the quality of boards. Imported boards are much better than domestic boards and have a more competitive price, sometimes even cheaper than domestically produced boards. Imported boards, especially MDF boards imported from Malaysia, fully meet the strict standards of the EU market, such as the E0 standard (E0 is the friendliest level for the health of users. Formaldehyde is almost zero).

 

Figure 15: Quality assessment of imported boards

2.1.4.    Some conclusions regarding imported  wood.

– The amount of imported wood used to produce products for export to the EU market accounts for about 37% of the total amount of raw wood used by enterprises to produce export goods.

– The amount of imported raw wood is not much, mainly logs, lumber, and board (MDF), but it is mandatory to import because many items, especially outdoor WP, require very high quality or demand for imported wood, according to the orders of some EU countries. This is quite different from other markets, so it makes it difficult to use domestic wood products instead.

– Different from the general trend of the whole country, the trend of importing wood for W&WP processing for export to the EU market will still increase in the coming years because the quality of imported raw wood is much higher than domestic wood quality, which requires 100% international certified wood as well as implementing agreements signed with the EU (EVFTA, FLEGT).

– The COVID pandemic’s effects, rising inflation in the US and Europe, rising gas prices globally, and the impact of the Russia – Ukrainian conflict have all had a significant impact on consumer demand for goods and tastes. Freight rates significantly increased, purchasing power dropped, and there were lots of inventories, which led to partner enterprises cancelling or delaying orders, making it difficult for domestic enterprises to produce and export goods. EU consumers have also undergone significant changes in the direction of switching to products made with less expensive raw wood, so they accept domestic substitute wood to lower product costs. These are the elements that make it easier to use domestic raw wood.

2.2.         Domestic wood

2.2.1.    The overall situation

A stable and legal source of plantation forest wood for the wood processing industry has been established as a result of the implementation of the Forest Sector Restructuring Program and the Sustainable Forestry Development Programs in recent years, in addition to good management and protection of existing forest areas, increasing forest coverage to 42.01% by 2020. Domestic timber production increased steadily from 2017 to 2021, averaging more than 10% annually[6] (Figure 16).

The supply of wood from domestic plantations has met most of the demand for wood processing wood. In 2020, the total demand for wood serving our country’s wood processing industry was about 38.5 million m3 of round logs, of which the domestic source of wood was estimated at 30 million m3, accounting for 75%; from planted forests, it reached 20.5 million m3; from scattered trees and rubber wood, 9.5 million m3. In 2021, it will reach 40.6 million m3, of which domestic exploitation will reach 32 million m3 (concentrated plantation forest will reach 21.5 million m3, from scattered trees and rubber 10.5 million m3). 100% domestic raw wood for the processing industry, with legal forest product records, ensuring the traceability of legal timber following the law.

 

Figure 16: Domestic raw wood for the period 2017-2021

Source: Prime Minister, 2022

The survey results of 46 enterprises show that the proportion of enterprises using domestic raw wood is very large, accounting for 90% of the surveyed enterprises. Only 10% of enterprises do not use domestic wood for the production of W&WP for export (Figure 17). This result completely coincides with the results of the direct survey of 16 enterprises using domestic wood (acacia wood, rubber wood, and pine) for production. Today, acacia wood is the most commonly used and largest in wood processing enterprises. This shows that domestic raw wood are gradually meeting the needs of wood processing in general and export wood processing in particular.

 

Figure 17:The percentage of enterprises using domestic wood

2.2.2.    Domestic logs and lumber

a) The amount of domestic lumber and logs

Changes in the rate of domestic use of wood in the three years of 2019, 2020, and 2021 of the interviewed enterprises are shown in Table 7.

Table 7: Changes in the rate of domestic use of raw wood in 3 years by processing enterprises

No The average volume of domestic wood use/year (m3/year) Fluctuations in proportion (%)
2019 2020 2021
1 Under 1,000 46 41 40
2 1,000 – 5,000 27 34 33
3 Over 5,000 27 25 27

 

The average annual use of lumber and logs in the country ranges from 20,000 m3 to 40,000 m3. The amount of this material tends to increase from 2019 to 2021 (Figure 18).

The results of a direct survey of 16 enterprises also show that, at present, enterprises mainly use logs and lumber purchased domestically for export production. For small and medium-sized wood processing enterprises, the annual average use of lumber is about 25,000 – 30,000 m3 of raw wood. For large-scale production enterprises, the number of raw wood can exceed 30,000 m3 of timber per year.

Raw wood for logs and lumber nowadays are mainly bought from enterprises specializing in sawing and drying timber. These enterprises purchase timber from afforestation households, forestry enterprises, or other enterprises. Traders gather wood, then sort raw wood for sawing and drying according to different specifications depending on tree age and tree diameter. The price will be different for each type of material with a different diameter and age.

Currently, due to the influence of many volatile factors such as the COVID epidemic, high inflation in the US and EU, and the war between Russia and Ukraine, export products are tending to shift the source of raw wood and types of raw wood. A direct survey of 16 enterprises all said that customers are now tending to replace some expensive wood before using acacia wood, so the demand for this wood tends to increase. Increasing the demand for domestic raw wood. This result is consistent with the survey results on domestic demand for wood in Figure 19 on the trend of increasing use of domestic wood in the three years 2019 – 2021.

 

 

Figure 18: The average amount of domestic lumber and logs used by years

 

            

Figure 19: Domestic demand for wood in 3 years (2019-2021)

b) Type of wood

Structure of wood used: Acacia wood is the most used wood in surveyed enterprises, accounting for 37%, followed by Melaleuca wood with 21%, and rubber wood is the wood that accounts for the proportion. The third most used wood accounts for 16%, and the remaining types of wood, such as pine, eucalyptus, teak, and some other woods, are less used to produce products for export to the EU market. (Figure 20)

 

Figure 20: Domestic raw material structure used to produce W&WP for export to the EU market

It can be seen that acacia wood is a domestic wood that plays a key role in W&WP processing enterprises exporting to the EU market. 70% of surveyed enterprises used this type of wood, accounting for the highest percentage of domestic wood species surveyed. (Figure 21).

According to the results of direct surveys at enterprises, acacia wood is used by the majority (over 90% of enterprises directly surveyed) to produce outdoor and indoor items and produce plywood for export to the EU or American markets. This is the most popular type of wood, and enterprises are most in demand at the moment.

Melaleuca wood, which was selected by 39% of the surveyed enterprises, came in second. According to the findings of direct surveys conducted at enterprises, Melaleuca wood is the most frequently used wood in Southern enterprises (starting in Binh Duong) as its wood has good quality and good size, guarantee (large wood diameter) for the creation of products for the indoor and outdoor that need large wood size and consistent wood quality. Even though Melaleuca wood costs more than Acacia wood, it is still preferred by Southern enterprises.

Rubber wood and pine are the two types of wood used by 30% and 24% of the surveyed enterprises, respectively. A direct survey shows that these two types of wood can meet the requirements of a small number of customers wishing to use products made from this type of wood, mainly as decorative art products, furniture used in the house, children’s toys,…

The remaining few, such as eucalyptus, teak, and some other types of wood, are also used by a small number of enterprises (percentage of less than 10%) for the production of goods for export to the EU market, in addition to acacia, melaleuca, pine, and rubber wood, which are chosen by many enterprises.

 

Figure 21:  The proportion of using domestic wood for W&WP production and export to the EU market

 

Figure 22: Assessment of domestic wood that can replace imported wood

Acacia wood is the number one dominant material in export wood processing enterprises. 67% of interviewed enterprises believe that this type of wood can completely replace imported wood (Figure 22). In the next few years, this wood will be the trend in the wood processing industry. Acacia wood can be used for the production of indoor and outdoor goods for export, production of chips, veneers, plywood, tablets, etc. With large reserves, the area of acacia plantations is covered with acacia wood. This will be a potential and future material that can replace imported wood. However, surveyed enterprises believe that in the future, if there is no good management plan for this raw material source, there will be many shortcomings, such as the quality of wood decreasing due to degraded varieties and planted forests. The forest is mainly dispersed among the people (over 70% of the afforestation area belongs to the people), so there is no synchronous planting, tending, management, and exploitation solutions. Timber is harvested at an immature age (mostly exploited at the age of 4 – 6 and sold as raw wood for mincing, making tablets, and veneers), so the quality and diameter of raw wood are not guaranteed for export production. The value of raw wood is not high, which is why people are no longer interested in planting large timber forests.

c) Raw material area

Figure 23: The domestic wood area where enterprises purchase raw wood

The regions supplying domestic wood for the production and processing of W&WP for export are divided into three regions: North, Central, and South. The survey results show that the central region is the largest supplier of raw wood for wood processing enterprises in the country, with 46% of enterprises using wood in this region. The South is the second largest source of raw wood for enterprises, with 29% of enterprises using wood in this region, while the North accounts for less than 25% of enterprises (Figure 23).

This result is consistent with the results of the direct survey of enterprises. Most of the raw material supply in the North (mainly concentrated in some provinces such as Tuyen Quang, Thai Nguyen, and Yen Bai) is currently only enough to supply export wood processing enterprises in the North. The distribution rate of these enterprises in the north is less than in the central and southern regions, so the proportion of enterprises that have access to raw wood in the north is small.

         The Central and Southern regions are home to many of the largest wood processing enterprises in the country. The raw wood area in the central region supplies many enterprises in the central and southern regions due to the wide variety of wood and large quantities meeting the production needs of enterprises, which is convenient in transporting raw wood to factories. The quality of raw wood in the Central region is also evaluated equally. The wood has a large diameter, ensuring the specifications for the production of indoor and outdoor items for export, so the central region is a potential source of raw wood, the largest in the country.

The South mainly supplies melaleuca wood and rubber wood for wood processing enterprises here.

d) Evaluation of the benefits of domestic wood

Figure 24: Assessing the advantages of domestic wood

Availability and compliance with the export production requirements of enterprises are the first two criteria that enterprises pay attention to when choosing domestic raw wood for the production of export products. 22% of enterprises rated domestic raw wood as meeting the requirements; 26% assessed those domestic raw wood were available; 19% of enterprises said that domestic raw wood were cheaper than imported wood; and 17% of enterprises assessed that the domestic source of raw wood was stable (Figure 24).

This assessment result is completely consistent with the direct survey results at 16 enterprises. Raw wood are a vital issue for wood processing production in general. For the production of export products, the availability, stability, and suitability of enterprises production needs is a key factor. It plays an important role in determining the ability of enterprises to meet export orders and production capacity. 16/16 enterprises directly surveyed all said that the domestic source of wood, especially acacia wood, currently meets the production needs of wood processing enterprises, and the wood source is relatively abundant, available, and cheaper than acacia wood of the same type imported, so acacia wood is currently the trend in wood processing in Viet Nam.

e) The disadvantages of domestic wood

Figure 25: Assessing the disadvantages of domestic wood

In addition to the advantages of domestic raw wood, such as availability, abundant and stable sources, in meeting the production needs of export orders, domestic raw wood also have disadvantages, making the source of raw wood difficult. This enterprise has not fully exploited its strengths in production (Figure 25).

One of the disadvantages most evaluated by enterprises (23%) is that the amount of raw wood with all the required certificates (FSC, PEFC, …) is only available in some regions/types of raw wood. This hinders the provision of sufficient assurance documents at the request of customers, failing to meet the requirements for raw wood for the production of goods for export to the EU market. This result is also consistent with the results of a direct survey of 16 enterprises. 15/16 directly surveyed enterprises using domestic raw wood all said that the domestic source of wood (especially acacia wood) is actually capable of meeting the production needs of wood products. indoor and outdoor products are exported, but the biggest barrier to restricting the use of this material is that the FSC certificate is only available in some raw material areas, which is a mandatory requirement for production wood exports to the EU. Enterprises are willing to pay higher prices to buy raw wood with full certificates, ensuring full legal documents to provide partners.

The second disadvantage of domestic raw wood, obtained from direct survey results at 16 enterprises, shows that the rate of taking advantage of domestic raw wood is still not high for acacia wood with a diameter of 16 – 17cm or more. If from round wood to lumber, the rate of wood use is approximately 56 – 57%, but the rate of wood use from sawn wood to refined products is only approximately 27 – 31%. This limitation may be due to many reasons, such as the low technology of wood products processing enterprises; technical skills of workers are still limited; technical staff have not found a solution to use/make the most of raw wood, such as using raw wood of different specifications and quality into suitable products; It may also be because the enterprise’s product range is not large enough and rich enough to have the opportunity to make the most of raw wood; because the material has many defects, such as curved body, many eyes, easy to crack, …

The third limitation of domestic raw wood at present is that a wide variety of raw wood meeting the production needs of export products is not yet abundant. Currently, apart from acacia having a large afforestation area, which can provide a sufficient amount of raw material for production, it has not met the demand for the age of exploitation and the diameter of the wood. Acacia wood is mainly exploited at the age of 5 – 6 years, serving well for the production of wood chips, veneers, and wood pellets. Meanwhile, the age of exploitation for the production of indoor and outdoor products is from 8 to 9 years old or more and the average diameter of the log is 16 – 17cm or more, so it has not met the demand for these products for export. Therefore, the value of domestic acacia wood is not high. Concerning other trees such as pine, rubber wood, teak, and eucalyptus wood, they are currently still at the level of making use of this raw material, but there is no official plantation for wood processing.

2.2.3.    Domestic board wood

Looking at the figure 26, it is evident that the proportion of domestic boards used for export products of the surveyed enterprises is mainly below 1,000 m3/year (accounting for over 70% of surveyed enterprises), and this rate has not changed too much in the last three years.

 

Figure 26:.Rate of domestic use of board wood by years

The average annual volume of domestic boards used to make export products is in the range of 7,000 – 10,000 m3 (Figure 27), which is insignificant when compared to the average annual volume of sawn timber logs used for various industries. This result is consistent with the direct survey at enterprises, export orders to the EU market usually employ very different types of artificial boards, owing to the preference of people in EU countries for natural and safe products. Artificial boards are mainly applied in indoor product structures such as tabletops, shelves, and cabinets, but this amount is small. Another reason, as analysed in the imported board section, the details that require large sizes of the products are mostly used with bar-joint boards, and with this type of board, most wood processing enterprises have production lines to produce and serve their own needs, so the amount of domestic boards that enterprises buy to use to produce export products is very small.

Figure 27: The amount of domestic board material used over the years

2.2.4.    Main findings about raw wood in the country

– The amount of domestic raw wood used to produce W&WP for export to the EU market has had a tendency to increase over the years, at 63% of total wood volume. It is quite a positive picture of the use of domestic wood.

– Acacia wood, rubber wood, pine wood, and Melaleuca wood are four types of wood that enterprises value for their quality, quantity, and stability in meeting the demand for raw wood for producing export products in general and exporting to the EU market in particular. Especially acacia wood can completely replace imported wood. Melaleuca, pine, and rubber wood can also be substituted for imported wood if it is sufficient in quantity and has appropriate processing technology. This is also a positive signal for some domestic wood species for export processing.

– The price of imported wood has risen alongside the difficult economy, and EU consumers are also shifting products made of cheaper wood, so they accept domestic substitute wood to reduce costs and product prices. These are the factors that make the use of domestic wood more convenient.

– In the last 5 years, the quality of domestic wood has tended to decline such as wood with knots, young wood, small specification, uneven size, wood collected from fragmented forest plantation exploitation and lack of care; wood used for processing is often selected from large trees (about 20 – 25%) from small plantations for woodchip production. This is the limitation of the raw wood used in the processing of W&NTFP for export in general, and specifically for the EU market.

– Due to the lack of planning and investment in the canal from exploitation, preliminary processing, and drying of raw wood, the quality of this raw material is not guaranteed, and the potential of this wood has not been fully utilized.

– Due to the massive development of export woodchip processing enterprises, the increase in production of wood pellets, and no solution to manage raw wood, there is now a huge competition for acacia wood for production, which leads to the situation that many enterprises have difficulty in purchasing raw wood.

3.    The raw wood demand forecast for processing W&WP for export in the period 2022 – 2030.

3.1.         Quantity demand

In recent years, our country’s wood processing industry has made significant contributions to the country’s economic development, being an export industry with a high growth rate averaging over 15% per year. The total value of W&WP export turnover in 2017 reached over US$ 7.7 billion, finishing 3 years ahead of the target of the Viet Nam Forestry Development Strategy, period 2006 – 2020. The export turnover of the wood processing industry reached US$ 12.3 billion, up 16.1% compared to 2019, accounting for 30% of the export value of the agriculture and rural development industry. The export value of the industry continues to increase, striving to reach over US$ 18 billion by 2025 (Table 8, Figure 28) (Prime Minister, 2022).

The raw material demand forecast for W&WP production in the years in column 6 and Table 10 is based on this correlation equation.

 

 

 

Table 8: W&WP export value from 2017 to 2021 and projected export value growth from 2022 to 2030

Year Wood export value (million US$) WP import value

(million US$)

Total export value

(million US$)

2017 1.951 5.708 7.659
2018 2.606 6.303 8.909
2019 2.892 7.783 10.675
2020 9.262 3.008 12.270
2021 10.744 3.098 13.842
2022 12.033 3.16 15.193
2023 13.237 3.207 16.444
2024 14.428 3.239 17.667
2025 15.366 3.255 18.621
2026 16.31 3.27 19.580
2027 17.26 3.29 20.550
2028 18.21 3.3 21.510
2029 19.16 3.32 22.480
2030 20.11 3.33 23.440

Source: Prime Minister, 2022

Source: Prime Minister, 2022

Figure 28: W&WP export value from 2017 to 2021 and projected export value growth from 2022 to 2030

Regarding the supply of wood: According to statistics in the Project on the Development of a Sustainable and Effective Wood Processing Industry in the Period 2021 – 2030, the total demand for wood in the country is over 35 million m3 in the period 2017 – 2020. This material source comes from 2 sources, which are imported and domestic wood.

Table 9 shows that the ratio between domestic and imported wood in the period 2017 – 2020 is on average 77.44% of domestic wood and 22.56% of imported wood. This ratio is less volatile during this period, showing that the amount of domestic raw wood is meeting the demand for wood processing and for export wood processing in general.

Table 9: The supply of wood from 2017 to 2021

Year Imported wood Domestic wood Total wood volume (million m3)
Quantity

(million m3)

Proportion, % Quantity

(million m3)

Proportion, %
In 2016 7.30 23.10 24.30 76.90 31.60
In 2017 7.60 22.29 26.50 77.71 34.10
In 2018 8.40 23.40 27.50 76.60 35.90
In 2019 8.50 23.29 28.00 76.71 36.50
In 2020 8.50 22.08 30.00 77.92 38.50
In 2021 8.60 21.18 32.00 78.82 40.60
Average 22.56 77.44

Source: Prime Minister, 2022

– The raw wood demand forecast for processing W&WP for export

To forecast the demand for raw wood for export W&WP processing in the period 2022 – 2030, the research team conducted a correlation analysis between the amount of raw wood (Y, million m3) and the export value (X, million US$) (Table 8) in the period 2017 – 2020. The results show that there is a close relationship with the correlation coefficient R2 = 0.967 (F =88.168, Sig, F = 0.003). The correlation equation is established as Y = 26.58 + 0.001X. This correlation is shown in Figure 29.

Figure 29: Correlation analysis between raw wood quantity and export value

The amount of domestic and imported raw wood is calculated according to the average ratio of these wood to the total amount of raw wood in the country in the period 2017 – 2021.

The amount of domestic raw wood and the quantity of imported wood are calculated according to the average ratio of these wood to the total amount of raw wood in the country in the period 2017 – 2021. Specifically, the average amount of domestic wood accounted for 77.44% (column 8) and imported wood accounted for 22.56% (column 7) of total raw wood.

 

 

 

Table 10: The raw wood demand forecast in the period 2022-2030

Year Export value (million US$) The amount of wood needed now (million m3) Forecast of wood demand (million m3) The rate of increase (%)
Total amount of wood Imported

Wood

Domestic wood Total amount of wood Imported

Wood

Domestic wood
1 2 3 4 5 6 7 8 9
2017 7,658.7 34.10 7.3 24.3      
2018 8,908.9 35.90 7.6 26.5       5.28
2019 10,675 36.50 8.4 27.5       1.67
2020 12,270 38.5 8.5 28       5.48
2021 13,842 40.6 8.6 32       5.45
2022 15,193       41.8 9.42 32.35 2.89
2023 16,444       43.0 9.71 33.32 2.99
2024 17,667       44.2 9.98 34.26 2.84
2025 18,621       45.2 10.20 35.00 2.16
2026 19,580       46.2 10.41 35.75 2.12
2027 20,544       47.1 10.63 36.49 2.09
2028 21,510       48.1 10.85 37.24 2.05
2029 22,474       49.1 11.07 37.99 2.00
2030 23,433       50.0 11.28 38.73 1.95

 

Thus, in the period from 2022 – 2030, the demand for raw wood for the production of W&WP exports in our country will range from 41.89 million m3 to 50 million m3. The average annual growth rate ranges from 1.95% to 2.99%. In which imported wood require an average of 9.42 – 11.28 million m3/year, while domestic wood require 32.35 – 38.73 million m3/year.

– The raw wood demand forecast for processing W&WP for export to the EU market

The data on the country’s export value to the EU market in recent years is summarized as Table 11 (Prime Minister, 2022):

 

 

Table 11: W&WP export value in the period 2017-2021

Year Total country (million US$) EU (million US$) EU account for, %
2017 7,659 739 9.65
2018 8,909 785 8.81
2019 10,652 864 8.11
2020 12,372 536 4.33
2021 13,842 597 4.31

Source: Prime Minister, 2022

It can be seen that the value of W&WP exported to the EU market in recent years has accounted for a small part of the total export value of the country (about 4 – 10%). The survey results from enterprises also showed similar results. Although the proportion of enterprises’ exports to the EU market accounted for an average of 25 – 50%, the export value to the EU market only accounted for about 10% of sales. It is forecasted that in the period 2021 – 2025, export orders to the EU market will increase, but the rate of increase is not much, only about 10% (Figure 30). Therefore, the demand for raw wood for this market accounts for about 10% of the total amount of raw wood in the country.

Figure 30: Enterprises’ forecast of export value to the EU market

On the basis of a 5-level hierarchy on the ratio of using imported wood to the total amount of raw wood for the production of W&WP exported to the EU market (under 10%, 11 – 25%, 26 – 50%, 51 – 75%, over 75%), along with the survey frequency in enterprises for each level, the study has determined the average value is 2.67, corresponding to level 3 (from 26% to 50%). With the calculated average value, the amount of imported wood (average in recent years) accounts for about 37% of the total wood that enterprises use to produce W&WP for the EU market. This outcome is consistent with the specific reality of goods exported to the EU market, which require a greater amount of imported raw wood than goods exported to other markets such as the United States, Australia, Korea, and Japan. Therefore, it is forecasted that the amount of imported wood needed to produce W&WP for export to the EU market is on average 37% of the total demand for raw wood, and the amount of domestic raw wood needed is about 63% of the total demand for raw wood. Forecast results of the demand for raw wood for W&WP production exported to the EU market as shown in Table 12.

Table 12: Forecast of demand for wood for W&WP production exported to the EU market in the period 2022 – 2030

Year Total wood volume (million m3) Imported wood

(million m3)

Domestic wood

(million m3)

1 2 3 = column2 * 0.37 4 = column2 * 0.63
2022 4.18 1.55 2.63
2023 4.30 1.59 2.71
2024 4.42 1.64 2.79
2025 4.52 1.67 2.85
2026 4.62 1.71 2.91
2027 4.71 1.74 2.97
2028 4.81 1.78 3.03
2029 4.91 1.81 3.09
2030 5.00 1.85 3.15
Total period 41.47 15.34 26.13
Annual average 4.61 1.70 2.90

3.2.         Demand for wood type, quality, and legality of raw wood

– Demand for wood types:

The current situation of imported wood sources is facing many difficulties. In order to ensure profits, maintain production and develop in the future, finding domestic sources of raw wood to replace imported wood is the optimal solution for wood processing enterprises today. Research results show that over 70% of enterprises want and need to use acacia wood, 47% of enterprises have a need to use Melaleuca wood, and 44% of enterprises have a need to use rubber wood for future production orders (Figure 31). This result is also consistent with the desires of the actual surveying enterprises. They believe that acacia wood will become a trend in the future as a type of wood that can be substituted for imported woods. Therefore, the demand for this type of wood from wood processing enterprises is very large. Fierce competition is not only in the wood processing industry, but also in the industry of producing woodchips, practical boards, veneers, and wood pellets. Therefore, it is necessary to have a specific strategy to develop this source of raw wood appropriately.

Figure 31: Demand for wood

– Demand for quality wood:

All the results of the direct survey of enterprises said that it is necessary to plan to develop a stable source of raw wood for wood processing as well as to increase the afforestation of large timber wood to meet the demand for raw wood for the wood processing and export industry, which is growing at a high rate. The demand for raw wood for export wood products processing must be 17cm or more in diameter, equivalent to the age of 8 years or older.

– Demand for legality of wood:

The wood industry is in need of more raw material areas with full legal certificates and large-scale preliminary processing centers: Viet Nam exports a lot of W&WP, however, there are no large wood material areas nationwide, and there are no large-scale primary processing centers having the ability to meet new growth targets. Many wood industry enterprises are having to recalculate the production chain to cope with the situation of high raw material prices. There are few certified raw wood, and imported wood must be 100% clean. The main markets from which Viet Nam imports wood products include countries with high legal sources of raw wood such as the United States, Chile, New Zealand, and EU countries, as well as high-risk countries such as Laos, Cambodia, Africa, etc. Therefore, choosing the market for imported wood with 100% clean wood is a challenge for enterprises.

3.3.         Some conclusions about the demand on wood for processing W&WP for export to the EU market

– The general economic context, conflicts, and epidemics have forecasted that the slow increase of W&WP import orders from EU countries will affect the processing and export of W&WP products from Viet Nam to the EU market. Processing enterprises are receiving huge orders from other markets, especially the US, with less strict requirements than the EU market. It can be forecasted that, in the coming years, the production of wood products for W&WP exports to the EU market of Vietnamese enterprises will not increase much, at 10%, so the demand on wood for W&WP processing will not increase much, also at approximately 10%.

– The trend of using domestic wood will increase, the proportion of imported wood will decrease for W&WP processing for export, only importing the type of wood according to the requirements stated in the order.

– In the period 2022 – 2030, the demand on raw wood for W&WP production for export to markets ranges from 41.89 million m3 to 50 million m3/year. The average annual growth rate is about 1.95% – 2.99%. Imported wood require an average of 9.42 – 11.28 million m3/year, while domestic wood require 32.35 – 38.73 million m3/year. The demand on raw wood for W&WP production for export to the EU in the whole period was 41.47 million m3, an average of 4.61 million m3/year, of which an annual import of 1.7 million m3 and 2.9 million m3 of domestic timber are required.

– Legal wood for processing W&WP will be strictly controlled by the implementation of the EVFTA and FLEGT agreements within the EU and Viet Nam, and also controlled according to the regulations of each country in the EU.

4.    Preferential policies in support of processing W&WP for export

4.1.         Preferential policies in support of W&WP processing enterprises

In addition to general policies for enterprises, specific policies for wood processing enterprises mainly focus on the following legal documents:

4.1.1.    Land policy

Preferential land policies for enterprises in accordance with Government Decree No, 57/2018/ND-CP dated April 17, 2018 on mechanisms and policies to encourage enterprises to invest in agriculture and rural areas (Decree 57/2018/ND-CP) are specified as follows:

– Regarding exemption and reduction of the state’s land rent: as stipulated in Article 6, Decree 57/2018/ND-CP, whereby enterprises with agricultural projects with investment incentives will be exempted or reduced land rent with specific levels and periods ranging from complete exemption to 50% reduction for certain periods;

– Concerning land concentration support, it is specified in Article 7 of Decree 57/2018/ND-CP that enterprises with agricultural projects (especially investment incentives, investment incentives, and investment incentives) receive capital contributions from land use rights of households and individuals to form raw material areas, which is supported by the State to build infrastructure in raw material zones with a support level of VND 50 million/ha but no more than VND 10 billion/project. Enterprises are also not required to switch to leasing land for the land area receiving capital contribution with land use rights. At the same time, enterprises are encouraged to use agricultural land and aquaculture land to build agricultural product processing factories and accompanying infrastructure (storage, headquarters, internal roads, and waste disposal system).

  • Credit Policy

Credit policies for enterprises are regulated by Decree No, 55/2015/ND-CP dated June 9, 2015, of the Government on credit policies for agricultural and rural development (ND 55/2015/ND-CP) and Decree No, 116/2018/ND-CP dated September 7th, 2018 of the Government amending and supplementing a number of articles of Decree 55/2015/ND-CP. These policies focus on supporting enterprises in the following two areas:

– Credit support aiming to encourage production under the association model is specified in Article 8 of Decree 57/2018/ND-CP and Article 14 of Decree 55/2015/ND-CP, whereby:

+ In accordance with Article 8, Decree 57/2018/ND-CP, enterprises with investment projects in agriculture and rural areas are supported by the local budget with commercial loan interest rates after the project is completed with the support level: the difference between the commercial loan interest rate and the State credit interest rates for investment incentives is calculated on the actual debt at the time of considering the support dossier. The maximum interest rate support period is from 5 to 8 years depending on the type of project, and 8 years for newly established small and medium agricultural enterprises, line of credit with interest rate support: no more than 70% of the total investment of the project.

+ In accordance with Article 14, Decree 55/2015/ND-CP, enterprises associated with organizations and individuals directly engaged in agricultural production will be considered by credit institutions for unsecured loans up to 70% to 80% of the value of the project, as defined by the loan plan under the association model.

– Credit policies encouraging high-tech production are specified in Article 15, Decree 55/2015/ND-CP and Clause 8, Article 1, Decree 116/2018/ND-CP. Accordingly, hi-tech agricultural enterprises or enterprises with high-tech production and enterprises’ projects and plans may be granted unsecured loans from credit institutions up to 70% to 80% of the value of that project or option.

4.1.3.    Policy for investment and construction of infrastructure

Support for investment in infrastructure construction for enterprises is implemented in accordance with Decree 57/2018/ND-CP and Decree No, 98/2018/ND-CP dated July 5th, 2018 of the Government on policies encouraging the development of cooperation and association in the production and consumption of agricultural products (Decree 98/2018/ND-CP). The Prime Minister issued Decision No, 38/2016/QD-TTg dated September 14th, 2016 on a number of policies on forest protection and development and investment in supporting infrastructure, assigning public utility tasks to agro-forestry enterprises (Decision 38/2016/QD-TTg). The regulations focus on:

– Support to build processing factories in poor districts is specified at Point a, Clause 1 and Clause 2, Article 14, Decision 38/2016/QD-TTg. Accordingly, domestic investors with investment projects in industrial bamboo and forest wood processing factories in the Northwest, Central Highlands and poor districts according to Resolution 30a/2008/NQ-CP are supported from VND 10 billion to VND 20 billion/factory.

– Policies to support the construction of infrastructure for links are specified in Article 8, Decree 98/2018/ND-CP, the state’s budget is supporting the joint project with 30% investment capital in machinery, equipment, and infrastructure works in support of the links. The total amount of support shall not exceed VND 10 billion.…………………

– The policy to support investment in wood preservation, processing and by-product production facilities is specified in Article 11, Decree 57/2018/ND-CP. Accordingly, enterprises with investment projects in agricultural product processing establishments will support agricultural product processing establishments with 60% of the investment cost and not more than VND 15 billion/project to build infrastructure for waste treatment, transportation, electricity, water, factories, and purchase equipment in the project framework. Enterprises with investment projects in agricultural product preservation facilities (drying) are supported by the state’s budget with 70% of investment costs but no more than VND 2 billion/project to build transport; electricity and water infrastructure, waste treatment, plant and equipment purchases.

4.1.4.    Policy for increasing production capacity

Support policies to develop production capacity in accordance with Decrees 57/2018/ND-CP and 98/2018/ND-CP focusing on:

– Support for link building consulting is specified in Article 7, Decree 98/2018/ND-CP. Accordingly, the link leader is supported by the state budget with 100% of the cost of link building consultancy, up to a maximum of VND 300 million.

– Support for the synchronous application of the process and quality management is specified in Article 9 of Decree 98/2018/ND-CP. Accordingly, the involved parties are supported by the state budget under programs and projects for vocational training, technical training, improvement of management skills, market development, etc.

– Support for research, transfer, and application of high technology as specified in Clause 1, Article 9, Decree 57/2018/ND-CP. Accordingly, supporting enterprises to research, transfer, and apply agricultural technology at 80% of the implementation cost but no more than VND 300 million/topic/copyright/technology.

– Support in training human resources as specified at Point a, Clause 1 and Clause 2, Article 10, Decree 57/2018/ND-CP. Accordingly, support for enterprises to directly provide vocational training for employees at the rate of VND 2 million/month/employee with a support period of 3 months.

4.1.5.    Policy for consumption market development

This policy is specified in Decree 57/2018/ND-CP and Decision 38/2016/QD-TTg, specifically as follows:

– Support for market development (advertising, branding; building and managing the information page “farmer market”,…) specified at Point b, Clause 1, Clause 2, and Clause 3 of Article 10, 57/2018/ND-CP. Accordingly, authorities will support 50% of advertising costs, branding of national and provincial leading products; 50% of funds for participation in domestic and foreign exhibitions approved by authorities; supporting each enterprise to build and manage a portal “National Farmer’s Market” is VND 5 million/enterprise as long as its products have been posted on the national website; the total amount of support shall not exceed VND 5 billion.

– Support for transporting products specified in Points b, 1 and 2 of Article 14, Decision 38/2016/QD-TTg. Accordingly, post-investment support is calculated based on product transportation distance at the rate of VND 1,500/ton/km.

4.1.6.    Policy for W&WP export tax

The export tax policy specified in government decrees such as Decree 57/2019/ND-CP, Decree 57/2020/ND-CP, Decree 111/2020/ND-CP, and Decree 53/2021/ND-CP regulates the import and export tariff, whereby the tax rate for wood products is 0%.

4.2.         The situation of implementing preferential policies and supporting W&WP processing enterprises

4.2.1.    The interest and benefit from preferential and supportive policies

 

Figure 32: The status of benefiting from the policies of the enterprise

Figure 32 gives a picture of the situation of benefiting from policies of surveyed enterprises, it can be seen that:

– The proportion of enterprises that have not paid attention to these policies fluctuated from 26.1% to 13% for enterprises exporting to non-EU countries and 4.3% for enterprises exporting to the EU market;

– For non-EU countries, the proportion of enterprises benefiting from the policies fluctuated from 17.4% to 4% (with the land policy benefits the most enterprises and the market development policy benefits the fewest with 4.3%); for enterprises exporting to the EU market, only 2.2% are benefited to land policies; other policies are not yet benefited by enterprises.

Thus, the number of enterprises benefiting the current policies is still limited. The survey results show that many enterprises have not yet paid attention to these policies. The enterprises’ lack of interest comes for the following reasons: (1) ignorance (2) a lack of resources (no people to conduct research, no time, etc,) (3) regulations are still difficult.

4.2.2.    Difficulties in implementing policies

a) For the policy of land use levy exemption and reduction

 

Figure 33: Difficulties in implementing the policy of land use levy exemption and reduction

More than 30% of enterprises surveyed assessed that the regulations to benefit from this policy were difficult and mainly were enterprises that exported to the EU market; in which the percentage of enterprises that find the most inadequacies and difficulties is in terms of documents and procedures to apply for exemption, decreasing by 37%, followed by conditions for applying for exemption, decreasing by 34.8% (Figure 33). The results of direct interviews with 16 enterprises showed that:

– The enterprises whose currently benefit from this policy are only used it for extending time to pay the land rent due to the epidemic and the procedures are very complicated. It has to be explained a lot, but enterprises do not have enough resources (human resources, time…). Some enterprises have reported that their ground rent in the last 3 years has increased from VND 250 million/year to VND 3.3 billion/year, while their profit averages VND 1 billion/year (The high ground rent is due to the fact that the land that they were renting from the industrial park is now planned as suburban land, which changes the land price).

– Some enterprises reflect that FDI enterprises have more advantages when reducing the ground rent due to the state’s policy to attract foreign investment. This is the point leading to inequality between FDI enterprises and domestic enterprises.

– Most of the wood processing enterprises are currently located in industrial zones, rented from industrial parks, so they are not benefited to this policy. There are some of the difficulties in renting land for enterprises as follows:

+ Many wood processing enterprises have not been given priority to rent in convenient places for transportation, while this is an important factor to help enterprises reduce costs, especially in the current period because the characteristics of the wood processing industry are that the wood and products are very bulky, needing a large space for production lines, timber yards, and warehouses for finished products.

+ For large enterprises that want to invest in the chain of production from purchasing round timber to selling products, having to rent land in industrial zones will create more difficulties for enterprises because of high ground rent and service fees.

b) For the policy of supporting credit loan

Figure 34: Difficulties in implementing credit loan support policies

Figure 34 shows the difficulties of implementing the credit loan policy of the surveyed enterprises. More than 30% of enterprises assessed that the regulations on loan terms, the mechanism to guarantee loans and lending interest rates are still difficult, and they are mainly enterprises exporting to the EU market; in which the percentage of enterprises that find it inadequate and difficult is the highest in terms of conditions to get a loan at 34.8%. The results of direct interviews at 16 enterprises showed that: most enterprises reported that although they were supported by commercial banks with interest rates, the lending interest rates were still high and the terms were short. Therefore, it is not suitable for the wood processing industry; loan procedures are complicated and have to go through many stages to get certification; the processing time for preferential loan applications is often long, so getting a loan for investment is often late compared to the investment plan.

c) For the policy to support infrastructure construction

Figure 35: Difficulties in implementing policies to support infrastructure construction

Over 30% of surveyed enterprises assess the regulations on conditions for support; dossiers and the order of applying for support are still inadequate and difficult, and they are mainly enterprises exporting to the EU market; in which the percentage of enterprises that find it difficult is  in terms of conditions for support, at 37%.

The results of direct interviews with 16 enterprises showed that:

– Many enterprises reckon that this policy only benefits the Management Board of the Industrial Parks. Wood processing enterprises are now mostly located in industrial zones, so they are not benefited to this policy. They also have to pay a relatively high fee for infrastructure services for the industrial park (up to VND 700 million/year for some enterprises) and there is no preferential or fee reduction policy.

– The current fee for infrastructure services in industrial zones is not suitable for wood processing enterprises. Calculating fees by area and by lumpsum like other industries (require less area, higher production value …)  is not suitable because the characteristics of the wood processing industry are bulky machinery, wood and products, requiring large areas.

d) For the policy of supporting the development of production capacity

Figure 36: Difficulties in implementing policy to support production capacity development

The results of a survey of 46 enterprises on the difficulties of implementing policies to support the development of production capacity show that (Figure 36): 34.8% of enterprises surveyed assessed that the regulations on conditions for support were still difficult, and these were mostly enterprises that exported to the EU market. Other regulations also have difficulties, but the rate is less than 30%. Direct interviews conducted at 16 enterprises revealed that:

– Most enterprises are not benefited to this policy; enterprises usually provide vocational training for workers themselves.

–  Some enterprises believe that the working style of employees, particularly those of ethnic minorities, are often unprofessional, and that their sense of discipline is low; at the same time, the responsibility of local authorities in creating a professional labour source for enterprises is unclear.

e) For policy to support market development

Figure 37: Difficulties in implementing market development policy

Over 30% of surveyed enterprises assess the regulations on conditions for support about the dossiers, the order of applying for support and the level of support are still inadequate and difficult, and these enterprises are mainly enterprises that export to the EU market; in which the highest percentage of enterprises that find it difficult is in terms of conditions for support, with 37%, followed by dossiers, the order of applying for support, and support levels, all at 30.4% (37). Interview results at 16 enterprises show that most of the enterprises handle their output market themself; the locality has not yet paid attention to the promotion of trade in forest products in general and timber in particular.

 

 

  1. f) For the implementation of export tax policy

Table 13: Summary of results of the assessment of the implementation of export tax policies for leading W&WP products

 

No

 

Product

Suitable Not suitable Not response
Total Export to EU market Export

to non-EU market

Total Export to EU market Export

to non-EU market

Total Export to EU market Export

to non-EU market

1 Indoor Furniture 15 13 2 5 3 2 26 22 4
2 Outdoor Furniture 15 14 1 2 1 1 29 23 6
3 Types of boards 8 8 0 3 2 1 35 28 7
4 Lumber 8 8 0 1 0 1 37 30 7
5 Construction Wood 6 6 0 1 0 1 39 32 7
6 Other products 6 6 0 1 0 1 39 32 7

 

Table 13 summarizes the results of the assessment of the implementation of export tax policies for the leading W&WP products, showing that most of the respondents think that the export tax policy for these products is appropriate. There are some opinions that this policy is not appropriate, but they do not state the reason and do not have specific suggestions. There is a high percentage of enterprises that do not answer this question. Perhaps this is not a serious problem, so enterprises do not care about it.

The results of direct interviews at 16 enterprises show that enterprises assess the current export tax as appropriate. However, to increase the source of wood from domestically planted forests for export, enterprises suggest limiting the export of woodchips by increasing the export tax on woodchips to 20 – 30%.

4.3.         The demand for policy innovation promotes enterprises to gradually reduce the use of imported wood and increase the use of domestically planted forest wood for processing W&WP for export

The survey results show that the use of wood for export products by enterprises depends on the requirements of customers and each item, Currently, domestic wood for export production, especially for export to the EU market, are used a lot, especially during this time when the supply is broken and transportation costs are high. The problem is that there must be a supply of quality raw wood (both in terms of size, hardness, …); this is a matter of having policies to promote the supply of raw wood for wood product production in general and W&WP exports in particular,

The bottlenecks and gaps need to be overcome in current policies to promote processing enterprises to gradually reduce the use of imported raw wood and increase the use of domestically planted forest wood for processing wood and wood products:

– The propaganda and implementation of policies have not reached the beneficiaries, basically just stopped at the implementing agencies and associations;

– Some policies are not really practical for enterprises, specifically as follows:

+ There is no equality between FDI enterprises and domestic enterprises in the implementation of land policies; the land lease policy has some shortcomings;

+ Wood processing enterprises have not paid attention to specific conditions when implementing regulations on fee collection for infrastructure services in industrial zones, …; there are no regulations to promote the use of domestic wood;

+ Human resources for the wood processing industry are limited, especially in terms of professional working styles.

Figure 38: Proposing policies to promote enterprises to use wood from domestic plantations

The survey results summarized in Figure 38 show that there are five groups of policies that need to be innovated so that enterprises can gradually reduce the use of imported wood and increase the use of domestic wood to process W&WP for export. In which, it is necessary to renew credit policies for enterprises to develop the market, which is agreed upon by 65.2% of enterprises, followed by policies on supporting the development of the wood material supply network and the development of information systems for enterprises.

  • Some key findings on preferential policies and support for W&WP processing enterprises for export

Due to the characteristics of production in the W&WP processing sector, such as large production space, bulky production lines, using lots of manual labor, large quantity of input wood, low value added, and the complication of input and output markets, except for the preferential export tax policy, the current preferential and supporting policies for enterprises are less suitable, especially the land policy and credit policy. This needs to be studied and considered the specificity of W&WP production in order to issue specific regulations for W&WP processing enterprises.

The policy of industrial zones is not suitable for the production characteristics of W&WP processing facilities, such as increasing the cost of raw wood because it has to go through many layers of the raw wood supply network (exploitation, preliminary processing, drying); the high cost of renting land, renting infrastructure, not directly being benefited to the policy of infrastructure development and ground rent… W&WP processing facilities in industrial zones create two problems: firstly, enterprises are self-limited in a production stage which is processing in the value chain; secondly, there is a lack of vertical linkage for raw material supply. This is an issue that needs to be studied so that localities can create conditions for W&WP processing enterprises to locate at suitable production sites, thereby encouraging the use of domestic wood.

– Approaching policies is still difficult because of the complexity and impracticality of W&WP processing enterprises. Enterprises may also face risks due to declaration to access policies due to unclear or complicated procedures, especially the policy on capital support or the government’s support packages. Therefore, they pay little attention to preferential and support policies.

– Policy propaganda and dissemination are still limited. Most of the surveyed enterprises do not fully understand or even do not know that these policies exist.

5.    Proposing solutions and policy recommendations

5.1.         Proposing solutions

5.1.1.    Solutions for effective management of raw wood

– To be proactive in the source of raw wood for processing plants and towards building a sustainable source of wood for export, it is necessary to have a plan to create a large concentrated raw material area, associated with the planning of processing facilities and consumption markets.

– Chain links, especially links between wood processing enterprises and afforestation households, between processing enterprises and forestry enterprises, and between processing enterprises and foreign enterprises in the form of high-quality investment, along the production chain, have the potential to create breakthrough developments in the processing industry in particular and the forestry industry in general.

5.1.2.    Solutions to improve the quality of domestic raw wood

– Forest timber is the main solution to help Viet Nam’s wood and forest product processing industry continue to develop. Although domestic raw wood meets nearly 80% of production and processing needs, nearly 70% of that wood is wood of small size, producing only products such as wood chips and artificial boards. The urgent problem is how to get the domestic source of wood, which is large, high-quality, diverse wood, which is a matter of concern to enterprises.

– Apply science and technology to the production of raw wood including selection and breeding, control and quality assurance of forest varieties, and improvement of technical measures for forest-intensive farming to increase productivity and quality of the planted forest and meet the requirements of wood processing technology and consumer tastes.

– Promote the development of timber having certification of sustainable forest management.

– It is necessary to have a strategy to develop timber sources that have forest planting wood. The strategy includes diversifying forest timber species in the future to meet the diverse needs of species used in processing. In addition to acacia and rubber trees, manglietia conifera and bodhi trees are providing raw wood for the processing industry, it is necessary to research and add some new trees to meet the market’s needs such as oleander, acacia pycnantha, teak tree…

– It is necessary to focus on creating an environment to attract processing enterprises to invest in plantation material areas. Links between enterprises and afforestation households to create a large source of high-quality timber has the potential to improve the efficiency of households’ land use. It is necessary to propagate for people to understand the meaning and economic value of large timber plantations.

– Investing and developing an intensive and professional pre-processing model to improve the quality of pre-processed wood.

5.1.3.    Solutions for technical improvement and production level

– It is necessary to renew old and outdated technologies with advanced, environmentally friendly technologies that save raw wood, fuel and energy. Building large-scale concentrated preliminary processing clusters in concentrated growing areas; conducting the construction of timber trading centres in 3 regions: North, Central and South.

– Support wood processing enterprises to associate and cooperate with research institutes, universities, and vocational schools in deploying science and technology applications to meet the needs of technological innovation; support training in technology and skills for technicians and workers.

5.2.         Recommendations for orienting preferential policies and supporting W&WP processing

5.2.1.    For policies related to land use levy

– It is necessary to ensure equality between domestic wood processing enterprises and FDI enterprises;

– It is necessary to determine that the land rental price of enterprises for the production of wooden furniture cannot be as high as that of enterprises that only provide services;

– Create favourable conditions for wood processing enterprises to lease land outside the industrial zone for production in chains from preliminary processing to production and consumption of W&WP. At the same time, creating conditions for wood processing enterprises to lease land in convenient places for traffic and infrastructure;

– It is necessary to make adjustments to the policy of land use levy exemption and reduction for enterprises, especially to benefit small and medium enterprises, according to the policy of the land use levy exemption and reduction policy in Decree 57/2018/ND-CP, enterprises in industrial zones or those who had rented land before these policies were issued, will not be benefited. Meanwhile, in the central and southern provinces, many enterprises are in these cases (many are located in industrial zones, and some have been operating for a while) and are now facing difficulties and need to be taken care of to be able to continue operating,

5.2.2.    For infrastructure, credit and market policies

– Researching to change the way of charging for infrastructure services in industrial zones, Currently, the calculation of fees based on the common area for the same industries is not appropriate because the characteristics of the wood processing industry are bulky machinery, wood, and products that require a large area;

– Creating favourable conditions for enterprises to reduce lending interest rates when using domestic raw wood to produce W&WP for export; credit support for enterprises to produce new products from domestic raw wood for export;

– Creating favourable conditions for W&WP exporters to reduce storage costs due to the impact of epidemics or natural disasters;

– Supporting the building of markets/centres/exchanges for plantation timber wood, switching from “selling what enterprises have” to “selling what the market needs”;

– Localities need to closely coordinate with the Timber Association to promote the trade promotion of wood products.

5.2.3.    For the production capacity development policy

Localities need to pay attention to training in industrial working styles and manners for local workers to provide human resources for enterprises instead of specific vocational training as at present.

 

 

PART IV: CONCLUSIONS AND RECOMMENDATIONS

1.    Conclusion

Researching the demand raw wood for processing W&WP for export to the EU market in the context of the implementation of the EVFTA Agreement and the implementation of the VPA commitments has closely followed the objectives and objects. The research also implemented the contents by appropriate research methods, having achieved the set objectives, which are:

Firstly, analyse the situation of using raw wood in the period of 2018 – 2021 and forecast the demand on raw wood for processing W&WP for export to the EU market in the period of 2022 – 2030. To achieve this goal, research has shown:

+ An overview of processing W&WP for export to the EU market on a national scale and from the facts at research enterprises, thereby drawing out key findings about the characteristics of the EU market and enterprises whose products are mainly exported to this market. This is the analysis of the demand on wood for processing W&WP for export to the EU market;

+ Clearly analyse the situation of using imported raw wood; domestic wood (round timber, lumber, board) in terms of quantity, development, type of imported wood, assessment of advantages of each type of source, etc., thereby giving key findings on imported raw wood and domestic raw wood material. This is the analysis of the supply of wood for processing W&WP for export to the EU market;

+ The research has forecasted the demand on wood for processing W&WP for export to EU markets and markets in the period 2022 – 2030;

+ Proposed management, domestic raw wood quality improvement, technical improvement, and production organization solutions,

– Secondly, analyse the implementation of preferential policies, support enterprises, and propose policy orientations to support processing enterprises to gradually reduce imported wood and increase the use of domestically planted forest wood for processing W&WP to the EU market. To achieve this goal, the research has:

+ Systematized preferential policies, support enterprises in land, credit, infrastructure construction investment, production capacity development, product consumption market development, import and export tax;

+ Analysing the implementation of the above policies in the past period, difficulties and shortcomings, the need for policy renewal, and four important issues have been discovered, which are the inappropriateness of the current policy; policies on industrial zones for W&WP processing enterprises; issues concerning policy access, policy propaganda, and education;

+ Recommendations for policy orientation focusing on land use levy; infrastructure, credit, and markets; and developing production capacity so that enterprises gradually reduce the use of imported raw wood and increase the use of domestic raw wood for processing W&WP for export.

2.    Recommendations

Because the research scope is limited to W&WP processing enterprises exporting to the EU market. This is the source of demand on the supply chain of raw wood, so research related to afforestation and domestic supply of forest timber for processing W&WP for export have not been implemented. The research team recommends that in 2023, there will be continued research related to plantation forests and policy mechanisms to meet the demand on wood for processing W&WP for export.

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REFERENCES

  1. Ministry of Agriculture and Rural Development, 2019, Report of the Ministry of Agriculture and Rural Development on: “The wood and forest product processing and export industry in 2018- success, lessons learned; breakthrough solutions in 2019” at the Wood and Forest Product Export and Processing Industry Forum in 2019 – Success, lessons learned; breakthrough solutions dated February 22th, 2019 in Ha Noi.
  2. Ministry of Agriculture and Rural Development, 2014, Decision No, 774/QD-BNN-TCLN dated April 18th, 2014 of the Ministry of Agriculture and Rural Development on Action plan to improve productivity, quality and value of planted production forests in the period 2014 – 2020.
  3. Ministry of Agriculture and Rural Development, 2020, Forestry development strategy of Viet Nam for the period 2021-2030, with a vision to 2050, page 135.
  4. Government 2019, 2020, 2021, Government decrees: 57/2019/ND-CP on , 57/2020/ND-CP, Decree 111/2020/ND-CP and Decree 53/2021/ND- The CP regulates the import and export tariff.
  5. The government, 2015, Decree No, 55/2015/ND-CP dated June 9th, 2015 of the Government on credit policies for agricultural and rural development; Amended and supplemented by Decree 116/2018/ND-CP dated September 7, 2018.
  6. The Government, 2018, Decree No, 116/2018/ND-CP dated September 7th, 2018 of the Government amending and supplementing a number of articles of Decree 55/2015/ND-CP.
  7. The Government, 2018, Decree No, 57/2018/ND-CP dated April 17th, 2018 of the Government on mechanisms and policies to encourage enterprises to invest in agriculture and rural areas.
  8. The Government, 2018, Decree No, 98/2018/ND-CP dated July 5th, 2018 on policies to encourage the development of cooperation and association in the production and consumption of agricultural products.
  9. Viet Nam Forest Owners Association, 2021, Study on demand for plantation timber for processing and export to meet the requirements of the EVFTA Agreement and the implementation of VPA commitments in Viet Nam, Consulting Report August 2021.
  10. Viet Nam Forest Owners Association, 2018, Research on the market of raw wood for wood processing and export in Viet Nam, Actionaid, Embassy of Finland – 2018.
  11. Network of Vietnamese Non-Governmental Organizations on Forest Law Implementation, Forest management, and Trade (VNGO-FLEGT), 2015, Study to assess the ability to meet household-level legal timber standards in Nghe An province.
  12. Nguyen Ba Ngai and Nguyen Quoc Tri, 2020, Forestry of Viet Nam: 75 years of establishment and development (1945-2020), Agriculture Publisher – 2020.
  13. Go Viet Magazine, 2020, Import situation of W&WPin Viet Nam 2020 ,Go Viet No, 130, January 2021, https://goviet,org,vn/bai-viet/tinh-hinh-xuat-nhap-khau-go-va-san-pham-go-cua-viet-nam-nam-2020-9252.
  14. Vietnamese Wood Magazine, 2020, Viet Nam imports and exports W&WPin 2021, Viet Wood Magazine, https://goviet,org,vn/bai-viet/bao-cao-viet-nam-xuat-nhap-khau-go-va-san-pham-nam-2021-9632
  15. Go Viet Magazine, 2020, Viet Nam imports and exports W&WP, the current situation in 2020 and the trend in 2021, Go Viet Magazine, https://goviet,org,vn/bai-viet/bao-cao-viet-nam-xuat-nhap-khau-go-va-san-pham-go-thuc-trang-2019-va-xu-huong-2020-9099.
  16. Wood Viet Magazine, 2020, Viet Nam imports and exports W&WP, current situation in 2019 and trends in 2020.
  17. To Xuan Phuc, Cao Thi Cam and Tran Huy Le, 2019, Viet Nam’s W&WPexports – Current Situation in 2019 and Trends in 2020, Report published by the UK government’s Development Cooperation Agency and sponsored by the Government of Norway, February 2020.
  18. Prime Minister, 2016, Decision No, 38/2016/QD-TTg dated September 14, 2016 of the Prime Minister on a number of policies on forest protection and development, investment and support for infrastructure strata, assigning public utility tasks to agro-forestry enterprises, (Article 14 supports the processing of specific plantation timber for poor provinces).
  19. Prime Minister, 2022, Decision 327/QD-TTg dated March 10th, 2022 of the Prime Minister approving the project on the development of sustainable and effective wood processing industry in the period 2021 – 2030.
  20. Center for Sustainable Rural Development, 2020, Status of afforestation households and micro and small enterprises producing timber before implementation of VPA-FLEGT.
  21. WTO and CCI Center, 2016. The report has studied the export wood processing industry policy, analyzed the main risks of the export wood processing industry.

 

 

 

 

APPENDIX

(Soft copy attached with financial report)

 

Appendix 01: INTERVIEW QUESTION FORM OF WOOD FOR EXPORT W&WP PROCESSING (to be sent to 130 forest product processing enterprises)

Appendix 02: SELL-ORIGINAL INTERVIEW TABLE (used for interviews at 16 forest product processing enterprises)

Appendix 03: DATA ANALYSIS RESULTS

Appendix 04: LIST OF 46 ENTERPRISES ANSWERING INTERVIEW QUESTIONS (to save for non-disclosure due to commitments with the enterprise)

Appendix 05: LIST OF 16 ENTERPRISES THOROUGHLY INTERVIEWED (to keep for non-disclosure due to commitment with the enterprise)

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[1] HS Code 94 for Viet Nam includes items like furniture, bedding, mattresses, mattress frames, and similar stuffed items, as well as lamps and luminaires that are not otherwise specified or included, illuminated nameplates, illuminated signs. The prefab home codes range from HS 9401 to HS 9406.

2 A new generation free trade agreement between Viet Nam and Member States of the European Union.

 

[3] Sent to 130 exporting W&NTFP processing enterprises and received 46 responses from 46 enterprises (response rate: 35.38%)

[4] Export figures to the EU market in 2020 and 2021 do not include the UK (EU27), while in previous years it was EU28 (including the UK).

[5] Prime Minister, 2022. Decision 327/QD-TTg dated March 10th, 2022, of the Prime Minister approving the Project on the development of a sustainable and effective wood processing industry in the period of 2021 – 2030

[6] Ministry of Agriculture and Rural Development, 2020 The forestry development strategy of Viet Nam in the period of 2021 – 2030, with a vision to 2050