Vietnam: Wood Products Exports to Reach Record High in 2018
Vietnam’s wood and wood products exports reached a record high in the first 11 months of 2018 to US$7.22 billion, up 15.63 percent compared to the same period last year. In the last decade, the country’s wood processing industry has grown 2.7 times, making Vietnam the world’s fifth largest wood exporter with a market share of six percent, second largest in Asia, and first in Southeast Asia.
The number of enterprises has grown from 2,500 in 2008 to 4,500 in 2017, including 3,900 domestic and 600 foreign-funded enterprises. Earlier, foreign firms accounted for over 70 percent of the country’s total wood exports, but now, the share of domestic firms in total exports has reached 53 percent.
The wood industry is one of the largest export industries in Vietnam. To ensure a sustainable growth and conservation, the government issued Decision No: 1288/QD-TTg in October 2018, approving a project on sustainable forest management and forest certification by establishing the national forest certification system
Wood production and processing
Wood production in 2017 was estimated to be 11.5 million m3, up 12.4 percent. In the first 11 months of 2018, it was 11.6 million m3, growing by 10 percent compared to the same period last year.
Major provinces of wood production in 2017 were Tuyen Quang, Quang Nam, Quang Ngai, and Binh Dinh.
In the wood processing sector, Binh Duong attracts a large number of enterprises due to its labor force and its linkages to key timber areas in the Southeast and Central Highlands of Vietnam. In 2017, Binh Duong’s wood processing exports reached US$4 billion, accounting for 54.8 percent of Vietnam’s total wood exports. In the first six months of 2018, their exports have already reached US$1.5 billion.
In the first 11 months of 2018, forestry products exports were estimated at US$8.49 billion, up 16.6 percent, accounting for almost a quarter of the total agriculture-forestry-fishery exports.
Within forestry products, wood and wood products exports reached US$7.22 billion during the same period, up 15.63 percent compared to the same period last year.
Exports are estimated to reach US$9.3 billion in 2018, with trade surplus estimated at US$6.4 billion.
Major export markets include the US, Japan, the European Union (EU), China, and Korea, accounting for 87.33 percent of the total exports.
In the first 11 months of 2018, imports of wood and wooden furniture reached US$2.1 billion, up 6.17 percent, compared to the same period last year.
Major import markets include China, the US, Cambodia, and Thailand.
In October 2018, Vietnam and the EU signed a Voluntary Partnership Agreement (VPA) on Forest Law Enforcement, Governance, and Trade (FLEGT). This agreement will help improve regulations on forest management, reduce illegal logging, and increase exports of timber products to the EU.
In addition, the upcoming Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will lead to a further increase in export orders.
To achieve the government’s exports target of US$12-13 billion by 2020 and retain their competitiveness, companies in the wood processing sector need to continue to focus on improving efficiency and increasing investments in advanced technologies and equipment.
Vietnam Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia and maintains offices in China, Hong Kong, Indonesia, Singapore, Vietnam, India, and Russia.
- Previous Article Expanding Investments in Quang Ngai Province
- Next Article Hiring Mid-Level Managers in Vietnam