Global trade of wood products & VN wood

industry development 2021 – 2025 & further

Ngô Sỹ Hoài,
Vice President & Secretary General,
Vietnam Timber & Forest Products Asociation (VIFOREST)

Structure
1. Two concerns of VN forestry & WI
2. Wood in the world vision
3. Global WP trade
4. VN exporting/importing W&WP
5. Problems faced
6. VN WI development 2021 – 2025 & further
7. Conclusions
1. Two concerns of VN forestry & wood industry
- Natural disasters in Central Vietnam: Deforestation &
micro hydropower toughly accused – drastic shift to
environmental forestry and CC responsive forestry
needed !
- Trade protectionism

• USTR initiated Section 301 investigation on VN

importing, using & trading illegal timber & posible
tariff imposition!
• Anti-dumping/anti-circumvention duties (AD/ACD);
• AD imposed on plywood exported to South Korea
(10%);
• US investigation against plywood destined to US;
➢ Timber legality assurance and trade-protection
countermeasures.
2. Wood in the world vision
2.1. Wood & emission reduction
2.2. Wood – truly green & environment
friendly material
➢ Best building material &
most environ friendly
material:
• Renewable
• Little sewage/wastewater
• Less energy
consumming
• Better insulated
• CO2 storage
➢ “Wood is good” & “W4W
– Wood for World”
➢ Supply over demand !!!
Wood benefits: No better material to solve greenhouse emission !.

Strength Echo absorption Energy effective Bio-decomposable & renewable

3. Global trade of WP

（100 million USD）

6000
5000
4000
3000
2000
1000
0
1997
1998
1999
2000
2001
2002
2003
2004

2006

2008
2009
2010
2011
2012
2013
2014
2015
2016
2005

FAOSTAT 2007
464.21 billion USD in 2016, growth 66.7% against 1997 due to
international labor division, science & technology progress,
trade liberation & economic growth after 2008 crisis leading to
growth of wooden products trade.
Dimension of global wooden products
trade: 465 billion USD
• Log: 249 million m3 (13% of harvested
wood)
• Lumber: 287 million m3 (61%)
• Wood-based panels: 174 million m3 (42%)
• Wooden furniture: 160 billion USD (85
billion in 2005) (China, Italia, Germany,
Poland & VN share 32% of exports)
Wrong perception/prejudice: wood is
scarce !
Changes: New pattern of trade being formed

• Wood processing & trade more concentrated in Asia,

North America, Europe, & developing countries play
more important role in global wooden products trade;
• North America & Europe: Reduced 71% - 63% in
2006 – 2018 and important role continued;
• Asia, Africa & Oceania: trade share increased;
• Africa & Oceania trading majorly log and sawn
timber;
• China topping.
Changes: More green based trade

Combating illegal logging

Green economic is the backup of green
growth requires trade and ensure
the green sustainable green
trade/green development
product trade

Forest certification
ensure the timber
trade traceabiligy and
the sustainable forest
management
Green trade/green
product trade will be
the next growing
engine for green
economic
development
Trend: Two-way transfer of world WI

from the two-way transfer: upmarket

UK to industry back to developed
Europe from Japan and countries and low-valued
and North Germany to four industry chain kept in
America Asian Tigers developing countries
first Third Fifth
industry Fourth
industry Second industry
transfer industry
transfer industry transfer
transfer
transfer

from USA from USA, Japan,

to Japan Germany and four
and Asian Tigers to
Germany developing
countries, including
China
4. Vietnam exporting/importing WP
4.1 The evolution of Vietnamese wood businesses
▪ Before 2000: exported mainly log, lumber, semi-finished
products
▪ From 2000 up to now:
➢ Outdoor → indoor furniture;
➢ Outwork of customer designs → designing &
manufacturing;
→ Exporting living interior;
➢ Utilization of entire biomass from planted forest:
woodchip, wood pellet, wooden furniture.
▪ 2 comparative advantages:
➢ Low labor force;
➢ Plantation wood abundant (3 million ha of commercial
acacia plantation (Kingdom of acacia) + 1 million ha of
rubber farms).
4.2. Vietnam’s WP export
2009 - 2020
WP export destinations
WP exports to top markets
 W&WP exports by key groups of product
Wood pellet Fiber board Peeled veneer Particle board

Export volume 3.2 Export volume 111.2 Export volume 694.23 Export volume 39.7
million tons, valued thousand M3, value thousand M3, value thousand tons, value
at: US$ 352.03 US$ 45.78 million, US$ 81.69 million, US$ 9.5 million, 16%
million , 15% up in 28% down in volume 94% up in volume and down against 2019
quantity and 13% up and 1 % in value 51% up in value
in value against 2019. against 2019 against 2019
Plywood Woodchip Chair Wooden furniture

Export volume 2.09 Export volume 11.6 Export value US$ Export value US$
million M3, value million tons, value 2.67 billion, 32% up 5.87 billion, 22% up
US$ 719.41 million, US$ 1.48 billion, 3% against 2019 against 2019
0.2% down against down in volume and
2019 12% down in value
against 2019
Wood consumption for exported WP (log
equivalent m3) 2019, million m3
25.00
Triệu m3 quy tròn

26,00
20.00

15.00

10.67
10.00

6.67

5.00 3.93 3.63

2.43

0.26
0.00
Dăm gỗ Viên nén Gỗ tròn & xẻ Các loại ván Ghế ngồi Đồ nội thất SP gỗ khác
4.3. W&WP imported into Vietnam,
2009-2020
W&WP imports by markets, 2020
Value of W&WP imported into Vietnam
by supply markets, 2020
 Imported W&WP
Logs Fiber board Sawn wood Particle board

Import volume 2.02 Import volume 744.67 Import volume 2.54 Import volume 434.72
million M3, value thousand M3, 8% up million M3, value thousand M3, value
US$ 563 million in volume and 2 % up US$ 842.06 million, US$ 84.69 million,
USD, 13% down in in value against 2019 9% down in volume 16% up in volume
volume and value and 1% down in value and 7% up in value
against 2019 against 2019 against 2019
Plywood Veneer Chair Wooden furniture

Import value 604.28 Import value 275.98 Import value (HS Import value (HS
thousand M3, 16% up thousand M3, value 9401) US$ 163 9403) US$ 187.95
in volume and 6% up US$ 208.13 million, million, 28% up million, 51% up
in value against 2019 27% up in volume and against 2019 against 2019
9% up in value against
2019
Imported WP
Wood processing clusters

➢ Bình Dương: USD 5.0 billion USD

➢ Đồng Nai: USD 1.6
➢ HCM: USD 1,2
➢ Hà Nội: USD 0.6
➢ Bình Định: USD 0.54
➢ Vĩnh Phúc: USD 0.199
➢ Nghệ An: USD 0.161
➢ Quảng Ngãi: USD 0.157
➢ Quảng Ninh: USD 0.151
➢ Quảng Nam: USD 0.138
5. Problems faced by VN wood
businesses
▪ Extensive development using 2 advantages
✓ Cheap & low quality raw material (acacia & rubber);
✓ Low wage labor (250 – 350 USD/month), shortage of labor force in near future
▪ Small scale, equipment & technology limit, low labor productivity
✓ Over 5.000 SMEs (3.000 engaged in export/import) & 340 wood villages
✓ Newly set up businesses, scarcity of capital to invest in and modernize
production
▪ Wood legality assurance
✓ Wood legality becomes a “to be or not to be” question!
✓ FSC plantation: 300,000 ha;
✓ Wood import from 100 sources, tracibility trouble;
✓ VPA/FLEGT still have uncertainties.
▪ Lack of branding & designing
✓ Outwork for overseas traders (IKIA, Carefoor, ScanCom….);
✓ Low value added WP.
▪ Risk of trade protection and loss of markets
✓ Relocation of production
✓ South Korea imposed AD tariff on plywood
✓ US investigation on plywood
✓ USTR: Section 301 investigation on VN import, use and trade of illegal timber (!)
6. Wood industry development 2020 –
2025 & further
Vision
▪ Wood industry becomes key sector of VN
economy;
▪ VN becomes one of the top WP & NTFP
producers & exporters with re-known brands
(responsible wood industry development !).
Wood industry development 2020 – 2025
& further (continue)
Objectives
▪ Satisfy local WP demand expected to be 5 billion USD in
2025 (8% growth rate) & 6 billion in 2030 (6%);
▪ Export of WP and NTFP: 18 billion – 20 billion USD in
2025 (12%) & 23-25 billion in 2030 (12%).

Solutions
▪ Development of woodworking clusters connected with
raw material areas in various ecological zones;
▪ Establishment of concentrated wood
processing/preserving areas with advanced technologies;
▪ Development of machine manufacturing, forest
equipment production, associated industries;
socialization of resources for branding WP made in VN.
7. Conclusions
• Export of WP and NTFP ranks No. 6 following
telephones, computers, garments, shoes and
machine manufacturing, market share available,
however, risks are more;
• Forest & wood becomes more and more environ &
social sensitive, wood legality becomes “to be or not
to be”:
• VN has emerged as a leading center of world WP
and the need to improve VN environ friendly image
& responsible development;
• On the way towards the target of 20 billion USD in
2025, Viet wood has to change its mindset of net
benefit (VN net earning) rather then the size of
export revenue.
Thanks for your attention !