In the final months of the year, the wood industry faces both opportunities and challenges.
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- 22:26 15/08/2023
DNHN - In reality, forestry businesses, particularly woodchip businesses, are experiencing a 60% decline in orders compared to the previous year.
The Department of Forestry, Ministry of Agriculture and Rural Development, cited alarming export figures for Vietnam's forest products in the first seven months of the year. The export value of forest products fell sharply, reaching USD 7.78 billion, a decrease of 25.5% compared to the same period last year. Particularly impacted was the export of wood and wood products, which fell by 26.2%, or USD 7.21 billion. Wood products decreased by 30 percent and wood materials by 14.2 percent. Non-timber forest products did not escape the adversity, reaching $580 million, a decrease of 15.4%.
Vietnam's principal export destinations for forest products are the United States, Japan, China, the European Union (EU), and South Korea. In just seven months, the total export value to these markets has reached USD 5.44 billion, representing 89% of the country's total export value of forest products. With an impressive $3.1 billion, the U.S. market has dominated among these.

According to Mr. Ngo Sy Hoai, Vice President and General Secretary of the Vietnam Timber and Forest Products Association, even though several businesses have received orders, there are still a great number of obstacles to overcome as the market's purchasing power continues to decline. In the hope that the market will improve and boost production, many businesses are struggling to maintain their current level of output. Shortly, however, the sharp increase in orders is still relatively modest. Forest enterprises must reduce staff to alleviate cost pressures, including salary, social insurance, and union dues. Some are even required to work only four or five days per week. There are even companies that intend to operate only when there are orders and halt production while awaiting new ones.
Forestry businesses, particularly woodchip businesses, are experiencing a 60% decline in orders compared to previous years. Therefore, despite the possibility of order growth in the final months of the year, it will be extremely difficult to reach the same level as last year.

In addition to the market decline, the delay in tax refunds is also one of the reasons why businesses are experiencing difficulties. Due to the delay in tax refunds, many businesses do not dare to accept orders even though they do not have sufficient funds. Consequently, numerous businesses have been forced to withdraw from the market or cease operations.
Many businesses have agreed to restructure, invest in modernizing equipment, and prioritize the production of products with a higher added value to survive the challenging economic climate. Additionally, Ngo Sy Hoai noted that investing in unique designs and innovative products is a necessary strategy for staying in a competitive market.
However, diversifying markets presents obstacles. Each need necessitates custom-tailored products, necessitating businesses' ability to quickly adapt.
The report from the Department of Forestry illustrates the challenges facing Vietnam's forestry industry. Despite efforts to improve and adapt, achieving the annual export target of 17 billion USD is a difficult task. Supportive policies, modifications to administrative procedures, and an emphasis on innovation will play a crucial role in assisting the forestry industry to overcome this challenging period and develop sustainably in the future.
PV (t/h)
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