Binh Dinh province's wood industry with challenges at the beginning of 2022

The wood industry bears more costs

Due to the impact of the Covid-19 epidemic, the export wood processing industry of Binh Dinh province in 2021 will face unprecedented difficulties. However, thanks to many flexible solutions to adapt, soon stabilize production and seize market opportunities, Binh Dinh province's wood industry has had the highest growth rate in recent years.

By the end of 2021, Binh Dinh province's wood industry achieved an export turnover of US$ 890 million, up 36% over the same period in 2020, accounting for about 68% of the province's total export value. In which garden furniture and outdoor furniture reached US$ 472 million, up 45%; woodchips and pellets reached US$ 213 million; knitting plastic products, rattan imitation products reached US$ 205.1 million, up 78%.

Binh Dinh wood industry and supporting industries have created jobs for nearly 30,000 local workers. According to Mr. Le Minh Thien, Chairman of Binh Dinh Timber and Forest Products Association (FPA Binh Dinh), to achieve this result, there is a significant contribution of "leading" enterprises in Binh Dinh province's wood industry such as Phu Tai, Tien Dat, Dai Thanh, Hoang Hung, Duc Toan, Thien Phat, Phu Tai Bioenergy, Duc Hai companies... and more than 110 members of FPA Binh Dinh.

2021 is a turbulent year. After the first wave of the Covid-19 epidemic, Binh Dinh wood enterprises received many orders. Still, they encountered many difficulties such as wood materials, damaged accessories, shortage, and price spike, while the price of woodchips and pellets dropped sharply. One of the most significant difficulties in 2021, which is forecasted to last until the end of the first quarter of 2022, is the shortage of shipping vessels, the lack of containers, and the rising cost of sea freight leading to supply chain disruptions of inputs and outputs.

"Wood materials imported from main supplying countries are currently facing many difficulties, lack of supply or supply chain disruption, pushing up raw material prices, greatly affecting the receipt of new season orders. Currently, wood industry enterprises in Binh Dinh province have to spend an additional US$ 25-32 to import South American eucalyptus wood. Plywood that used to cost only US$ 380-400 has now increased above US$ 500 per m3. Groups of materials and accessories such as screws, pads, sliders, chemicals, and packaging have both increased in price and are in short supply," said Mr. Le Minh Thien.

In addition, the price of wood materials planted in domestic forests was also dragged up by about 5%; the supply of iron, steel, aluminum, materials and accessories, chemicals, and packaging from the southern provinces that were severely affected by the Covid-19 epidemic, both increased prices and slowed delivery, leading to businesses wood industry in Binh Dinh bears more costs and instability in the plan to receive orders, in production activities.

Strive to hit a new record

Expected to face many challenges in 2022, however, Binh Dinh FPA is still optimistic about breaking the record of export turnover in 2021.

According to Mr. Le Minh Thien, Chairman of Binh Dinh FPA, in 2022, Binh Dinh wood industry will strive to achieve an export turnover of about US$ 1 billion, an increase of 8-10% compared to 2021 and accounting for about 69% of Binh Dinh province's total export value.

"In particular, Binh Dinh wood industry will focus on implementing the wood industry development goals in the direction of increasing added value and sustainable development of the brand "Binh Dinh Furniture," contributing to achieving the goal of The export turnover of the wood industry of the whole country is about US$ 16.5 billion in 2022, "said Mr. Thien.

To achieve the above results, from the beginning of 2022, Binh Dinh wood industry continues to implement the prevention and control of the Covid-19 epidemic under the motto "adaptation, safety, flexibility, effectively control, and assurance production and business activities."

In addition, Binh Dinh FPA will closely follow the market to research, analyze, and evaluate the situation to propose solutions to remove obstacles and difficulties for businesses proactively. Through cooperation channels with friend associations, domestic and international organizations, especially with the Forest Protection Department (MARD), the Department of Agriculture and Rural Development, the Binh Duong Forest Protection Department, and Customs. Planning to implement Decree 102/2020/ND-CP of the Government stipulating the Vietnam Legal Timber Assurance System; effectively implement the timber industry classification system in combination with the online accountability system for timber origin of FPA Binh Dinh funded by the FAO-EU FLEGT Program.

"In 2022, we will expand our activities to implement the development strategy of Binh Dinh to become one of the centers for manufacturing kitchen cabinets, bathroom cabinets, and decorative boards with pioneering businesses such as Tien Dat, Dai Thanh, Thang Loi Phu Tai, Thien Phat to supply the US and UK markets; closely monitor risks related to investment and trade policies from free trade and investment agreements such as CPTPP, EVFTA, RCEP…", Chairman of Binh Dinh FPA Le Minh Thien expressed.

"The province highly appreciates the efforts of the wood industry to overcome difficulties to make a significant contribution to the socio-economic development of Binh Dinh province. Leaders of Binh Dinh province and departments and branches continue to accompany the wood industry in their province to solve difficulties and problems; invest in expanding production and business establishments; Also, it is proposed that Binh Dinh FPA continue to make efforts to effectively achieve activities to enhance the brand name "Binh Dinh Furniture," in addition to export products, it is also necessary to pay more attention to consumption in the domestic market.

In the coming time, Binh Dinh FPA and wood industry enterprises need to coordinate well with the Vietnam Timber and Forest Products Association and the Ministry of Agriculture and Rural Development to advise and implement solutions to prevent illegal investment-related on the origin of goods of the wood industry in Binh Dinh province and other markets", emphasized Mr. Nguyen Phi Long, Chairman of Binh Dinh Provincial People's Committee.