Mr. Nguyen Chanh Phuong, Vice Chairman of Ho Chi Minh City Handicraft and Woodworking Association, said that in the last 2 months of the year, wood exports usually have positive results and can reach $1.2 billion per month. Growth in early 2022 will not be high but from June onwards, exports will be better.
Talking to PV, Mr. Nguyen Chanh Phuong, Vice Chairman of Ho Chi Minh City Fine Arts and Woodworking Association (HAWA) gave a perspective on the wood industry in the last months of the year, in 2022.
How has the wood industry experienced the 4th wave of Covid-19?
– The wood industry here includes both export and domestic. Regarding exports, in the first 6 months of the year, the turnover increased by 67.4% over the same period last year. In the following months, exports decreased, reaching only about half of the period before the 4th Covid-19 wave.
Since the beginning of October, production has recovered. 95% of businesses are already operating. About 70-75% of workers have gone to work. With well-prepared businesses, up to 95% of employees have returned to work.
The big problem of the current industry is input costs. In particular, the price of raw materials is very high. Domestic prices have only increased by about 15% since the beginning of the year, but import prices have increased very high. Besides, paint prices also escalated due to the impact of the oil market. Since the beginning of October, the price of this item has increased by 15%. Packaging prices are also higher than usual.
Regarding the domestic market, the interior decoration segment has recovered significantly. However, the interior for construction, the project is still slow. But in terms of decorative furniture, the demand is good because many people work from home and want to renovate their houses.
– In your opinion, is the export target of 14.5 billion USD a far-fetched thing?
– According to the General Department of Forestry (Ministry of Agriculture and Rural Development), accumulated in the first 10 months of the year, the export value of wood and wood products was 12.08 billion USD, up 23.4% compared to the previous year. in the same period last year.
The last two months of the year usually have positive results and can reach $1.2 billion per month. Therefore, the target of 14.5 billion USD for the wood industry this year is completely reasonable.
There are still many awakenings
– What are the barriers of the wood industry from now until the end of the year, sir?
– The first barrier, in my opinion, is the input materials. The high price of raw materials makes businesses only dare to sign short-term orders even though long-term orders are many. Besides, they have to calculate very carefully the input costs.
Second, from now until the end of the year, businesses must calculate how to maintain a relative workforce. If one person is missing, the synchronization will be lost, affecting the production line.
I think, after Tet, the wood industry’s human resources will return to the level before the 4th Covid-19 wave. And assuming, early next year, there is a shortage of workers, then the problem will not be too important because businesses will look to mechanization to compensate.
Third, freight rates are also challenging. Freight rates have increased in recent times and customers will tend to choose closer orders. The main markets of Vietnam’s wood industry are Europe and the US.
Of course, transferring orders is not easy, or in other countries they can’t build a close supply chain, they have to place it far away. If customers want to ship orders, they also need time. But if the logistics is not stable for a long time, the above risk will be high and Vietnam needs to calculate to compete with Poland and Mexico in the long run.
Fourth, the US-China relationship is also a problem. China’s wood exports are no longer as strong as before because they are subject to tax rates from the UK and the US. But if one day they get a tax reduction, China’s competition will increase even more.
– Lack of labor is a common problem of enterprises of not only the wood industry. In your opinion, what policies should be in place to invite workers back and retain them?
– Regarding human resources, I think the wood industry is lacking but not to 30%. Due to Covid-19, many people in the southern region returned to their hometowns, but in some western provinces, wood, rattan and bamboo factories are operating. I think the industry will not lose too much labor because the workers for the wood industry have certain skills and the income is quite good.
– How to ensure input materials in the current context, sir?
– In my opinion, in the short term, businesses can find inventory shipments of facilities that are having financial problems and increase control over purchases.
In the long-term, Vietnam imports about 30% of raw wood materials from the US, Europe, Brazil…. If they want to buy at low prices, Vietnamese businesses must buy together, have a plan to use them together to get goods with them. bulk. Thus, the price will be cheaper.
If you want to buy in bulk, you must ensure that you buy together and have available financial resources.
– With 2022, how do you assess the prospects of the wood industry?
– I think, in the beginning of 2022, the market will still be quiet because there is no fair and trade promotion. Growth at the beginning of the year will not be high but from June onwards, I believe, exports will be better.
The General Department of Forestry predicts that export turnover next year will be at USD 15.5 billion. But I believe the number will be higher.
Thank you Sir!