Vietnamese wood products manufacturers face cancellation and delays from U.S. and EU buyers
As much as 80 per cent of timber buyers from the U.S. and EU have delayed or cancelled their orders as of March 30 due to new coronavirus, reported VN Express.
The cancellation and delay rate from South Korea and Japan buyers is an estimated 60 to 80 per cent. This can potentially wreck severe damage to Vietnam’s timber industry this year, the Association of Vietnam Timber and Forest Product (Viforest) said.
Vu Hai Bang, CEO of Woodsland, one of the largest timber exporters in the country, said that within two weeks, many buyers in the U.S. and E.U. had cancelled their orders, and he would have to wait another seven weeks for orders to hopefully reboot.
Nguyen Duc Kien, deputy director of Kego Co. Ltd., which exports plywood to South Korea and Japan, said the company now exports five containers a month, compared to 50 before the pandemic. There is no new orders placed for May onwards.
In a survey of 124 wood exporters conducted by VIFORES, more than half of them have to scale down their business due to the pandemic.
Most businesses will have to stop operations by the end of April
Most businesses will have to stop operations by the end of this month, the association said.
Firms estimate a total damage of at least VND3 trillion (US$128 million) due to the cancelled or delayed orders.
Respondents said over 21,400 employees are already temporary out of work, and VIFORES estimates that hundreds of thousands in the industry may become unemployed as wood craft villages across Vietnam employ over 350,000 people.
Cancelled orders are also putting more pressure on finances. Bang said Woodlands will struggle to pay its debts from April to June.
Timber exporters allowed to delay tax payment and land rental by five months
Deputy Minister of Agriculture and Rural Development Ha Cong Tuan said timber exporters are allowed to delay their tax payment and land use fees by five months according to government policy.