49 new FDI projects in Vietnam’s wood industry in first five months of 2019

In the first five months of 2019, there were 49 new projects investing in the wood industry, of which 32 were from the wood processing sector, equivalent to 73 per cent of total FDI projects investing in the sector last year, mentioned Nguyễn Quốc Khanh, chairman of Handicrafts and Wood Industry Association of HCM City (HAWA).

The foreign investment capital in the country was nearly 1.2 times higher than last year’s total FDI capital flowing into the country, according to the Foreign Investment Agency, he said.

According to HAWA, Vietnam’s import of wood processing machinery and equipment increased from US$220 million in 2017 to $280 million last year. The figure is expected to rise by 25 per cent this year.

The country’s wood product export revenue was $9 billion from last year and is targeted to reach $11 billion this year.

Nguyen was one of the VIPs at the “Rethinking Wood Processing Models” seminar held in Ho Chi Minh City’s Saigon Exhibition and Convention Centre in September.

This figure showed the reality of competition in the very near future. If enterprises stopped at their current capability levels, they would fail in the competition ahead, he said.

Challenges ahead

Vietnamese wood processing enterprises, on the one hand, had to solve internal problems to ensure product quality and meet existing orders, while increasing productivity and innovation to be able to retain existing customers and get new ones. On the other hand, they must be flexible and increase their competitive advantages to stand firm and be in front for future changes, he said.

Nguyễn Chánh Phương, deputy chairman of the Handicrafts and Wood Industry Association of HCM City (HAWA), said the wood processing industry faced four challenges, including fierce competition in the market due to an increasing number of FDI enterprises and a rapid and large shift of foreign investors coming to Vietnam, resulting in a shortage of labourers.

In addition, it is facing low labour productivity as well as still adjusting from the impact of digitalisation in the industry’ s processing, administration, design and trade.

Organised by HAWA and Yorkers Trade and Marketing Services Co, the “Rethinking Wood Processing Models” seminar was a pre-event of the 13th International Woodworking Industry Fair (Vietnam Wood).