KUCHING: Vietnam, a major importer of Sarawak logs and timber products, has a blossoming downstream processing industry.
Vietnam has been rapidly expanding its processing sector by increasing its imports of primary wood products, especially hardwoods, from over 100 countries.
In 2018, Vietnam’s wood processing industry imported roundwood equivalent to nearly 10 million cubic metres that provided about 25 percent of the total input required by the domestic industries, according to International Tropical Timber Organisation (Itto) in its latest tropical timber report (June 16-30, 2019).
As stated in a media report, Vietnam’s wood processing industry, is known for producing and exporting of high-end wood products, particularly furniture.
Malaysia was the top among three major suppliers of tropical timber to Vietnam during the January-April period 2019.
Vietnam’s General Department of Customs data has shown that the country imported about US$23.34 million worth of timber from Malaysia in the first four months of this year (down by 15 percent from Jan-April 2018) while imports from Cambodia was worth US$21.71 million (-62 percent) during the same period. Imports from Laos were valued at US$16.18 million, which soared by 75 percent.
“The Vietnamese timber sector is facing a serious shortage of logs and sawn wood due first to the domestic logging ban and secondly to the various restrictions and regulations on raw material exports in many nearby Asian supply countries, such as Laos, Cambodia and Myanmar which were once major suppliers of tropical timber for Vietnam.
“Over the past few years, there has been a rise in raw material imports from the US, EU (European Union) and some African countries but the Vietnamese industries complained the CIF (cost, insurance and freight) prices are very high and there are high logistics costs and that this is threatening the competitiveness and productivity of the Vietnamese companies in international markets.
“The industry is now relying more heavily on domestic plantation resources for both exports and for domestic sales,” said Itto.
“The EU-Vietnam VPA/FLEGT (voluntary partnership agreement/forest law enforcement, governance and trade) is to be implemented soon, according to analysts who say this is expected to generate many export opportunities for domestic manufacturers.
“However, (the) implementation will challenge the sourcing of wood raw materials as Vietnam still depends on imports
from so-called ‘high-risk’ countries in terms of verification of legality.
“Most of Vietnam-made finished wood products are exported to developed markets, such as the USA, EU, Japan and South Korea, and so must meet the legal and technical requirements in these countries.
“This can be achieved by utilising domestic plantation material, such as acacia, eucalyptus and rubberwood, and importing certified legal timber raw materials,” it added.
The Itto said the implementation of Vietnam VPA would also impact imports of high-value precious timber species used mainly for domestic consumption and imported from countries with weak forest management and law enforcement.
Besides logs, Vietnam is the No 1 buyer of particle board worth RM2.85 million (FOB) from Sarawak in the first five months 2019, export figures from Sarawak Timber Industry Development Corporation (STIDC) showed.
Vietnam is the second top importer of Sarawak’s laminated board/floor worth RM2.78 million (FOB) during January-May 2019 period. The country also imported plywood valued at RM5.57 million, fibreboard (RM4.2 million) and moulding (RM55,321) from Sarawak during the period under review.