VN wood industry facing losses due to COVID-19

 The wood industry was facing a ‘disaster’ with many businesses left without orders from now until 2021 due to the COVID-19 pandemic, said the Vietnam Timber and Forest Product Association (VTFPA).

VN wood industry facing losses due to COVID-19

Workers make timber products for export at Vu Thinh Company Ltd, in the northern province of Bac Giang.

VTFPA said that the US, EU, Japan, South Korea and China accounted for over 90 per cent of the country’s wood export market, and had all been strongly affected by COVID-19.

“Many Vietnamese wood processing enterprises have had orders cancelled of suspended,” said the association.

Since March, 80 per cent of exporters to the US and EU markets had received cancellations or delays until the situation improves. Orders from Japan, South Korea and China similarly dropped by 60-80 per cent.

“For the remaining orders and small orders, businesses are having difficulties as input prices have gone up by US$10-20 per cu.m, and freight costs have increased $500-1,000 per container,” the statement said.

General Director of Lam Viet Joint Stock Company Nguyen Liem said the basic principle of the economy was that supply was always equal to demand. However, the current demand was only for medicine and food, forcing many furniture stores to close in the EU and US – leading to the cancellation and suspension of orders.

“It’s predicted these difficulties will last for the next three-six months or even longer. Many businesses are focusing on minimising costs, including imports of raw materials and other factory expenses,” Liem said.

He said his company had to stop production on March 27.

“Currently, we have 150 containers of finished goods that we cannot ship. We will have to store them in warehouses. The damage is countless,” Liem said.

"Lam Viet's own losses in this coronavirus outbreak amounted to VND200 billion ($8.5 million), not to mention laying off 1,400 workers," he added.

 

According to Nguyen Phuong, director of Minh Thanh Co., Ltd, cancellations had been poring in over the last two weeks.

“To date, the number of cancelled orders is valued at about $3 million and the number of suspended orders would have been worth $2 million,” Phuong said.

He said his company’s export value to the US market was about $2.5 million prior the COVID-19 outbreak. After receiving cancellations or delays, the company had suspended production. "This means that about 800 workers are now unemployed."

VTFPA said Lam Viet and Minh Thanh were among the many wood processing and exporting firms suffering the damage of the COVID-19 pandemic.

Do Xuan Lap, chairman of VTFPA, said the wood processing industry, one of the country's three main export industries, was facing the reality that most enterprises would have to stop production this month and lay off workers without strong support from the Government.

In order to minimise these losses, VTFPA have asked the Government to include the wood processing industry on the list of products the Government says can extend tax payments and land rents.

VTFPA also said the Government should consider value added tax refunds for eligible exporters, and the exemption of export taxes. — VNS

Supply chain interrupted, VN woodwork processors go online

Supply chain interrupted, VN woodwork processors go online

E-commerce is one of the best solutions for woodwork enterprises to cope with the Covid-19 epidemic, which has led to a sharp fall in demand.

Wood product processors need to restructure production due to COVID-19

Wood product processors need to restructure production due to COVID-19

Local wood processing enterprises need to continue reorganising their production and business activities to deal with difficulties during the novel coronavirus pandemic, according to the Ministry of Agriculture and Rural Development.  

 
 

Other News

.
EC allows Vietnamese exporters to extend deadline of REX applications
EC allows Vietnamese exporters to extend deadline of REX applications
BUSINESSicon  26/07/2020 

The European Commission (EC) has given the green light for Vietnam’s exporters to extend the deadline of applying for the registered exporter system (REX) until late 2020, 

Southern Vietnamese real estate market: emergence of large M&A deals
Southern Vietnamese real estate market: emergence of large M&A deals
BUSINESSicon  26/07/2020 

The southern real estate market has witnessed a series of impressive mergers and acquisitions (M&A) deals. This trend is expected to be more vibrant in the near future. 

E-wallet providers ask to extend deadline of verification
E-wallet providers ask to extend deadline of verification
BUSINESSicon  26/07/2020 

 E-wallet service providers want to extend the deadline for users to complete identity verification.

Ministry launches PayGov to upgrade national public portal
Ministry launches PayGov to upgrade national public portal
BUSINESSicon  26/07/2020 

The Ministry of Information and Communications (MIC) launched a national payment support gateway (PayGov) yesterday in Ha Noi in the latest move to boost e-government in Vietnam.

Pandemic ravages household businesses and MSMEs: survey
Pandemic ravages household businesses and MSMEs: survey
BUSINESSicon  26/07/2020 

The COVID-19 pandemic has substantially reduced revenue for both household businesses (HBs) and micro, small and medium enterprises (MSMEs), 

Japanese firms choose Viet Nam for production expansion
Japanese firms choose Viet Nam for production expansion
BUSINESSicon  26/07/2020 

Fifteen Japanese firms chose Vietnam as the destination for their production expansion within the Japanese government’s programme to support Japanese firms to diversify their value chains in foreign countries, according to JETRO.

Vietnam Banks Association urges MIC to reduce telecommunication charges
Vietnam Banks Association urges MIC to reduce telecommunication charges
BUSINESSicon  26/07/2020 

The Vietnam Banks Association has just sent a dispatch to propose the Ministry of Information and Communications lower charges for banking services via SMS.

R&D spending key to join global supply chain: executives
R&D spending key to join global supply chain: executives
BUSINESSicon  25/07/2020 

Challenges will overwhelm opportunities for Vietnamese part suppliers if they are unable to find ways to upgrade technology and meet international production standards, business executives said on July 24.

Vietnam likely to export 6.7 million tonnes of rice this year
Vietnam likely to export 6.7 million tonnes of rice this year
BUSINESSicon  25/07/2020 

Vietnam is likely to reach its rice export target of 6.7 million tonnes this year thanks to favourable market conditions and high global demand, according to the Ministry of Agriculture and Rural Development.

Will technical barriers imposed by the Philippines create difficulties for Vietnam’s rice exports?
Will technical barriers imposed by the Philippines create difficulties for Vietnam’s rice exports?
BUSINESSicon  26/07/2020 

It will be difficult for Vietnamese businesses to keep stable rice exports to the Philippines in large quantities as currently seen, experts said.

VN Government urged to open economy to 17 partners
VN Government urged to open economy to 17 partners
BUSINESSicon  26/07/2020 

The 17 economies determine 90 percent of Vietnam’s foreign investment, 80 percent of international trade and 80 percent of foreign travelers to Vietnam.

VN textile and garment industry warned of big difficulties
VN textile and garment industry warned of big difficulties
BUSINESSicon  26/07/2020 

The Covid-19 epidemic which broke out six months ago has seriously affected textile and garment companies.

Ministries disagree on legalizing condotels as houses
Ministries disagree on legalizing condotels as houses
BUSINESSicon  26/07/2020 

The Ministry of Public Security (MPS) does not want condotels converted into houses and does not want to grant ‘red books’ (land-use right certificates) to all apartments.

Local retailers closing shops because of Covid-19
Local retailers closing shops because of Covid-19
BUSINESSicon  25/07/2020 

Many retailers have had to close shops and give back retail premises to landlords because of poor patronage and a dramatic drop in sales.

Standard Chartered Bank forecasts Vietnam’s 2020 growth at 3 percent
Standard Chartered Bank forecasts Vietnam’s 2020 growth at 3 percent
BUSINESSicon  24/07/2020 

Standard Chartered Bank expects Vietnam’s growth to slow to a multi-year low of 3 percent this year on soft external demand, with external headwinds set to offset domestic outperformance.

HCM City sets growth target of 5 percent for 2020
HCM City sets growth target of 5 percent for 2020
BUSINESSicon  24/07/2020 

The chairman of HCM City People’s Committee has urged agencies to develop solutions to support enterprises and local residents affected by the COVID-19 pandemic as part of its effort to revive business activities

Officials urge hastened issuance of legal documents to implement FTAs
Officials urge hastened issuance of legal documents to implement FTAs
BUSINESSicon  24/07/2020 

Vietnam must hasten the process of issuing legal documents and institutional reform to implement free trade agreements (FTAs) and take advantage of these trade deals to boost exports, officials have said.

Vietnamese firms increase overseas investment
Vietnamese firms increase overseas investment
BUSINESSicon  24/07/2020 

Vietnamese firms have been increasing their overseas investments in recent years in an effort to expand their global reach.

Economic recovery faces uphill battle
Economic recovery faces uphill battle
BUSINESSicon  24/07/2020 

The aftermath of the global health crisis may drive Vietnam to a lower-than-expected economic growth landscape, challenging the government’s efforts to revive the economy and restore production.

Vietnam's oil sector open on back of new eased FOL cap
Vietnam's oil sector open on back of new eased FOL cap
BUSINESSicon  24/07/2020 

Even if the latest proposal for international investors to be able to own up to 35 per cent of Vietnamese oil firms comes true, it may still not be smooth sailing for foreign groups to step up in the market.

 
 
 
Leave your comment on an article

OR QUICK LOGIN