Wood processing firms hit hard by COVID-19 crisis

Vietnamese wood processing firms have reduced production or suspended operations as most of the major importing countries for their products face hardships because of the COVID-19 pandemic.

At a wood processing factory in Dong Nai. The wood processing industry has encountered difficulties due to the impact of the Covid-19 pandemic. — Photo Dong Nai newspaper

A new study conducted by the Viet Nam Timber and Forest Product Association, the Handicraft and Wood Industry Association of HCM City, the Binh Duong Furniture Association, the Forest Products Association of Binh Dinh, and Forest Trends pointed out the negative impact of Covid-19 on production and trading of wooden products.

The report said that 76 per cent out of 124 polled Vietnamese firms in the wood processing sector reported total initial damage of VND 3.066 trillion (US$129.86 million) due to the Covid-19 pandemic, with most firms reducing production scale and some of them stopping operation.

About 24 per cent of enterprises had not yet calculated their losses.

In addition, over half (51 per cent) of surveyed firms said they had to shrink their production scale due to the pandemic, while 35 per cent were operating normally but will have to suspend production in the near future.

Seven per cent have ceased operations, and only seven per cent of them were still operating normally as of the end of March.

According to wood processing firms, the US and EU markets account for about 50 per cent and 10 per cent of Viet Nam’s total wooden product exports, respectively. But since mid-March, these markets have been seriously affected by the pandemic.

To reduce the spread of COVID-19, the Governments of these countries are applying strong policies such as border closures and closing all non-essential stores. This has led to serious disruptions in the global supply chain, with many commercial transactions delayed or cancelled, they said.

Since mid-March, many Vietnamese firms have received notices from the US and the EU to delay or stop delivery, even for products that were already produced or are in the production process, according to the survey.

Many importers have cut their orders, delayed payments, or cancelled orders.

Some Vietnamese firms have also received notices that their large customers are on the verge of bankruptcy.

 

The wood processing industry is an export-driven sector, so the current pandemic situation has seriously affected exports, analysts said.

Stagnant production has also led to a significant reduction in the size of the labour force.

According to the survey, 105 enterprises who provided labour information to the survey had a total of 47,506 employees before the COVID-19 outbreak, but 21,410 of that number have stopped working.

Due to the large number of unemployed workers, businesses have asked the Government to offer financial support to help labourers who have lost their jobs.

In addition, some enterprises have also petitioned the Government to suspend the payment of value-added tax on imported input goods.

The Government should put in place mechanisms and policies to support businesses to help restore production and export when the pandemic is contained in the near future.

According to Vietnam Customs, Viet Nam’s wood and wooden exports reached $1.6 billion in the first two months of the year, a year-on-year increase of 18 per cent.

However, with the outbreak of COVID-19 occurring in Viet Nam’s key export markets, the sector’s export turnover is expected to decrease sharply in the coming time. — VNS

VN wood industry facing losses due to COVID-19

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).  

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

.
Thai firm buys two wind power farms in Vietnam
Thai firm buys two wind power farms in Vietnam
BUSINESSicon  07/07/2020 

The move aims to take advantage of low interest rates to build projects with a quick return on investment.

FIEs displeased with government demand to license internal websites
FIEs displeased with government demand to license internal websites
BUSINESSicon  07/07/2020 

The new regulations of the MIC may affect the policies and assets of private businesses and foreign-invested enterprises in Vietnam.

New investment wave starts despite COVID-19
New investment wave starts despite COVID-19
BUSINESSicon  07/07/2020 

The new wave of foreign investment triggered by COVID-19 and US-China trade tensions is becoming more visible as outstanding overseas ventures are expanded.

Stronger money policies might be considered to aid economic growth: SBV
Stronger money policies might be considered to aid economic growth: SBV
BUSINESSicon  07/07/2020 

The State Bank of Vietnam could increase credit growth limits for credit institutions this year or even launch stronger monetary policies to aid the country’s post-pandemic growth, Governor Le Minh Hung has said.

Guiding decrees needed to fight with transfer pricing in Vietnam
Guiding decrees needed to fight with transfer pricing in Vietnam
BUSINESSicon  07/07/2020 

Anti-transfer pricing measures were included in the Law on Tax Administration for the first time, but a guiding decree has not yet been written. Experts said this could mean the rules are less effective.

VN corporate bond market to boom in second half
VN corporate bond market to boom in second half
BUSINESSicon  07/07/2020 

Companies are looking to raise debts from bond issuance before the amended Law on Securities takes effect next January.

Moving from former adversaries to trusting and valued partners
Moving from former adversaries to trusting and valued partners
BUSINESSicon  07/07/2020 

Through candid dialogue, mutual respect, and a strong commitment to succeed by the leadership of both countries, Vietnam and the United States created a comprehensive partnership that identifies areas for both countries to work together.

EVFTA expected to give a lift to real estate sector
EVFTA expected to give a lift to real estate sector
BUSINESSicon  06/07/2020 

Many segments of the real estate market are soon expected to benefit from the EU-Vietnam Free Trade Agreement, which takes effect in August.

Whether Apple to build nest in Vietnam?
Whether Apple to build nest in Vietnam?
BUSINESSicon  07/07/2020 

Foxconn’s rush expansion in Vietnam raise nosy that whether Apple will choose the country as the place to build nest.

American groups make progress across Vietnam
American groups make progress across Vietnam
BUSINESSicon  06/07/2020 

Vietnam, as one of the fastest-growing economies in the ASEAN bloc, is becoming more appealing to American investors.

A dynamic and powerful ASEAN from the German perspective
A dynamic and powerful ASEAN from the German perspective
BUSINESSicon  06/07/2020 

Possessing key features that represent a snapshot of one of the most diverse, fastest-growing, and competitive regions, the ASEAN is an attractive economic region for not only German enterprises but also other European ones to invest in. 

Delving into specifics of amended business laws
Delving into specifics of amended business laws
BUSINESSicon  06/07/2020 

Businesses and investors are expected to access new positive changes when the amended Law on Investment and the amended Law on Enterprises take effect from January 1 next year.

Rays of sunshine in aviation clouds
Rays of sunshine in aviation clouds
BUSINESSicon  06/07/2020 

Amid serious impacts of COVID-19, there are hopeful points for the aviation sector on the back of the EU-Vietnam Free Trade Agreement.

Trade kickstart with distinctive solutions
Trade kickstart with distinctive solutions
BUSINESSicon  06/07/2020 

Vietnam is boosting its diplomatic activities in hope of attracting more investment and expanding its trade in the global market, with many of the country’s major partners about to open their doors to the world again.

EuroCham proposes Gov’t to cut 50 per cent of registration fee for imported cars
EuroCham proposes Gov’t to cut 50 per cent of registration fee for imported cars
BUSINESSicon  06/07/2020 

The European Chamber of Commerce in Vietnam (EuroCham) proposed the Government to apply the 50 percent registration fee reduction to all automotive assembly firms, importers and dealers of new vehicles.

Shares to correct amid lack of positive news
Shares to correct amid lack of positive news
BUSINESSicon  06/07/2020 

The benchmark VN-Index on the Ho Ch Minh Stock Exchange (HoSE) gained 0.62 per cent to close Friday at 847.61 points.

P2P firms in Vietnam waiting for a sandbox
P2P firms in Vietnam waiting for a sandbox
BUSINESSicon  06/07/2020 

Peer-to-peer (P2P) lending companies expect that the sandbox for fintech would eliminate unscrupulous businesses and help the market grow significantly.

Business outlook gloomy for firms based in Old Quarter of Hanoi
Business outlook gloomy for firms based in Old Quarter of Hanoi
BUSINESSicon  06/07/2020 

Many business owners in Hanoi’s famous Old Quarter are becoming increasingly concerned about the decline in customers, causing their revenue to sharply decrease, and resulting in many stores closing their doors following COVID-19 epidemic.

Auto dealers deemed main beneficiaries of registration fee cut
Auto dealers deemed main beneficiaries of registration fee cut
BUSINESSicon  05/07/2020 

Auto dealers have proved to be the biggest beneficiaries of the Government's move to introduce a 50% cut in car registration fees, and not car buyers, as expected, 

Nine more expressway contractors suspected of construction violations
Nine more expressway contractors suspected of construction violations
BUSINESSicon  05/07/2020 

Nine more former contractors have been accused of irregularities in the construction of a 139-kilometer-long expressway whose severe deteriotion was reported shortly after its opening in central Vietnam.

 
 
 
Leave your comment on an article

OR QUICK LOGIN