return icon Vietnamnet.vn

Domestic sector loses forestry market to foreigners

The domestic sector has lost the local and export forestry markets to the foreign sector, Huynh Van Hanh, general director of the Handicraft and Wood Industry Association of Ho Chi Minh City has said.
The domestic sector has lost the local and export forestry markets to the foreign sector, Huynh Van Hanh, general director of the Handicraft and Wood Industry Association of Ho Chi Minh City has said.

{keywords}

As a result, foreign sector companies from Malaysia, China, Taiwan and Thailand have swooped in and taken control of production in Vietnam and now have at least a 60% market share of all local and export sales.

Hanh noted that compounding the problem is the fact that many Chinese set up ‘straw companies’ in Vietnam hiring a local person to act as the owner on behalf of the true Chinese owners.

So it’s a sure bet the foreign sector actually controls much more of production than what is in the public record and a much larger market share than 60% of revenue, he emphasized.

There are three main forest industry segments in the local Vietnam market, said Hanh. 

The forestry and logging segment harvests timber, including felling and hauling it to the mills, while the pulp and paper manufacturing segment produces everything from newsprint and writing paper products to facial tissues.

Lastly, the solid wood product manufacturing segment produces items such as outdoor and indoor furniture, handicrafts, decorations and accessories.

Other nations, said Hanh, generally have had the upper hand when it came to investing in research and development and adopting the latest technologies, something domestic sector companies had never been committed or able to too.

They should not only have invested more in these areas but should have had more public investment in colleges and universities as well to fund market research, which left them largely out of touch with understanding customer needs and preferences.

Another contributing factor is that the forest industry’s profitability track record has been poor. The domestic sector failed to invest in developing employees’ expertise and skills to increase worker productivity.

In the seven months leading up to August of 2016, total revenues for the forest industry jumped 0.8% on-year to US$3.8 billion, according to official statistics, said Hanh, with in excess of 60% of the revenues going to the foreign sector.

Nguyen Ton Quyen, vice president of the Vietnam Timber and Forest Product Association, has said he believes that the foreign sector controls at least an 80% market share of the local and export forestry market.

Domestic sector companies just aren’t in any position to compete and they woefully have lacked in investment in research and development, marketing, and establishing a distribution network.

Quyen pointed to the fact that 93% of Vietnamese companies in the domestic sector are smallholders and lack adequate funds or access to funds to invest in modern equipment and the like.

To address the situation, the Ministry of Agriculture and Rural Development is working on a legislation that will support these smallholders by providing financing for such things as developing domestic distribution networks and marketing to boost competitiveness.

VOV

MORE NEWS

Central bank not tighten real estate credit: Deputy Governor

The State Bank of Vietnam (SBV) has never issued any documents or statements ordering credit for real estate be tightened, Deputy Governor Dao Minh Tu said on February 8.

Vietnamese Prime Minister starts official visit to Singapore

Prime Minister Pham Minh Chinh, his spouse, and a high-ranking Vietnamese delegation arrived in Changi Airport on February 8 afternoon, starting a three-day official visit to Singapore.

Businesses discuss ways to overcome challenges in 2023

Warned that uncertainties will still exist in 2023, businesses need to prepare well to weather the storm.

Vietnam's bond market remains quiet this year

The scale of debt in the corporate bond market is less than 15 per cent of GDP.

Organ trafficking in Vietnam driven by high demand, low rate of donation: experts

A conference on organ donation registration and the prevention of human organ and tissue trafficking was held on Monday.

VCCI proposes allowing businesses to set fuel retail prices

The Vietnam Chamber of Commerce and Industry (VCCI) has written to the Government suggesting fuel retail prices be decided by businesses based on supply and demand to prevent fuel shortages.

VIETNAM NEWS HEADLINES FEBRUARY 8/2023

Vietnam puts children at centre of development policies, strategies: Ambassador

Gov’t issues action plan to realize Hanoi’s development vision until 2045

The Government has issued an action plan to realize Politburo’s resolution on the objectives for Hanoi’s development until 2030, with a vision to 2045.

Commercial sidewalk use may be charged by HCMC authorities

HCMC is planning to allow the paid use of sidewalks for commercial purposes such as vending goods or parking if these business activities leave a space of at least 1.5 meters wide for pedestrians.

CAAV advises caution when buying air tickets

The Civil Aviation Authority of Viet Nam (CAAV) has received feedback on the fact that passengers have to buy air tickets higher than the specified prices on domestic routes, especially during the peak of the Lunar New Year (Tet).

Prime Minister leaves Hanoi for official visits to Singapore, Brunei

Prime Minister Pham Minh Chinh, his spouse and a high-ranking delegation of Vietnam left Hanoi at noon on February 8 for official visits to Singapore and Brunei from February 8-11.

US war veteran wishing to return wartime diary to Vietnamese family

Pater Mathews, a US war veteran, has emailed relevant agencies of Ha Tinh province, central Vietnam, expressing his desire to fly to Vietnam and return a Vietnamese martyr’s diary he came across decades ago to the martyr’s family.

VIETNAM BUSINESS NEWS FEBRUARY 8/2023

January payment transactions via national public service portal valued at 11.8 mln USD

Vietnam needs new products, services to reach tourism targets

To realise the targets of attracting 110 million tourists and earning some 650 trillion VND (27.5 billion USD) in revenue this year, Vietnam is recommended to develop more products and services to offer new experiences to visitors.

PM Chinh’s Singapore visit expected to advance bilateral trade ties

Prime Minister Pham Minh Chinh’s Singapore visit from February 8-10 aims to affirm the determination to elevate the bilateral economic ties to a new height in the context of many free trade agreement (FTAs) coming into force.
back_to_top