VietNamNet Bridge – If Vietnamese wooden furniture enterprises join forces with each other to develop in groups, they will be able to settle the current problems, including the scarcity of materials and the labor shortage.

Speaking at the ceremony for signing the cooperation agreement between the Handicraft And Wood Industry Association (HAWA) and a United Nations Industrial Development Organization’s (UNIDO) project on improving the competitiveness for wooden furniture enterprises in HCM City, Nguyen Chien Thang, HAWA’s Chair said that the biggest headache for Vietnamese wooden furniture enterprises wasnot the lack of orders, but the increasingly high prices of input materials.

According to Thang, the profit of wooden furniture producers will go down if they do not find technological solutions to improve their productivity. The labor has become both more expensive and scarcer, while the input production costs have been increasing due to the underdeveloped supporting industries, which means that most enterprises are still unable to control their raw material sources. “In such circumstances, enterprises will face big difficulties, if they continue to spread their investments as separate businesses,” Thang said.

Sharing the same view, Dien Quang Hiep, Director of Minh Phat 2 Company in Binh Duong province, said that in 2010, the price of rubber wood increased sharply as the result of the rubber latex price increase of 50 percent in comparison with 2009. October and November 2010 was the right time for farms to chop down old trees to get wood. However, as the rubber latex price increased too sharply, they stopped chopping down trees. This created shortage of rubber wood supply and pushed the prices up.

“Meanwhile, the US’ Lacey Act and the EU’s FLEGT (Forest Law Enforcement, Governance and Trade) which prohibit illegal wood trading have been taking effect. Now Vietnamese exporters must show FSC (Forest Stewardship Council) certificate to prove the legal origin of timber and COC. To date, only 200 Vietnamese enterprises have the certificates,” he said.

Francesco Russo, Chief Advisor of UNIDO, said that with the barriers such as the Lacey and FLEGT laws, Vietnam will not be able to compete with other countries, if Vietnamese enterprises do not unite

“Most Vietnamese enterprises now have their own sources of products which have been dispersed, while they cannot control the origins and the prices of input materials,” he said.

As Vietnamese enterprises do not cooperate with each other to develop in groups, they cannot control the quality, while the prices are controlled by the partners. This means they will not be able to fulfill big orders.

“just one enterprise that does not obey the laws will be enough to badly affect Vietnamese brand on the international market,” said Francesco Russo.

He went on to say that groups of enterprises are the networks of enterprises operating in the same fields, gathering in accordance with the geographical positions. In Bologne in Italia, enterprises only specialize in making kitchen’s interior products and their parts, therefore, the quality of their products is very high. This is the model that UNIDO plans to apply for Vietnamese small and medium enterprises.

Currently, there are only three wooden furniture processing complexes, namely HCM City – Binh Duong, Binh Dinh – Central Highlands and Hanoi – Bac Ninh. Under the signed agreement, UNIDO will cooperate with HAWA to define the capable groups of wooden furniture enterprises in the south in order to form more concentrated industrial complexes.

Deputy Chair of HAWA Tran Quoc Manh said that besides the cooperation, wooden furniture enterprises should strengthen their investment capacity and upgrade their technological capacity in order to increase the productivity and the products’ quality.

Source: Dau tu