Binh Duong is considered the center of Vietnam’s wood product processing and export industry. In order to stand firm and expand the export market, the wood industry of Binh Duong has been promoting investment in production technology innovation and export capacity.
Advantages and challenges intertwined
In 2019, The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Voluntary Partnership Agreement on the Implementation of Forest Law, Forest Governance and Forest Trade (VPA / FLEGT) between Vietnam and European Union (EU) takes effect. When participating in CPTPP, Vietnam’s wood industry has the opportunity to further penetrate into member countries’ markets when the import and export tax is 0%. This is a favorable condition for Vietnamese wood enterprises in general and Binh Duong in particular to have more opportunities to develop and improve their competitiveness.
Another advantage for timber export enterprises is when US trade tension – China is escalating. President Donald Trump’s administration began to raise taxes from 10% to 25% with 200 billion USD of Chinese goods from May 10, 2019. Earlier, in the list of Chinese goods, it is expected to be subject to additional import duties on wood and furniture. Thus, if Chinese goods are taxed, US importers will likely find other sources, including Vietnam. This is a great opportunity for Vietnamese enterprises to boost the export of wood and wood products to the US market in the near future.
However, according to industry experts, this opportunity comes with many challenges for domestic timber enterprises. “The big challenge facing the wood industry is that the flow of investment into the wood industry from China to Vietnam increase sharply will make Vietnam’s wood products may have to be control of the American trade Agency when exporting to this market in the near future. Besides, when capital flows into the Vietnamese market, the competitiveness of the price of finished wood products will be fiercer.”, said Mr. Le Van Minh, Vice President of BIFA.
Invest in technology innovation to increase competitiveness
The international market is wide open, in order to seize this opportunity, Binh Duong timber enterprises are changing management thinking according to the professional model, investing in technology to improve labor productivity, to enhance the capacity competition.
According to Ms. Duong Thi Tu Trinh, Director of Thong Nguyen Wood Processing Company (Binh Duong), in order to stand firm and expand the export market, the company boldly invested in modern production technology and machinery in accordance with international standards. The investment in this technology will help the company improve labor productivity, minimize manual labor… thereby creating more structured products, new designs, meet the needs and demands of the market more and more difficult, especially for high quality goods and art products.
Thus, businesses need to invest more in design as well as retrofit technology to increase competitive advantage, to meet the increasing demand of the market. “Investment in technology and management innovation is now a vital trend for Vietnam’s wood industry enterprises in general and Binh Duong in particular. In addition, businesses need to focus on improving the role and responsibility of employees, better care of the lives of workers so that they can stick with businesses for a long time”- Deputy Chairman of BIFA emphasized.