The wood processing industry is recovering thanks to post-pandemic production

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HANOI (Vietnam News / Asia News Network): The wood processing industry has experienced a resumption of production after the fourth outbreak of Covid-19, thanks to supportive government policies.

To support economic recovery, the National Assembly and the government have issued numerous policies to help businesses and enterprises resume production and business activities.

These policies have included delaying tax payments, reducing corporate income tax; lower loan interest rates and financial support for employees. These actions have created a favorable business environment for companies producing, processing and exporting timber.

The long-awaited government resolution No. 128, on adopting provisional guidelines on a safe and flexible life with COVID-19, has supported the national economy in the recovery.

The timber processing industry has developed specific strategies and plans to restore production and business to the new normal, according to the Ministry of Agriculture and Rural Development.

Lê Quốc Doanh, deputy minister of agriculture and rural development, said the ministry continues to receive recommendations from companies and associations in the wood processing industry to resolve the difficulties of processing and development. export of wood and wood products.

According to Đỗ Xuân Lập, president of the Việt Nam Timber and Forest Products Association (VIFORES), the Covid-19 epidemic has affected trade in goods, including timber and wood products. It also affected wood processing centers such as HCM City, Bình Dương, Đồng Nai and Tây Ninh, affecting the development of the wood processing industry.

Now, the pandemic is gradually under control, the centers for processing and exporting wood are resuming their production. Wood products processing and exporting companies stabilized production faster than expected, especially companies using the “three on site” model with on-site production, on-site catering, on-site rest.

“This is a very positive signal for the industry,” said Lập.

Nguyễn Chánh Phương, vice president of the HCM City Craft and Wood Industry Association (HAWA), said 80% of HAWA member companies have restored manufacturing and can deliver the goods. as expected.

Tô Xuân Phúc, an expert from Forest Trend, said that according to a recent survey, only 8.3% of wood product processing companies have stopped their activities due to Covid-19. The others had applied different forms to maintain operations; 24 percent applied the “three in place” model.

The pandemic also led to an 18% drop in the number of employees in the companies surveyed.

At the same time, 83% of wood processing companies said they have developed recovery plans, according to survey conducted by VIFORES, HAWA, Bình Định Forest Products Association, Bình Dương Furniture Association and Forest Trends.

Companies with stimulus packages said they would change their business strategies, implement pandemic control measures in production, and improve the efficiency and scale of processing wood products, Phúc said.

However, Phúc believes that the resumption of production will also depend on vaccination and the effectiveness of prevention and control measures for pandemics in production.

About 46 percent of companies said they would not change their revenue target for this year, while 37 percent expected their revenue to increase. The sustaining companies predicted that their revenues would decline.

VIFORES has two growth scenarios for the rest of the year. In the first scenario, if the value of the industry’s wood and wood products exports recover in the fourth quarter, the total value of exports in 2021 will reach US $ 13.6 billion.

In the second, worst-case scenario, if the value continues to decline until the fourth quarter, the value of exports will be $ 12.7 billion for the entire year.

Doanh said the ministry will support companies in maintaining traditional export markets, but also expand export markets for wood products.

According to the General Customs Department, exports of lumber and wood products in the first ten months of this year reached $ 12.1 billion, up 23.4 percent year on year. The main export markets for these products included the United States, China and Japan.

HAWA President Phương expects that by the end of the year export turnover will return to pre-pandemic levels, which means the value for this year would exceed $ 14.5 billion, a 15% increase from 2020.

This growth is due to the benefits of the Free Trade Agreements (FTAs) that Việt Nam has signed, such as the EU-Vietnam FTA (EVFTA) and the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP), which increase the production capacity of enterprises, he said.

However, inputs and labor are two of the most important factors currently affecting the resumption of production.

Nguyễn Minh Nhật, director of Nhất Nam Construction Mechanical Plywood Co, Ltd, said his company had nearly four months of production under the “three on-site” model, which maintained employment for about 60 percent of its workforce. -work during the social period period of distancing. However, the company is now short of workers due to increased demand for production.

At the same time, the company is facing a shortage of raw materials like wood, due to the time of year and sudden demand.

There are very few domestic suppliers of quality timber, and they too lack the manpower to exploit and transform the raw material into timber. As the whole industry returns to production, the demand for raw materials is forcing many people to import wood raw materials, Nhật said.

Lập said that companies should prepare many solutions in the short, medium and long term, to ensure the supply of raw materials for the processing of export wood products.

The government has a very important role to play in securing inputs and labor for businesses, according to Lập.

Mechanisms that create favorable conditions for the supply of raw materials will help companies to have a larger supply of raw materials. The government should also grant preferential credits to companies to import raw materials.

In the future, the government should have policies that encourage the sustainable development of domestic raw materials.

When it comes to labor shortages, companies should prioritize employee retention and recruitment. Local authorities have coordinated with the business community to encourage workers to return to production, Lập said.

Lê Xuân Quân, president of the Association of Wood and Fine Arts of ng Nai Province, said the planned future industrial must include housing areas for workers, as well as production facilities.

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