Exports of wood and wood products in 2020 are guaranteed to exceed $12 billion, far surpassing the record of 2019. This is a great success for the wood industry in the context of Covid-19.
Facing major challenges
Like many other industries, wood exports And the wood product industry in 2020 faced significant difficulties at times due to the Covid-19 pandemic.
According to the Vietnam Wood and Forest Products Association (Viforest), in the latter half of March 2020, over 80% wood buyers exporting to the US announced they were halting purchases and canceling orders pending further developments; 81% businesses received notices of order cancellations and delays for exports to the EU; and the Japanese, Korean, and Chinese markets also saw a decrease of 60-80% in orders…
Meanwhile, due to the Covid-19 pandemic worldwide, businesses are also facing rising raw timber prices of $10-20/m3 due to a shortage of logging workers and empty containers, and increased shipping costs of $500-1,000/container due to disruptions in many global supply chains…
At that time, due to the complicated developments of the pandemic, customers were unable to visit the factory to approve samples, preventing Vietnamese wood businesses from signing new orders for the 2020-2021 season.
Therefore, many factories face the risk of closure and cessation of operations, hundreds of thousands of workers face unemployment, and there is no guarantee of employment or social security for workers in the long term.
The situation in the timber industry at that time was so difficult that on March 30, 2020, Viforest had to send a written request to the Government to include several sub-sectors related to wood and forest product processing in the Draft Decree extending the deadline for paying taxes and land rent, such as: Wood processing and production of products from wood, bamboo, and rattan (excluding beds, wardrobes, tables, and chairs); production of products from straw, reeds, and braided materials; production of products from wood, bamboo, and rattan (excluding beds, wardrobes, tables, and chairs); production of beds, wardrobes, tables, and chairs…
Wood processing for export at Woodsland Tuyen Quang Joint Stock Company. Photo: Tung Dinh.
In the report "Facing and Overcoming Challenges: The Impact of the COVID-19 Pandemic on the Wood Industry and New Directions for Businesses," published on April 13, 2020, the authors To Xuan Phuc (Forest Trends), Cao Thi Cam (Viforest), and Tran Le Huy (FPA Binh Dinh) stated:
The pandemic is having and will continue to have a very negative impact on all stages of the wood industry supply chain, from exports, domestic production and consumption to raw material imports; the pandemic has caused all of Vietnam's key export markets such as the US, EU, China, Japan and South Korea to almost freeze, leading to businesses operating at a reduced capacity or ceasing production, and tens of thousands of workers losing their jobs.;
The pandemic reduced the scale of production activities in craft villages – one of the leading channels for supplying wood products to the domestic market – by 70-80%; the pandemic caused projects using wood in construction, such as residential buildings, hotels, and restaurants, to halt operations; and the pandemic reduced the volume of imported raw wood materials by at least 70%.
Statistics from the General Department of Customs clearly show the impact of Covid-19 on the wood industry. In April 2020, exports of wood and wood products reached approximately US$700 million, a decrease of 18.71% compared to April 2019. In May 2020, exports of wood and wood products reached US$771.7 million, a decrease of 15.11% compared to May 2019.
Spectacular recovery and growth
In June 2020, exports of wood and wood products showed a spectacular recovery, reaching approximately $950 million, an increase of 15.61% compared to June 2019.
Notably, in July 2020, exports of wood and wood products surpassed the $1 billion mark, reaching $1.13 billion, a significant increase of 29.61% compared to July 2019. This recovery was attributed to the easing of social distancing measures in many key markets, increased demand for furniture as people in many countries stayed home more, and the US-China trade war causing many US importers to switch from purchasing Chinese wood products to Vietnamese ones.
However, the situation at that time was still not really promising. (In an interview with the newspaper) NNVN In August 2020, Mr. Nguyen Chanh Phuong, Vice Chairman and General Secretary of the Ho Chi Minh City Handicraft and Wood Processing Association (Hawa), stated, "With the current complex and unpredictable pandemic situation, I believe that exports of wood and wood products this year will find it difficult to achieve the growth target set at the beginning of the year, and may only be able to maintain the same level as last year or achieve low growth.".
Wood processing for export at Woodsland Tuyen Quang Joint Stock Company. Photo: Tung Dinh.
Nevertheless, exports of wood and wood products in the following months consistently impressed, exceeding $1 billion each month, peaking in October with a record $1.28 billion. November also nearly matched the October record with $1.236 billion.
As a result, by the end of November, exports of wood and wood products had reached over $11 billion. With spectacular growth in the second half of the year, it is expected that for the whole year of 2020, exports of wood and wood products could reach a record high of approximately $12 billion, exceeding the 2019 record ($10.64 billion) by more than $1 billion.
This will ensure that exports of wood and non-timber forest products in 2020 will definitely exceed the target of 12.5 billion USD.
Businesses that are responsive and adapt quickly.
Explaining the great success of the timber industry amidst the ongoing global impact of the Covid-19 pandemic, some experts believe that the primary reason is Vietnam's effective control of the disease.
According to Mr. Nguyen Chanh Phuong, the Vietnamese wood industry experienced virtually no production disruptions, with no factories being shut down due to COVID-19 infections. Therefore, the Vietnamese wood industry not only maintained its export capacity but was also able to fill the gap left by production disruptions in many other countries caused by the pandemic.
In addition, the rapid and timely adaptation of wood businesses in promotion and sales to suit the context of the pandemic has contributed significantly to the strong growth of wood and wood product exports.
According to Mr. Dien Quang Hiep, Chairman of the Binh Duong Wood Processing Association, the pandemic has forced people in many countries to stay home more, leading to increased demand for furniture and home renovations, as well as increased online shopping, including for wooden furniture. Recognizing this situation, many wood businesses have boosted online sales through global e-commerce platforms such as Amazon and Alibaba.
According to Mr. Nguyen Chanh Phuong, immediately after events related to the wood industry were forced to close due to the pandemic, Hawa launched the HOPE (HAWA Online Platform for Exhibition) online exhibition, aiming to connect Vietnamese wood and furniture businesses with international buyers.
Through HOPE, Vietnamese furniture businesses demonstrate their competitiveness by showcasing their products, production scale, and global supply chain in a visually professional manner, thereby increasing sales opportunities in international markets.
Therefore, upon its launch on August 7, 2020, HOPE brought together 50 online showrooms and projected to introduce 100 showrooms by the end of 2020. Through HOPE, many furniture businesses have gained additional orders from international customers.
Wood processing for export at Woodsland Tuyen Quang Joint Stock Company. Photo: Tung Dinh.
For six consecutive months, each month exceeded $1 billion.
The second half of 2020 marked an unprecedented record in the timber industry: for five consecutive months, from July to November, each month exceeded $1 billion in export value. Specifically: July reached $1.13 billion; August reached $1.15 billion; September reached $1.15 billion; October reached $1.28 billion; and November reached $1.24 billion.
In the first half of December 2020, exports of wood and wood products reached $618 million. Thus, for the entire month of December, exports of wood and wood products are guaranteed to exceed $1 billion. This marks a record of six consecutive months, with each month exceeding $1 billion.
According to Thanh Son – Agriculture Newspaper
