Promoting the wood processing industry

According to experts, Quang Ninh possesses all the favorable factors to become a center for processing and exporting wood and forest products to the international market. However, to date, the development of the province's wood processing industry has not met expectations.

Loading and unloading wood chips at Cai Lan Industrial Park (Ha Long City).

Currently, Quang Ninh province has 278 active timber processing facilities, making significant contributions to the development of the forestry industry. In recent years, businesses in the province have focused on investing in equipment, production lines, and technology upgrades, as well as training personnel for the timber processing industry. The province's export value of timber and wood products has shown consistent growth over the years. Specifically: over US$221 million in 2020; US$238 million in 2021; and US$242 million in 2023. The main export markets are Japan, China, and South Korea, with a gradual expansion towards the EU market.

Notably, despite the province's significant advantages in transportation systems and the proactive planning of industrial zones and clusters from an early stage, the wood and forestry processing industry still faces many shortcomings and limitations. Currently, most wood processing facilities are small-scale, family-owned businesses producing furniture and sawn timber, interspersed within residential areas, operating spontaneously without following any planning or development orientation. The workforce mainly consists of low-skilled, seasonal workers who have not received specialized training. Companies are small in capital and lack business linkages. Technology is outdated, and most processing is rudimentary, resulting in monotonous products (mainly wood chips) with low product value.

In particular, many businesses have not thoroughly researched the legal regulations and legal basis during the course of their production and business activities, especially the regulations in Government Decree 120/2024/ND-CP issued on September 30, 2024, amending and supplementing some articles of Government Decree 102/2020/ND-CP dated September 1, 2020, regulating the Vietnamese Legal Timber Assurance System. This has led to numerous difficulties and obstacles regarding documentation of the origin of forest products in exploitation, circulation, transportation, processing, and export.

A representative from Quang Ninh Wood Chip Import-Export Co., Ltd. stated: According to Decree 120/2024/ND-CP, from November 15, 2024, when exporting wood chips originating from domestically grown plantations to markets outside the EU, businesses need confirmation from local forest rangers. Therefore, we hope that this confirmation process will be implemented quickly because once a sales contract has been signed with a foreign partner, if the goods are not loaded onto the ship on the delivery date due to waiting for forest ranger confirmation, the penalty for delayed delivery will be a significant loss for the business.

Wood processing at Tien Yen Forestry One-Member Limited Company. Photo: Viet Hoa

Many other wood processing businesses also stated that they are struggling with the necessary documentation for businesses and individuals purchasing raw timber, purchasing and producing wood chips, regulations on entities required to verify the origin of timber from planted forests, and the classification of businesses. They also expressed a desire for the province to soon have mechanisms to support businesses in linking, cooperating, applying science and technology, building and applying product chain of custody certification; prioritizing land allocation for wood processing businesses, especially for raw material storage and warehousing areas; mechanisms to support the wood processing supply chain with furniture factories in industrial parks and clusters as the core; building and supporting the supply chain for non-timber forest products with some key non-timber forest products of the province; and policies to support wood processing facilities relocating to industrial parks and clusters.

To strengthen the wood and forestry processing industry in the province, Mr. Mac Van Xuyen, Head of the Forest Protection Department, stated that the Department is coordinating with relevant agencies to develop and refine mechanisms and policies to support capital, land, and the application of scientific and technological advancements in the production and processing of wood and non-timber forest products. Furthermore, to help businesses fully understand and correctly implement the Regulations on the Legal Timber Assurance System of Vietnam, in early November 2024, the Department also organized a conference to implement Decree 120/2024/ND-CP with the participation of experts from the Forest Industry Research Institute (Vietnam Academy of Forestry Sciences). Another solution that we consider very important is for businesses to establish the Quang Ninh Provincial Wood and Forestry Processing Association as soon as possible. Only through such an association can they join the common playing field of wood and forestry associations nationwide. This creates numerous opportunities to find partners within and outside the industry for joint ventures and collaborations, aiming to share orders, reduce product consumption costs, cooperate in human resource training, and provide and share legal, market, customer, technology, and supplier information to support members in business strategy planning. The Forest Protection Department is ready to accompany and assist businesses in carrying out the procedures for establishing the Association.

Source: https://baoquangninh.vn/thuc-day-cong-nghiep-che-bien-go-3329738.html