HCMC – Given the heavy impact of the Covid-19 pandemic, Vietnam’s woodwork exports might have zero growth this year, heard attendees at an online workshop on April 28.
The industry targets US$12 billion exports this year but might see no growth this year, said Ngo Sy Hoai, vice chairman and general secretary of the Vietnam Timber and Forest Products Association.
The pandemic started in mid-March to strike the major markets for Vietnam’s woodwork products, which account for 80% of total exports, including the United States, Japan, China, South Korea and the European Union. The governments of these markets have taken aggressive steps to keep the pandemic under control, such as border closures which have resulted in supply chain disruptions.
According to a survey conducted among 124 enterprises in late March, all the respondents were affected by the pandemic. Three-quarters of these firms lost an estimated VND3.07 trillion.
Besides this, more than half the firms have had to downsize, 35% will suspend operations and 7% have already shuttered. Meanwhile, only 7% of the surveyed firms are still operating as usual.
According to the workshop, the Government should quickly introduce new policies to support wood processing firms, but firms should also work harder to adapt to a new situation. It is essential that firms change their focus, boost connections with other businesses in the industry, build domestic supply chains and invest in supporting industries.
The pandemic has also revealed the weaknesses of Vietnam’s woodwork supply chains, which depend on imported materials, particularly from China.
This dependence can be reduced through trade agreements Vietnam has signed in previous years, such as the CPTPP, EVFTA, VKFTA and AEC. The woodwork industry should thus respond to shifts in production, order and investment as well as restructure its supply chain to help stimulate development.
By Hung Le