Viet Wood faces 3 huge challenges

(HQ Online) - Despite being a potential industry, maintaining the double-digit export growth rate in recent years, processing and exporting timber has been facing 3 significant challenges. is to "touch" the export target of 20 billion USD by 2025.

In 2020, the export of wood and wood products is set to reach 12.5 billion USD. Photo: N. Thanh.

According to the General Department of Forestry (MARD), the first challenge is that human resources are tending to become increasingly scarce, shifting to other industries from the wave of shifting production investment from countries into Vietnam.

Statistics from the Foreign Investment Agency (Ministry of Planning and Investment) show that the number of newly registered FDI enterprises in the first nine months of 2019 was 67, with a total investment capital of over US $ 581 million, equivalent to 216% of total new FDI inflows into the industry in 2018.

40% of FDI enterprises have difficulty recruiting skilled workers, leading to competition among industries. Labor costs in industrial parks currently increase by 10-20%. Labor salary entering the market every year tends to increase rapidly.

In addition, the growth index of Vietnam's timber industry has increased by 18%, requiring a proportional amount of labor to maintain this pace. However, the amount of well-trained labor force has not met the expectations of businesses, most of them have to retrain, especially human resources for the operation of modern technology machines, design, production management. ...

The total number of enterprises in the wood processing industry is over 5,000, attracting about 500,000 employees, but workers with university degrees are only about 2-3%, technical workers are more than 25%, the rest are unskilled workers. informed.

“The demand for labor quality is forecasted to need about 64,000 people with university degrees, postgraduate degrees and 266,860 technical workers by 2020; by 2025, there will be 106,800 people with university and postgraduate degrees and 445,200 technical workers, ”said the representative of Vietnam Administration of Forestry.

The second challenge is that land prices are quite high, making investment in expanding land fund for production increasingly difficult.

The General Department of Forestry analyzed: The US-China trade tensions create a need to move production to Southeast Asia, of which Vietnam is an attractive place. In addition, the positive impact from the Free Trade Agreement (EVFTA) has pushed up the domestic demand for industrial real estate.

Specifically, the production market for Vietnam's wood industry is most concentrated in the Southeast with Ho Chi Minh City, Binh Duong, Dong Nai, Long An, Tay Ninh, Ba Ria-Vung Tau, with factory rental rates. ready-built varies from 2.5 to 5.5 USD / m2 / month with the minimum rent of 3-5 years.

In traditional areas such as Binh Duong and Dong Nai, the fast and high occupancy rates in industrial zones have pushed land rents from US $ 80 to two years ago to US $ 135-150 per rental cycle. Other potential areas such as Long An and Tay Ninh rents also increased at over 130 USD / cycle.

The third challenge that cannot be ignored is the pressure of digital transformation to force businesses to adapt quickly from design, production technology and especially digital commerce.

The digitization platform is changing greatly the processing industry, administration, design, purchase and sale ... Online business is also the trend of starting to deeply integrate into the furniture industry, greatly changing the research industry. research and develop the product and how it is produced.

To ensure the sustainable development of the industry, in the medium term, the whole industry determines to expand investment in completing the value chain from production - design - trade to brand.

General Department of Forestry analyzed: In 2019, the total consumption value of the global wood and furniture industry reached 450 billion USD, but of which the manufacturing sector accounted for only 140 billion USD, the rest was divided equally into 3 bright areas. create - trade - brand. Potential and market potential for Vietnam is still very large.

In the long term, the forestry sector is determined to develop a strategy to plan high quality human resources to meet the industry's needs; planning concentrated production areas; planning large timber forests, increasing seed quality, building a brand of yellow cotton Melaleuca timber, investing in designing products from indigenous planted forest timber; promote technology application, promote and create an environment for enterprises to change technology, reduce labor dependence, pass through, automate and digitize.