“The export value is expected to top 2.8 billion USD this year, 28.6 percent higher than in 2006,” said Tran Quoc Manh, deputy chairman of the Ho Chi Minh City Handicraft and Wood Industry Association (HAWA).

Speaking at a conference on the effect of WTO entry on the wood processing and handicrafts industry last week, he said the country ranked second in ASEAN in wood products exports.

The staple has been sold the 120 countries and territories, with the US being the largest buyer with 41 percent of all exports. Followed by the EU and Japan .

Despite the growth, the industry like many others, is in trouble because of the unfavourable economic conditions at home and abroad, according to Nguyen Ton Quyen, deputy chairman of the Vietnam Wood and Forest Products Association (Viforest).

The growing demand for certificates of origin of the timber used to make wood products is also a headache for exporters. The EU, for instance, requires timber materials to be certified by the Forest Stewardship Council.

The shortage of skilled workers and raw materials was another hurdle, Quyen said.

With local supply meeting just 20 percent of demand, the rest was imported at huge cost from Indonesia , Malaysia , and the Philippines .

The small size of Vietnamese wood processors and their lack of co-operation made it difficult for them to undertake large orders, he added.

Many firms focused exclusively on foreign markets, ignoring the huge potential of the domestic market.
Manh said to ensure the industry’s sustainable growth, the Government should involved both firms and individuals in afforestation efforts to improve the supply of raw materials.

He added banks should provide credit on easy terms to wood processing companies to help them maintain operations and renew technologies to improve productivity and quality.

The Agro-Forestry-Fisheries Processing Department said a trading centre for the staple needed to be established in each of the country’s three main regions to help companies access raw materials and share export contracts so that the entire industry benefits.

Quyen said the Government should help the industry with promotion and market research to find new outlets and with developing a made-in-Vietnam trademark.

Firms should co-operate to improve their overall capacity and avoid unhealthy competition, he said. According to the Ministry of Agriculture and Rural Development, Vietnam has around 2,500 wood processing and export companies, 300 of them foreign-owned.