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Processing and wood exports Vietnam stood the challenge of TPP

27/08/2014

Vietnam is currently exporting household furniture 2nd largest in Asia, however, the industry is currently facing many challenges while welcome Agreement Trans-Pacific trade (referred to as TPP ) to open the market mechanism. Agreement on the Trans-Pacific trade will bring greater opportunities for many sectors of the economy of Vietnam, but will set processing and wood exports to the challenge.


The first challenge of processing and wood exports Vietnam: the TPP Agreement contains provisions on regional value content. Specifically, the product must reach the localization rate of 55% or more of the total value; now only allowed to enter a maximum of 45% of materials from outside the country to produce a product, including the cost of processing. However, the current structure of the Vietnam furniture products not meet this requirement. Over 80% of the timber used in the manufacture of wood products in Vietnam are imported. On average, Vietnam imported nearly 3.5 million m3 / year and which, serving imported lumber wood processing industry accounted for 65%.
The second reason lies in labor skills. To improve product quality furniture, handicrafts of Vietnam under the standards of the TPP should require a team of skilled employees; But the average labor productivity of a worker Vietnam products only 1.9 seats / day, less than 4.5 yield the chair / d of employees working in China.
In addition, environmental issues should be of wood processing enterprises pay much attention to maximize advantages from TPP agreement brings. Mr. Nguyen Quoc Khanh, chairman of the Handicraft and Wood Processing HCMC expressed the view: "We found that the TPP will contribute to better business, if there are bound to VN in the TPP as a security issue ensuring environmental or other problems, it is also good for businesses to help them to further improve the work environment as well as the size of a business manufacturing and wood processing. enterprises is currently focused on producing orders from now until the end of the year. According to me, the timber industry is not highly profitable industry average but is higher than other sectors. "
Existing businesses in the industry still has certain limitations such as the monotonous designs, cheap labor, low yield, labor management capacity has not been raised ... Therefore, the promotion of trade trade, marketing, branding and national value chain in this sector is the country still faces many difficulties in raising the value-added products, improve competitiveness. However, with the positive changes in recent years the development prospects of the export sector and wood processing in Vietnam is still a good sign. Dr. Pham Thi Thu Hang - Secretary General Chamber of Commerce and Industry of Vietnam (VCCI), said: "During the negotiations, the origin of the problem is the problem of raw materials is observed, particularly outside issues origin criteria also issues of environmental standards. industry's furniture industry has a huge impact on the environment. This is an important message to the furniture business concern. businesses to build established itself as a standard in how enterprises to ensure that the wood is sourced origins standards ".
So, for now, the problem of securing the origin criteria, standards of high quality products, the answer is still the capital. Bank interest rate has dropped but is still very high compared to neighboring countries, businesses want to reach long-term loans are still difficult, which leads to limited machinery production improved quality and lower product prices, weak competitiveness. This vicious circle needs to be removed for effective enterprise access a wider market, higher requirements. Mr. Nguyen Chien Thang, Director Scansia Paciffic furniture company, said: "Machines of very modern wood craft, productivity increased 10 billion, 20 billion does not mean we need workers several times, but we need workers, but workers are not alone in the factory, transportation and ancillary sectors to follow anymore, the timber industry creates numerous advantages entail ancillary industries to support. As the access to medium and long-term capital for investment banks is almost out less loans, loans with very high interest rates ".
However, some banks have also supported business plan to solve the problem of capital. There are programs now support medium and long term investment in machinery and equipment. The other is how to approach businesses know the loans and that suits me. Mr. Doan Anh Tuan, Director of Business Development of small and medium enterprises, Vietnam Prosperity Bank, said: "The program is a program Smeep our cooperation with international organizations in Japan, this program especially for investment in machinery and equipment, buildings are about long-term investment, capital program is the source of international capital should not limit interest rates and down 2% compared with medium and long-term interest rates today. This is a program I think is very suitable for the wood industry businesses when we are looking for ways to innovate machinery, improve labor productivity, reduce product cost. "
Largest export market of Vietnam today is still America and predicts this will continue to be a potential market for Vietnam's wood products. However, the timber industry and all other sectors, will find and exploit many diverse markets around the world.
To develop this momentum is stronger relay, the State needs to quickly build development plans woodworking industry and the raw material to the business premise in investment-oriented development; create conditions for enterprises and business households have access to loan capital equipment investment; invest in planting large trees with time borrowing and repayment in accordance with plant growth period; take measures to reduce costs for businesses in the manufacturing and export. If so, processing and export of new wood continues to confirm the strength of the industry is a major contributor to the national GDP as the time to receive the Partnership Agreement, the Trans-Pacific was imminent

 

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