More than 51% of wood producers in Vietnam have to reduce production

Vietnamese industry – growth disrupted
In the recent decade, based on 2 key competitive
advantages, including cheap labour (average monthly
wage of US$300) and an abundant wood supply (3 million
ha. of fast growing acacia plantation and 1 million ha. of
rubberwood., Vietnam’s wood and wood product
(W&WP) exports have consistently grown at over 10%
annually. This growth was maintained during the first two
and half months of 2020 when W&WP exports earned
US$2.047 billion, a year on year growth of 18%.

With the COVID-19 pandemic spreading in the US
(market for nearly 50% of W&WP shipped from
Vietnam), Japan (13%), China (12%), EU (10%), South
Korea (10%) the well-developed supply-demand chain has
been disrupted.

Survey – Impact of pandemic on timber sector
A quick survey conducted recently by VIFOREST and
local associations including HAWA, BIFA, FPA Binh
Dinh Associations with 124 enterprises shows the severe
impacts of the pandemic on Vietnamese wood industry.

Huge financial losses by enterprises
Responding to the questionnaire circulated by VIFOREST
and its associates, 76% of enterprises state that they are
facing pandemic damage and the initial loss is estimated at
VND3,066 trillion (around US$130 million); 24% of the
surveyed enterprises say that they have not identified

Most enterprises have reduced production, some have
to closed their factories
Over half (51%) of the respondents say that they had to
reduce production; 35% of enterprises assume that their
business can be maintained for some while, but suspension
may not be avoided in coming days; only 7% of
enterprises remain operational.

The situation, however, may turn worst at any time
because the entire industry live on the orders left from
2019, and no new ones have made in 2020.

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