This document discusses Vietnam's wood industry and trade. It notes concerns over deforestation from natural disasters and an investigation into illegal timber imports. Global wood trade is growing due to factors like increased production and trade liberalization. Vietnam exports wood products like woodchips, pellets and furniture, mainly to China, the US, and Japan. However, the industry faces issues like small scales of production and ensuring legality of wood sources. The vision is for Vietnam to become a top wood producer and exporter through developing industrial clusters and technology while improving sustainability.

1. Global wooden products trade & VN
wood industry development 2021 – 2025
& further
Ngô Sỹ Hoài,
Vietnam Timber & Forest Products Association
Structure
1. Two concerns of VN forestry & wood industry
2. Wood in the world vision
3. Global wood products trade
4. VN exporting/importing wood products
5. Problems faced
6. Wood industry development 2021 – 2025 & further
7. Conclusions

2. 1. Two concerns of VN forestry & wood industry
1.1. Natural disaster in Central Vietnam: Deforestation & micro
hydropower severely accused – drastic shift to environmental
forestry and CC responsive forestry needed !

3. 1.2. USTR initiated Section 301 investigation on VN
importing, using & trading illegal timber !!!
[Billing Code 3290-F1]
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE Docket Number USTR-2020-0036
• Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to the
Import and Use of Illegal Timber
• AGENCY: Office of the United States Trade Representative.
• ACTION: Notice and request comments.
• SUMMARY: The U.S. Trade Representative is initiating an investigation of Vietnam’s acts, policies,
and practices related to the import and use of timber that is illegally harvested or traded. The Office of
the United States Trade Representative (USTR) seeks comments regarding the investigation.
DATES: To be assured of consideration, you must submit written comments by November 12, 2020.
ADDRESSES: You should submit written comments through the Federal eRulemaking Portal:
http://www.regulations.gov (Regulations.gov). Follow the instructions for submitting comments in section IV.
The docket number is USTR-2020-0036. For issues with on-line submissions, contact the Section 301 line at
202-395-5725.
FOR FURTHER INFORMATION CONTACT: For procedural questions concerning the submission of
written comments, contact the Section 301 line at 202-395-5725. For other questions concerning the
investigation, contact David Lyons, Assistant General Counsel, 202-395-9446, Marta Prado, Deputy Assistant
U.S. Trade Representative for Southeast Asia and the Pacific, 202-395-6216, or Joseph Johnson, Senior Director
for Environment and Natural Resources, 202-395-2464.

4. 2. Wood in the world vision
2.1. Wood & emission reduction

5.  Best building material & most
environ friendly material:
• Renewable
• Little sewage/wastewater
• Less energy consuming
• Better insulated
• CO2 storage
 “Wood is good” & “W4W – Wood
for World”
 More supply than demand !!!
2.2. Wood – truly green & environment friendly
material

6. Energy effective
Strength Echo absorption Bio-decomposable & renewable
Wood benefits: No better material to solve greenhouse emission !.

10. Grain
Wood patterns
111

11. Texture
Wood grain/ fiber

12. Color
Wood colors

13. 3. Global trade of wood
products
464.21 billion USD in 2016, increasing 66.7% compare to 1997
due to international labor division, science & technology
progress, trade liberation & economic growth after 2008 crisis
leading to growth of wooden products trade.
（100 million USD）
FAOSTAT
0
1000
2000
3000
4000
5000
6000
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016

14. Dimension of global wooden products trade:
465 billion USD
• Log: 249 million m3 (13% of harvested wood)
• Lumber: 287 million m3 (61%)
• Wood-based panels: 174 million m3 (42%)
• Wooden furniture: 160 billion USD (85 billion
in 2005) (China, Italia, Germany, Poland & VN
share 32% of exports)

15. Wrong perception/prejudice: wood is scarce !

16. Changes: new pattern of trade being
formed
• Wood processing & trade more concentrated in Asia,
North America, Europe & developing countries play
more important role in global wooden products trade;
• North America & Europe: Reduced 71% - 63% in
2006 – 2018 and important role continued;
• Asia, Africa & Oceania: trade share increased;
• Africa & Oceania trading majorly log and sawn
timber; the dream of added value !
• China is the biggest contributor, VN is emerging.

17. The factors affecting forest product trade
Accelerated globalization
More attention to “green economy”
Acute global competition
Economy & life improvement
Growth of global fibre supply

18. Changes: More green based trade
Forest certification
ensures the timber
trade traceability and
the sustainable forest
management
Green economic
growth requires the
green trade/green
product trade
打击非法采伐及相关贸易
已经不仅是贸易问题，更
成为涉及政治、
Combating illegal logging
is the backup of green
trade and ensure
sustainable green
development
Green trade/green
product trade will be
the next growth engine
for green economic
development

19. High value-added products
manufacturing back to developed
countries
Policies for value-
added industry
development
A
Technology
development
B
Promote new
economy with
higher value-added
products
C

20. Technology innovation and new economic
development change the trade pattern
Bioenergy
and biomass
products will
be the next
remarkable
forest
products in
the
international
market
Technology
research,
developme
nt and
application
changes the
production
of forest
products
and their
trade
Wood
structure
is the way
forward
of wood
trade
The
technology
standards
for green
products
influence
the
internation
al forest
product
trade

21. Music Palace

23. Trend: Two-way transfer of world wood industry
first
industry
transfer
Third
industry
transfer
Fifth
industry
transfer
Second
industry
transfer
Forth
industry
transfer
From the
UK to
Europe
and north
America
From Japan
and Germany
to four Asian
Tigers
Two-way transfer:
upmarket industry
back to developed
countries and low-
valued industry chain
kept in developing
countries
From
USA to
Japan and
Germany
From USA, Japan,
Germany and four
Asian Tigers to
developing
countries, including
China and VN

24. Trend: Trade rules and statistical
method changed
EUTR
Lacey Act
Australian
bill
Japan
Clean Wood
Act
forest
certification
climate change
Carbon trade
Green building
Trade
negotiat
ion and
policies
Envir
onme
nt
polici
es
Trade
statisti
cal
method
Legal
timber
supply
Trade
libera
lizati
on
 TTIP
 CPTPP
 CETA
 RECP
Made in the World
proposed by WTO
WTO: calculate the
contribution and
revenues of a given
country to trade
with the added
value of products
instead of the
product value
(export surplus
does not reflect the
true nature)

25. 4. Vietnam exporting/importing WP
4.1 The evolution of Vietnamese wood businesses
 Before 2000: exported mainly log, lumber, semi-finished
products
 From 2000 up to now:
 Outdoor → indoor furniture;
 Outwork of customer designs → designing & manufacturing;
→ Exporting living interior;
 Utilization of entire biomass from planted forest: woodchip,
wood pellet, wooden furniture.
 2 comparative advantages:
 Low labor force;
 Plantation wood abundant (3 million ha of commercial acacia
plantation (Kingdom of acacia) + 1 million ha of rubber farms).

26. 4.2. Wood industry & impressive growth of WP export
(as of 15 Oct.: export value of USD 9.5 bil., import
value of USD 1.9 bil.)
(Source: GDC VN)

27. Key groups of exported WP

28. Market destinations

29. Export value by key groups of WP 2019
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
1,700
409
64
790
1,762
5,000
940
Million
USD
Woodchips Pellets Log and
sawn
timber
Wooden
boards
Chair Furniture Others

30. Wood consumption for exported WP (log
equivalent m3) 2019, million m3
26,00
3.93
0.26
6.67
3.63
10.67
2.43
0.00
5.00
10.00
15.00
20.00
25.00
Million
m3
Woodchips Pellets Log and
sawn
timber
Wooden
boards
Chair Furniture Others

31. Import: 2.5 billion USD
Top suppliers

32. Imported WP

33. Big wood processing clusters in VN
 Bình Dương province: USD 5 billion
 Đồng Nai province : USD 1.5 billion
 HCMC: USD 1.2 billion
 Hà Nội: USD 600 million
 Bình Định province : USD 481 million
 Vĩnh Phúc province : USD 199 million
 Nghệ An province : USD 161 million
 Quảng Ngãi province : USD 157 million
 Quảng Ninh province : USD 151 million
 Quảng Nam province : USD 138 million
 Industry is shifting to the Central, Hanoi and neighboring regions

34. 5. Problems faced by VN wood businesses
 Extensive development using 2 advantages
 Cheap & low quality raw material (acacia & rubber);
 Low wage labor (250 – 350 USD/month), shortage of labor force in near future
 Small scale, equipment & technology limit, low labor productivity
 Over 5.000 SMEs (3.000 engaged in export/import) & 340 wood villages
 Newly set up businesses, scarcity of capital to invest in and modernize production
 Wood legality assurance
 Wood legality becomes a “to be or not to be” question!
 FSC plantation: under 300,000 ha;
 Wood import from 100 sources, traceability trouble;
 VPA/FLEGT still have uncertainties.
 Lack of branding & designing
 Outwork for overseas traders (IKIA, Carefoor, ScanCom….);
 Low value added WP.
 Risk of trade protection and loss of markets
 Relocation of production
 South Korea imposed AD tariff on plywood
 US investigation on plywood
 USTR: Section 301 investigation on VN import, use and trade of illegal timber (!)

35. 6. Wood industry development 2020 – 2025 &
further
Vision
 Wood industry becomes key sector of VN
economy;
 VN becomes one of the top WP & NTFP
producers & exporters with re-known brands
(sustainable/ responsible wood industry
development !).

36. Wood industry development 2020 – 2025 &
further (continue)
Objectives:
 Satisfy local WP demand expected to be 5 billion USD in
2025 (8% growth rate) & 6 billion in 2030 (6%);
 Export of WP and NTFP: 18 billion – 20 billion USD in
2025 (12%) & 23-25 billion in 2030 (6%).
Solutions:
 Development of woodworking clusters connected with
raw material areas in various ecological zones;
 Establishment of concentrated wood
processing/preserving areas with advanced technologies;
 Development of machine manufacturing, forest
equipment production, associated industries;
socialization of resources for branding WP made in VN.

37. 7. Conclusions
• Export of WP and NTFP ranks No. 6 following telephones,
computers, garments, shoes and machine manufacturing,
market share available, however, risks are more;
• Forest & wood becomes more and more environ & social
sensitive, wood legality becomes “to be or not to be”:
• VN has emerged as a leading center of world WP and the
need to improve VN environ friendly image & responsible
development;
• On the way towards the target of 20 billion USD in 2025,
Viet wood has to change its mindset of net benefit (VN
net earning) rather than the size of export revenue.

38. Thanks for your attention !