HCM CITY — Foreign direct investment in the wood processing industry has increased rapidly, especially since 2018, the Việt Nam Timber and Forest Product Association has said.
In the first nine months of the year foreign investors had registered to invest the same amount as in the whole of 2018, it quoted the Ministry of Planning and Investment’s Foreign Investment Agency as saying.
A report on foreign direct investment in the wood processing industry by Tô Xuân Phúc of Forest Trends, Cao Thị Cẩm of VIFORES, and Trần Lê Huy of Forest Product Association of Bình Định showed that FDI projects have been and would continue to be an integral part of the wood processing industry.
“Last year 529 foreign enterprises were directly involved in exports worth nearly US$3.96 billion, or 46.7 per cent of the industry’s exports.
“In the first nine months of 2019, the number of foreign enterprises directly participating in exports increased to 565, with their exports being worth nearly $3.4 billion.
“[Besides], many other foreign enterprises are now providing materials to processing enterprises and providing logistics services and other types of services.”
Low labour costs, easy access to raw materials, favourable infrastructure, and preferential tariffs due to free trade agreements the country has signed are among factors that make the industry attractive to foreign investors, it said.
The US-China trade war could create new opportunities for foreign investment in the industry, it added.
Điền Quang Hiệp, chairman of the Bình Dương Furniture Association, said foreign investment in the industry, especially in the context of the trade war, is also causing concern, especially about origin fraud.
In addition to the Government’s efforts, the industry association must also proactively detect origin frauds to notify authorities, he said.
In addition to encouraging foreign investment in the wood processing industry, there should also be policies to encourage the development of local companies, he added.
Cao Chí Công, deputy director general of the Việt Nam Administration of Forestry, said wood and forest product exports are expected to meet the Government’s target of $11 billion this year.
“Vietnamese wood products are available in over 120 countries and territories. The country is the largest exporter in Southeast Asia, second largest in Asia and fifth largest in the world. This is a very proud achievement.”