Vietnam's Sustainable Forests Key to US, European Markets
Copyright 2000 Asia Pulse Pte Limited
November 1, 2000
Vietnam's forestry processing industry is looking to profitable offshore markets and overhauling its product to match international standards.
Several companies are investing in sustainable forests in a bid to provide wood that is acceptable in US and European markets.
The Agro-forestry Product Processing Export Factory has planted 300ha of cajuput in Binh Phuoc Province's Phuoc Long district in the hope of winning the International Forest Management Council's IFMC Forest Saving Certificate FSC , Le Nho Ba, the company's director said.
"To be eligible for the US and European markets, where wood products are sold for between 10 per cent and 15 per cent more than in other markets, the products must get the FSC - which ensures the wood meets international regulations on forest preservation," Vien Ngoc Nam, of the Ho Chi Minh City Department of Agriculture and Rural Development said.
The Sai Gon Agro-forestry Product Import-Export Company is co-operating with the British-owned Alexandre Company on a project to plant 1,000 ha of forests by 2010.
The Export Furniture Company also plans to join forces with a forest owner in the central province of Thua Thien-Hue to grow trees whose wood can be legally traded under FSC regulations.
But the efforts to plant IFMC-approved forests are facing difficulties from the forestry companies' shortage of capital.
The companies say that while forest land is affordable, they do not have the capital to invest in the forests for 15 years - the minimum period of time it takes new trees to grow to their full height.
As a result, some companies are linking with state-run forestry farms on afforestation projects to ensure a steady supply of raw materials eligible for FSC.
According to a source from the Vietnam Forestry Product and Wood Association, the Scanviwood joint-venture company, which processes export furniture, has invested US$ 1.2 million in a 10,000ha forest through which it hopes to become the first FSC accredited company in Vietnam. By the end of 1999, the country had about 11 million ha of forest areas, only 1.4 million ha of which was planted forest.
The country's 800 furniture export processing companies export $ 150 million worth of furniture a year, with Ho Chi Minh City alone accounting for $ 65 million.
But profits for domestic furniture processors are lowered by the fact that the industry is forced to import 50 per cent of its total raw material.