Wood export facing difficulties, many raw material forests in Nghe An have to stop exploitation

Representative of Nghe An Wood Processing and Non-Timber Forest Products Association said: Nghe An has 3 types of wood production and business including:Tablet production, wood chips, wood products. Since the beginning of 2023, all three products have fallen in price, causing difficulties in output, resulting in raw material forests in Nghe An also having to stop exploitation due to unsold products.

The main reason for the decline in wood exports is the sharp increase in raw material prices and transportation costs; Vietnam's main wood export markets such as the United States, Europe, the United Kingdom, and China are experiencing inflation. Meanwhile, many countries are tightening credit policies, people are tightening spending... This has a negative impact on the production and business activities of wood processing and exporting enterprises.

Due to difficulties in output, many wood industry enterprises in Nghe An are having a lot of products in stock. A representative of Nghe An PP Paper Materials Joint Venture Company Limited in Khanh Hop Commune (Nghi Loc) said that the company currently has over 2,500 tons in stock.wood chipsThe company's wood chip products are mainly exported to countries such as China, Korea, etc.

But since the beginning of 2023, partners in the above countries have stopped purchasing. In the first 6 months of 2023, the unit only achieved 604,000 USD in export revenue, down 1.4 million USD compared to the same period. In the past 6 months, the factory had to operate at a low level to retain workers. The company had 70 employees, but had to cut by half...

In the same situation, Song Hieu Agricultural Forestry Company Limited currently has over 3,800 cubic meters of wood products in stock, worth over 27 billion VND. The inventory is mainly laminated wood and wood blanks exported to European countries. Therefore, some of the company's chip factories are having to temporarily stop purchasing or purchase limited quantities. A representative of this unit said: Exports are facing difficulties, currently, businesses are having to look for new domestic markets but it is also very difficult.

According to research, businesses specializing in wood export such as Thanh Thanh Dat Co., Ltd., Biomass Fuel Vietnam Co., Ltd.... also face similar difficulties.

Nghe An currently has more than 45 wood processing enterprises; more than 100 non-timber forest products enterprises and more than 10,000 establishments producing and trading wooden furniture and non-timber forest products.
According to a report by the Department of Industry and Trade of Nghe An, in the first 6 months of 2023, the province's export turnover of wood and wood products is estimated at over 63 million USD, a decrease of 21 million USD compared to the same period in 2022.

At present, many businesses in Nghe An do not set profit targets but only need orders to retain workers and cover the costs of factory operations. A representative of Thanh Chuong Wood Production and Trading Joint Stock Company in Thanh Huong Commune (Thanh Chuong) added: The wood pellet factory with a total investment of 350 billion VND in phase 1 will be put into operation from 2021, with a capacity of 150,000 tons/year in phase 1.

Since the beginning of 2023, pellet prices have fallen, making output difficult. Specifically, in 2022, the price of pellets reached 180 USD/ton, now it is only 140 USD/ton, pellets are mainly exported to the Japanese market. Due to output difficulties, up to now, the unit has an inventory of over 11,000 tons. To cope with the above difficulties, the unit is trying to find new orders in the European market.

Through research, it is known that in order to maintain operations in the current difficult period, many companies have proactively reviewed costs to minimize them; at the same time, they have sought niche markets and small orders to maintain operations and retain workers while waiting for the market to recover. A few businesses have sought to shift towards diversifying markets and products...