Security requirements relating to document production

Since Vietnam’s timber exports are on the rise, securing supply chains for raw materials is crucial. Photo: Le Toan

By the end of 2020, Nguyen Trong Hieu and seven other production households representing the Lien Ha handicraft village in Hanoi’s Dan Phuong district had been supplying the market mostly with beds and wardrobes, mainly to furniture store Tan Vinh Cuu JSC (Tavico) in the southern province of Dong Nai.

Hieu told VIR, “We are gradually creating links between production households in Lien Ha and furniture manufacturers in the south to promote and sell our products.”

However, as long as the southern market remains unfamiliar with traditional handicraft products from the north, Lien Ha can certainly not sell its products immediately. The advantages of its craftsmanship or the use of proper and high-quality materials cannot offset the cost of transporting from Hanoi to Dong Nai.

“The important factor for these products is to have a unique design, but we cannot always achieve it,” Hieu explained.

The emergence of Lien Ha village’s products at Tavico has attracted the attention of other manufacturers, contributing to creating new awareness for traditional craft villages about the legal use of timber. This association process can help craft villages build brand names and values through activities that capture market trends, the importance of designs, and the demand of domestic consumers.

Weak links

There are already several link models between craft villages and manufacturers in Vietnam, some of which were born when they realised that such cooperation would foster survival to withstand the pandemic, even before taking sustainable development into account. However, these models are still very new, focusing on a few timber suppliers and not meant for export, which would benefit the entire value chain the most.

“Vietnam has a weak and inactive link system when it comes to wood billets and other raw materials,” said Tran Thien, director of Thanh Hoa Co., Ltd.

According to Thien, the stages within the chain, from afforestation over processing to sales, are not defined. Vietnam’s timber industry, of which 95 per cent are private enterprises, “is still completely swimming by itself and lacks supportive policies from the government.”

Thanh Hoa, based in Ho Chi Minh City, supplies timber to nearly 70 furniture manufacturers and witnessed the breakdown of existing timber supply chains. After nearly 10 years of sticking to three projects between businesses and growers in the central province of Thua Thien-Hue, Thien had to give up the plan to develop sustainable material areas, as the loss amounted to nearly VND5 billion ($217,000), with more than 3,000 cubic metres of raw materials in stock.

In principle, the signing and implementation of contracts between raw material suppliers and furniture manufacturers must comply with the provisions of the law on economic contracts. Thien mentioned a “painful” situation as the implementation of contractual commitments is a weakness of many timber enterprises.

“The rights belong to the buyers and owners of the large processing companies, and they never give up their interests to be equal with the primary processors or the 1.1 million forest planters,” Thien said.

Vietnamese manufacturers of timber products meant for export have just experienced 2020 and made it through the year mostly thanks to a sharp increase in customers during the pandemic. Nevertheless, the internal report of the Vietnam Timber and Forest Product Association reaffirmed the importance of sustainable raw material supplies.

COVID-19 has disrupted the supply chains of timber from China, making it difficult for manufacturers that depend on this supply. Timber flows sourced from some of Vietnam’s main sources, such as Nigeria, were stopped because the governments of these countries ceased exporting and importing goods at the time of the outbreaks.

Timber suppliers in Vietnam currently only import enough goods for signed orders and did not sign new ones, especially with the African market out of fear that COVID-19 would hit again and continue to disrupt supply chains and cause risks to their businesses.

More than a year after the pandemic began, the export of wooden furniture in Vietnam continues to suffer under its negative impacts, also including afforestation households, primary processors, and importers of raw materials. For example, the output of the Tay Coc sawmill in the northern province of Phu Tho’s Doan Hung district has decreased by more than 60 per cent compared to 2019.

According to Nguyen Van Thai, owner of the sawmill, the price of timber has decreased sharply, and inventories remain fully stocked, so Tay Coc can only produce in moderation. In Doan Hung, the price of materials like round acacia timber has decreased by VND100,000 ($4.30) per tonne compared to before the pandemic. In particular, the price of wood chips has fallen sharply, from over VND800,000 ($35) per tonne to below VND700,000 ($30).

Thai said that these lower prices had a direct negative impact on afforestation households.

Nguyen Xuan Cuong, Minister of Agriculture and Rural Development, has more than once mentioned the deepening imbalance within the local timber industry. The north-central and central regions are lacking factories and industrial zones for the timber industry, while manufacturers are mainly located in the southern and eastern provinces. This, he argued, leads to low material purchases from farmers and does not speed up afforestation – the fundamental solution for Vietnam’s timber exports to develop sustainably.

Ambitious goals

Data from the Ministry of Agriculture and Rural Development shows that in 2020, the export value of forest products reached about $13.17 billion, exceeding the plan for last year by 5.4 per cent and representing an increase of 16.4 per cent compared to 2019, in which the export of timber and related products was estimated at $12.8 billion. But to achieve such figures, businesses had to spend about $2.58 billion on imports of timber and materials, up 11 per cent from 2019.

Exports of timber and products thereof are set to reach around $20 billion by 2025 – an ambitious goal, especially when considering that so far Vietnam has not identified opportunities to increase its share in the global market and raw material chains.

Now that COVID-19 is also back in Vietnam, the situation once again shows the importance of the domestic market as a platform for the timber industry. Vo Quang Ha, chairman of Tavico said, “This opportunity should be used to balance the interests of the different players in the timber industry.”

With these conditions, Ha found that many timber exporters also had plans to bring their products to the domestic market but faced many difficulties because they could not find suitable distribution channels and open shops for sale. Because of the high cost of premises, the resulting product prices would only lead to a loss of competitive advantages. In addition, the quantity of orders from domestic retailers is small and cannot relate to mass production.

Current development policies for the timber industry still focus on export processing but may require a more balanced policy to enable links in the chains to develop together. According to Ha, the timber industry should be divided into four chains that specify where the timber goes to.

“If the policy continues to focus on export, it will only take care of a quarter of the development target. But if the state makes policies suitable to the characteristics of each chain, it will help the whole industry to grow more sustainably,” Ha said.

Dr. To Xuan Phuc, an expert at Forest Trends, said that Vietnam needs a strategy for sustainable development of the industry, clearly defining product lines and strategic markets. Only then can the country accurately prepare the local timber industry for the global map.

Phuc also said that this period could be an opportunity for the Vietnamese timber industry to build new chains, with the government playing a leading role in creating priority conditions for businesses to participate in the supply of legal timber products, especially those derived from planted forests by households, which are preliminarily processed through household sawmills located in plantation areas.

“The Vietnamese government can also apply a public procurement policy to domestically produced products and introduce legal tender rules to encourage businesses and promote markets,” Phuc suggested.

Such an incentive, he believed, would help form links and domestic supply chains between businesses, processors, and reforestation households to serve the public procurement market, which is not small at all.

By Hai Van

Party delegates voted to adopt the Resolution of the 13th National Party Congress at the final session of the Congress held on February 1, 2021. — VNA/VNS Photo

HÀ NỘI — The Communist Party is aiming for Việt Nam to reach GDP per capita of $5,000 by 2025 and to be a developed country by 2045.

The goals are part of the Resolution of the 13th National Party Congress held from January 25 to February 1, the entirety of which has just been released by the Office of the Party Central Committee.

The Resolution noted the highlight of the 12th tenure was the successful handling of the COVID-19 pandemic resulting in significant economic achievements – including stable macroeconomics, controlled inflation and high GDP growth, while people’s living standards were improved. The fight against corruption, loss and waste was intensified, while the socio-political situation remained stable, foreign relations deepened and Việt Nam’s profile on the international stage grew.

However, numerous shortcomings – including slow modernisation and industrialisation, shifting in the growth model, limited competitiveness and quality and productivity of the economy, inadequate adaptation to climate change and environment protection demands, drawbacks in Party building and rectification, that science and technology has not been the driving engine of socio-economic growth and the lives of certain groups of people remain difficult – of the 12th tenure have been identified in the Resolution.

The achievements of 35 years of implementation of đổi mới (Reform), 30 years of implementing the 1991 Party Platform and in the 10 years of implementing the 2011 Revised Party Platform have proved that the country’s path towards socialism is consistent with Việt Nam’s practical situation and the times’ development trends, with the Party’s righteous leadership the leading factor in Việt Nam’s revolutionary victories, the Resolution reads.

Amid rapidly shifting and complex developments in the global scene, the Party Platform continues to serve as the ideological flag to gather the collective strength of united peoples for the goal of a “prosperous-people, strong-nation, democratic, equitable, and civilised” Việt Nam.

Development vision and orientations

In the coming years, the challenges and opportunities of a complicated world demand the entire Party and Vietnamese people to “unite” and continue to have major changes in mindset and make correct and timely forecasts of the situation to prepare and deal with any circumstance, to “bring the country forward on the path of rapid, sustainable development” and the attainment of many orientations, goals, and tasks.

The Resolution lists major guiding orientations of the years forward, including “persistent and innovative” implementation of Marxist-Leninism and Hồ Chí Minh ideology, persistent pursuit of socialism and independence and upholding national interests based on the principles of the United Nations’ Charter and international law and the spirit of equal and win-win co-operation, with national defence and security in mind.

It also aims to enhance patriotism, the spirit of resilience, national unity and people’s aspirations to develop a prosperous and happy nation, promoting socialist democracy, enhancing the quality of human resources and promoting innovation and science and technology – especially the achievements of the Fourth Industrial Revolution – in service of the country’s sustainable and rapid development.

In addition, Party building and governance are goals, working towards a streamlined and effective Party system with quality cadres and civil servants.

The “general objectives” are identified as improving the Party’s leadership and ruling capacity; building a pure, strong and comprehensive Party and political system; consolidating and raising people’s confidence in the Party, the State and the socialist regime; fomenting aspirations to develop a prosperous and happy country; promoting the will and strength of national solidarity; promoting comprehensive and synchronous đổi mới (reforms), industrialisation, and modernisation; building and firmly defending the Fatherland, maintaining a peaceful and stable environment; and striving to become a developed country with socialist orientations by the middle of the 21st century.

The “particular objectives” are set on Việt Nam becoming a developed nation with a modern industrial base and leaving the ranks of lower-middle-income countries by 2025 – the year marking the 50th anniversary of the liberation of the south and national reunification. By 2030, when the Party celebrates its 100th founding anniversary, Việt Nam is hoped to become a developing country with a modern industrial base and upper-middle incomes. By 2045, the 100th anniversary of the establishment of the Democratic Republic of Việt Nam, now the Socialist Republic of Việt Nam, Việt Nam is hoped to become a developed, industrialised nation with high income.

In 2021-25, the Resolution sets a target for average GDP growth of 6.5-7 per cent, GDP per capita by 2025 reaching $4,700-5,000, the contributions of total factor productivity (TFP) in economic growth reaching 45 per cent, the labour productivity increase hitting 6.5 per cent a year, urbanisation reaching 45 per cent, the ratio of processing and manufacturing industries in the GDP exceeding 25 per cent, and the digital economy accounting for 20 per cent of the country’s GDP.

In this time frame, the Resolution aims for agricultural labour ratio staying at 25 per cent, the ratio of trained labour reaching 70 per cent, urban unemployment kept at below 4 per cent, the rate of multidimensional poverty maintaining a decrease of 1-1.5 per cent year-on-year, aiming for 10 doctors and 30 hospital beds for every 10,000 people, striving towards 95 per cent of the Vietnamese population being covered under the State’s health insurance, life expectancy reaching 74.5 years, and the ratio of communes obtaining new rural standards reaching at least 80 per cent, including 10 per cent meeting the requirements of exemplary new rural standards.

In terms of environment, by 2025, the goals are to have 95-100 per cent of the urban population and 93-95 per cent of rural population having access to clean and hygienic water, 90 per cent of urban waste properly collected and treated, 92 per cent of active industrial-processing zones outfitted with proper wastewater treatment facilities; 100 per cent of all businesses polluting the environment punished; and upholding the national forest coverage at 42 per cent.

The 13th tenure has “six central tasks”, with the first being Party building, building rules-based socialist State, with effective, corruption-free governance. The second task is controlling the COVID-19 pandemic, ensuring COVID-19 vaccination coverage, while engaging in economic recovery, pursuing the transformation of growth model and economic restructuring, implementing national digital transformation strategy, raising labour productivity and innovation, and third is upholding independence, improving the effectiveness of foreign affairs and international integration, building modern and elite armed forces, and maintaining peaceful and stable environment for development.

The fourth central task is inspiring patriotism among the people to develop a prosperous and happy nation, promoting the role of cultural values and the strength of Vietnamese people in nation-building and defence, with detailed policies to develop the culture of ethnic minority groups, carrying out social policies and ensuring social security for the people, raising living standards and happiness indexes of the Vietnamese people. Fifth is perfecting the legal system, institutions, and policies to promote socialist democracy. The final central task is to strictly manage, reasonably and effectively use land and natural resources, protecting the environment, and implementing adaptation measures to cope with climate change and natural disasters.

Breakthrough strategies

To achieve the goals, the Party sets three major breakthrough strategies – completing development institutions, developing human resources, and building modern infrastructure.

Regarding institutions, the Party identifies the need to improve development institutions for a socialist-oriented market economy; reforming State governance towards modernity and competitiveness; improving the legal system and institutions to create a favourable, healthy, and fair business and investment environment for all sectors of the economy where innovation can foster; mobilising, managing and using all resources – especially land, finance, public-private partnership – for development purposes; bolstering reasonable decentralisation, while enhancing inspections and keeping powers in check via the legal system.

For human resources, the Party wants a priority on high-quality human resources for leadership and management and key positions, based on “comprehensive and radical transformation of education and training quality in tandem with recruitment and incentive policies”; promoting research, transfer, application and development of science and technology, innovation; promoting the aspirations for national development, people’s sense of unity and national pride in nation-building and defence efforts.

The Resolution also states the demand for “modern and synchronous” social and economic infrastructure, with a focus on national key transport projects, climate adaptation projects, and information and communications projects to serve national digital transformation and the development of a digital economy and society. — VNS