Expanded market - a key for sustainable development of Vietnam’s wood chip industry

Vietnam’s wood chip companies would pay more attention to diversify their importers instead of heavily relying on some conventional importing market as currently, said Thang Van Hoa, chairman of Vietnam Wood chip Association under Vietnam Timber and Forest Product Association.

Companies were making efforts to seek new importers including South Korea, the US, EU and Japan, of which Japan was considered the most potential one, Hoa said.

For the last decade, Vietnam has become the biggest wood chip exporter in the world as exporting about 12 million tonnes of wood chip yearly, equally to 24 million cubic metres of round timber.

In the first seven months of 2020, Vietnam exported over 6.9 million tonnes of wood chip, earning about US$923 million.

“Until now, the wood chip industry is an important part of Vietnam’s timber industry,” Thang said, adding that on average, wood chip export revenue was about $1.5 billion yearly, accounting for 15-18 per cent of the country’s total timber export revenue.

For years, chip wood processing and export helped expanding area of plantation forest in Vietnam as plantation forest provided input material for the wood chip industry, of which, acacia wood account 70 per cent, Eucalyptus 27 per cent and 

Melaleuca only 3 per cent. It is reported that Vietnam’s plantation forest area keeps expanding, on average 150.000-200.000 ha per year.

Thus, the wood chip industry also directly affects the livelihood of millions of forest-growing households, most of them are poor households in mountainous areas.

According to Forest Protection Department, currently, about 1.1 million households nationwide are growing the wood raw material in the area of over 1.7 million ha, of which, the forest was formed in over 1.4 million ha.

“Wood chip industry consumes a large volume of wood from plantation forest, which created important motivation for the expansion of plantation forest as well as helped improve the livelihood of millions of households,” said Hoa.

Recently, wood chip price sharply fell, negatively affecting the operation of enterprises, households and Vietnam’s wood export revenue, Hoa said, blaming for decreased demand of the paper market and the COVID-19 pandemic that hindered marine transportation.

According to the chairman of Vietnam Wood chip Association Thang Van Hoa, the association planned to encourage its members to diversify their products so that Vietnam’s wood chip industry could further integrate into world stage in coming time.

The wood chip can be used to make medium-density fibreboard (MDF), wood pellets and pulp but each product require particular quality of the wood chip. Thus, wood chip producers would have to study and supply suitable products, Hoa said. 

Hoa also said that localities with a large area of plantation forest should have more mechanisms and policies to attract more investment in the deep processing industry. Besides, priorities should be given to infrastructure development, logistics, land lease and linkage between production and consumption as well as the linkage between the wood chip industry and deep processing industry.