Spectacular growth of Binh Dinh wood sector is fueled by the US market

According to Le Minh Thien, head of the Binh Dinh Wood and Wood Products Association, wood exports now account for 70% of the entire export value of Binh Dinh. Exports of the interior, outdoor, and garden furniture were USD 239 million, up 49 percent year on year. Other wood items such as chips, pellets, among others increased by 2%; products made from plastic knitting (fake rattan goods) increased by 68 percent.

Thien added that the sector achieved such good results as a consequence of the US's robust demand for interior wooden furniture, while demand from the EU, the United Kingdom, and Australia remained steady.

As worldwide demand for furniture and wood goods continues to increase, export wood processing companies in Binh Dinh are attempting to stabilize production amid the Covid-19 epidemic and continue to push wood product exports until the end of the year.

Do Xuan Lap, head of the Vietnam Timber and Forest Product Association, believes that the Binh Dinh wood sector will continue to operate in a stable manner. However, about 40% of companies in Binh Dinh are experiencing labor shortages.

“The majority of workers in the Binh Dinh wood industry are from rural regions. While many municipalities across the province are enforcing social separation orders in accordance with Directive 16 in order to prevent and manage the Covid-19 epidemic, which impedes laborers' movement from home to work. Additionally, since most laborers are scared of contracting the virus, they choose to remain at home, resulting in a personnel shortage,” Lap explains.

According to the organization, global demand for timber goods is enormous, and Vietnam has undergone extraordinary changes to accommodate such a large volume of orders. While many large-scale wood processing businesses in the South are presently unable to operate owing to the effect of the Covid-19, export wood in Binh Dinh is drawing an increasing number of customers.

In this environment, many export wood processing companies in Binh Dinh are attempting to sustain output in accordance with the "three on-sites" motto in order to satisfy market demand. Enterprises develop particular strategies for arranging employees and people to work while yet adhering to the distance requirement.

Indeed, businesses must withstand many extra expenses in order to sustain production in the new environment. When manufacturing employees follow the "3 on-sites" motto, the company incurs additional expenses for meals, training, power, and water. However, companies' primary concern today is the expense of SARS-CoV-2 rapid testing for employees who remain on-site.

“If a company employs 1,000 people, the entire cost of rapid testing would exceed VND1 billion. Employees are required to undergo quick testing four times each month in order for the company to be reimbursed VND 5 billion for the job. If the medical industry popularizes fast testing methods for company medical personnel, companies may purchase quick test kits in accordance with the functional industry's recommendations and provide the test to workers in accordance with rules. It will significantly decrease manufacturing expenses during the epidemic season," Do Xuan Lap proposed.

“In this scenario, if any company has developed technology, labor demand will decline in accordance with the new reality. As with Tien Dat Wood Industry Joint Stock Company, the last several years have seen a shift toward modernisation of the whole manufacturing line. Previously, the business employed 4,800 workers, but now only 1,200, which creates an advantageous situation for implementing the production gap. Tien Dat Wood has exported USD25 million since the beginning of the year; by the end of the year, we want to export another USD18 to 20 million," stressed Do Xuan Lap, Chairman of the Vietnam Timber and Forest Products Association.