Pham Minh Duc, an expert from World Bank (WB) told this at a conference on economic and timber business sector prospects in Ho Chi Minh City on August 7.
Duc explained that according to TPP regulations timber products have to achieve a localization rate of 55% and Vietnamese enterprises are allowed to import a maximum of 45% of materials from outside the TPP bloc. Achieving this localization rate is a major obstacle for wood products to comply with.
A report by WB research experts shows that over 80% of materials needed by Vietnamese wood processing firms are imported from foreign countries. On average, Vietnam has imported nearly 3.5 million cubic metres per year, of which, sawed timber imports serving the processing industry accounted for 65%, well over the allowed localization rate.
Despite facing many difficulties in the long term, development prospects, Duc predicted a bright outlook for the timber processing sector while emphasizing the Government‘s important role in stimulating the growth of the industry.
Phan Chi Dung, head of the Ministry of Industry and Trade'(MoIT) Light Industry Department suggested that the State should create more favourable conditions for Vietnamese enterprises to access loans to utilise as capital to develop the sector and implement other incentives.
The timber processing sector is one of the major revenue contributors to the country’s GDP. According to the MoIT, wood export turnover surged 19% to US$5.7 billion in 2013. The sector is expected to hit a record US$6.5 billion in gross revenues for 2014.