Mr. Ngo Sy Hoai - Vice President and General Secretary of Vietnam Timber and Forest Products Association

Wood and wood products are one of the strong export products to the UK market when UKVFTA opens preferentially with a tax rate of 0% for 5 years. Up to now, how has the wood industry taken advantage of incentives from UKVFTA in export activities?

Statistics show that in the first 9 months of this year, we exported nearly 140 million USD of wood products to the UK market, and about 30 million USD of non-wood forest products. Thus, the total export turnover of the wood industry from Vietnam to the UK market is about 170 million USD, and it is forecast that this year we can export about 230 million USD to the UK. Accordingly, exports of wood and wood products to the UK are scarce, accounting for about 1.5% of Vietnam's total turnover of wood and wood products. Thus, our total export value to the UK market is equivalent to 1% of this country's total import value. Vietnam's exports of wood products to the UK are higher than the average of all our industries. However, the above number is still very modest.

After the implementation of UKVFTA, we think there will be two quite positive impacts on the wood industry. First of all, as a direct impact, we will enjoy preferential tariffs for all wood products within the next 5 years with a rate approaching 0%, so we have a comparative advantage compared to other countries that are also developing. export this product to the UK market. Second, I think much bigger is the spillover effect. The UK is a country with a very early and developed wood processing and trade industry and the UK is the gateway to the EU, and even to the rest of the world. So once we have brought the product into the UK market we have also proven our capabilities and there is no reason why we cannot bring the product into the rest of the world.

However, the challenge of developing the market and brand in the UK for the Vietnamese wood industry is huge when the UK announces a bill on combating deforestation and forest degradation?

As we know, the UK is a country with a very early developed wood industry, so they often consider very carefully when making a decision to quickly export a wood product to this market. In addition, the UK is a country that is particularly interested in issues related to minimizing the impact of climate change, preserving biodiversity, preserving forests and reducing greenhouse gas emissions. Although it has left the EU, the UK's interest in global initiatives and processes related to environmental protection probably will not end, and may even increase further.

Notably, the EU recently passed regulations on combating deforestation and forest degradation. Although the UK is not a member of the EU and has no obligation to implement these new regulations and agreements, I think they will comply. pursue the regulations set forth by these legal documents. Therefore, when exporting wood to the EU market, in addition to the quality and competitiveness of the product, we need to pay special attention to issues related to legal wood to ensure that the wood materials we use are The products we process for export to the UK market must be legally exploited products.

Besides, we need to comply with a series of other regulations such as regulations on greenhouse gas emission reduction, CO2 reduction regulations and regulations on green production and green trade. So our challenges are many, but I also completely believe that Vietnamese businesses with real capabilities have been confirmed in the market for nearly 20 years. Furthermore, with the presence of our wood products in many demanding countries including the UK, stories related to environmental barriers, sustainable forest management, and biodiversity conservation are emerging. We can overcome this by studying and green trade for wood products.

Regarding the issue of branding to increase market share in the UK market, what solutions do you think the wood industry needs?

Currently, there are two difficulties in branding the wood industry. Firstly, most of our businesses produce according to orders and designs from foreign customers. We have not proactively launched models and designs with Vietnamese cultural values. Meanwhile, the cost we spend to have the copyright to produce chairs and tables is higher than the profit we receive from that product.

Second, our trade promotion capacity is still limited both at the national level and at the association and business level. Because trade promotion capacity is still so limited, we still do not have a national brand for Vietnamese wood products, nor a brand for each business or each product. Because our trade promotion capacity is still weak, we are often passive, waiting for customers to come and they give us designs to request processing, we have not proactively researched and approached each customer. and get make-up products in Vietnam.

From that reality, we need to strengthen Vietnam's trade promotion and branding capacity. However, it cannot be resolved overnight and requires the participation of ministries, branches and businesses. In recent years, we have noted that ministerial agencies, for example, the Department of Trade Promotion, Ministry of Industry and Trade, have made great efforts to organize business-to-business meetings, forums, and exchanges with other agencies. Foreign representative offices, majestic and large-scale fairs attract customers to Vietnam and interact with Vietnamese businesses.

Viet Nam Wood and Forest Products Association is also paying special attention to strengthening trade capacity, proactively organizing large fairs. Because, this year we have quite a few fairs on exported wood products, machinery and wood processing technology so that Vietnamese manufacturers can access customers, technology, equipment and products. Have direct communication with buyers.

For businesses, we see that businesses have not focused on training human resources with passion and talent to be more proactive in designing models and building brands. If we continue to accept business as it is now, without strong transitions to in-depth development, it will cause disadvantages for products in the UK market as well as the effort and costs spent.

Therefore, at the same time as investing in production to meet market standards, when receiving foreign orders, it is necessary to improve corporate governance, strengthen marketing capacity, and trade promotion. and pay attention to long-term brand building. If you want the benefits in each product to be commensurate with your efforts, you need to invest in those factors. Maybe it's an invisible value but it's very important for us in the long run.

In the coming time, ministries, branches, associations and businesses need to have better connections so that we can really send out a really strong message about the supply chain of wood products in the Vietnamese market. The world, including the UK market, is a very transparent supply chain, ensuring full compliance with Vietnamese law as well as the international commitments we have signed.

Thank you Sir!

Minh Toan