Vietnamese wooden furniture makers’ profits are less than 5 percent since 80 percent of the raw materials have to be imported, according to the Vietnam Timber and Forest Product Association.
The dependence on imports is pinching them especially after the prices of timber in main supply markets like China, the US, and New Zealand have spiraled by 15-30 percent this year.
Pine and oak have seen the greatest rise, Tran Duc Sinh, the chairman of Viforest, as the association is known, said.
Exports of wooden furniture were worth $1.82 billion in the first eight months, up 20 percent year on year.
The industry hopes to increase that to $3.1 billion for the year and has enough export orders on hand to hit the target.
However, more than 6.4 million cubic meters of wood is required for that while domestic supply is only around 1.6 million cubic meters.
Besides, since the local supply is sourced mostly from young forests, the wood quality is low and only really suitable for the paper industry.
The Vietnamese government limits commercial logging to 300,000 cubic meters a year to prevent over-exploitation.
But in 2012 it will be calculated differently, ensuring domestic supply will partially replace imports, Thoi Bao Kinh Te Sai Gon Online (The Saigon Economic Times Online) quoted Pham Minh Thoa of the General Forestry Department as saying.
Local supply will also be augmented under a pilot project on sustainable forestry exploitation and management, following the international Forest Stewardship Council (FSC) model, she said.
FSC certification is required by major furniture importers like the US and European countries as a measure against illegal logging but, a condition most Vietnamese timber suppliers have yet to meet.
Vietnam ranks second in Southeast Asia in terms of wood products export, shipping its goods to 120 countries.
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