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Foreign investment increases in VN wood processing industry

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Foreign investment in the wood processing industry in Vietnam has increased significantly in recent years. VIETNAM NEWS AGENCY/VIET NAM NEWS

Foreign investment increases in VN wood processing industry

Foreign direct investment (FDI) in the wood processing industry has increased rapidly, especially since last year, the Vietnam Timber and Forest Product Association has said.

In the first nine months of the year foreign investors had registered to invest the same amount as in the whole of 2018, it quoted the Ministry of Planning and Investment’s Foreign Investment Agency as saying.

A report on foreign direct investment in the wood processing industry by To Xuan Phuc of Forest Trends, Cao Thi Cam of VIFORES, and Tran Le Huy of Forest Product Association of Binh Dinh showed that FDI projects have been and would continue to be an integral part of the wood processing industry.

“Last year 529 foreign enterprises were directly involved in exports worth nearly $3.96 billion, or 46.7 per cent of the industry’s exports.

“In the first nine months of 2019, the number of foreign enterprises directly participating in exports increased to 565, with their exports being worth nearly $3.4 billion.

“[Besides], many other foreign enterprises are now providing materials to processing enterprises and providing logistics services and other types of services.”

Low labour costs, easy access to raw materials, favourable infrastructure, and preferential tariffs due to free trade agreements the country has signed are among factors that make the industry attractive to foreign investors, it said.

The Sino-US trade war could create new opportunities for foreign investment in the industry, it added.

Binh Duong Furniture Association chairman Dien Quang Hiep said foreign investment in the industry, especially in the context of the trade war, is also causing concern, especially about origin fraud.

In addition to the government’s efforts, the industry association must also proactively detect origin frauds to notify authorities, Hiep said.

In addition to encouraging foreign investment in the wood processing industry, there should also be policies to encourage the development of local companies, he said.

Vietnam Administration of Forestry deputy director-general Cao Chi Cong said wood and forest product exports are expected to meet the government’s target of $11 billion this year.

“Vietnamese wood products are available in over 120 countries and territories. The country is the largest exporter in Southeast Asia, second largest in Asia and fifth largest in the world. This is a very proud achievement.”

VIET NAM NEWS/ASIA NEWS NETWORK

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