China has invested in 29 plywood projects worth over US$150 million in Vietnam, becoming the country’s largest plywood investor.
Speaking at a conference to promote Vietnam’s plywood and medium-density fiberboard industry in the context of Covid-19 that was held in HCMC on July 6, Ngo Sy Hoai, vice chairman of the Vietnam Timber and Forest Products Association, noted that Vietnam has attracted 53 foreign investment plywood projects worth a combined US$276.5 million.
In the first half of 2020 alone, the country attracted 35 foreign investment projects in the wood industry, including two plywood projects with a total investment of US$14 million.
Besides being the largest investor, China is also Vietnam’s largest plywood supplier, accounting for some 90% of the country’s plywood imports. In 2019, China exported plywood products worth more than US$188 million to Vietnam.
Increasing foreign investments, especially from China, have boosted Vietnam’s plywood exports in recent years.
However, several countries, including the United States and South Korea, have begun investigations into the evasion of antidumping duties on plywood products from Vietnam.
South Korea has imposed an anti-dumping duty of 9.18-10.65% on plywood imported from Vietnam.
The US Department of Commerce (DOC) on June 9 said it would examine plywood products from Vietnam, one of the products which saw the sharpest export growth rate to the US in recent years.
The decision about the investigation was made based on accusations of trade fraud related to products from Vietnam to the US.
Do Xuan Lap, CEO and president of Tien Dat Furniture, said the move will severely affect Vietnam’s woodwork industry. If the US imposes anti-dumping duties, not only export companies but also forest planters who provide materials to make plywood will suffer.
“The impact will be extreme,” Lao said. “Woodwork companies will have a meeting to discuss the issues related to plywood later this month. We will discuss the hiring of a lawyer. “
According to the Vietnam Timber and Forest Products Association (Vifores), about 400 companies export plywood, mostly to the US. The export amount is 2 million cubic meters and export turnover is $678 million a year.
Vu Hai Bang, CEO of Woodland, said since late March, after information that the US would conduct an investigation on plywood imports, Woodland’s exports to the market dropped by 75 percent.
Bang went on to say that the decision would not only affect plywood production companies, but also companies using the product to make wooden furniture for export to the US.
This also gives favorable conditions for the American Kitchen Cabinet Alliance to sue Vietnam’s companies. Kitchen cabinets, one of the products exported in large quantities recently, use plywood.
According to Vifores, in the first four months of 2020, while office furniture exports decreased by 13 percent, and bedroom furniture by 11 percent compared with the same period last year, other items such as kitchen furniture, furnishings made from other types of wood and furniture parts saw increases of 58 percent, 4 percent and 22 percent, respectively.
“Our company and other businesses will suffer heavily if kitchen cupboards are also subject to investigation,” Bang said.
Lap said if the US investigates further, this will affect all of Vietnam’s wooden furniture exports, worth $2-3 billion.
Vifores predicted that woodwork exports may have zero percent or minus growth rate this year because of Covid-19.
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