(BGO) - Declining revenue, worker layoffs and even production closures have been seen in many wood processing enterprises over the past time. However, some enterprises and establishments in Bac Giang province are still trying to find orders and maintain production with the hope of overcoming the difficult period soon.
Hung Muoi Co., Ltd in Ben Huyen village, Nam Duong commune is considered the largest wood processor in Luc Ngan district with three facilities specializing in the production of veneers and woodchips for export to Japan. The company has seen zero revenue for over a month. It now has an inventory of about 2,000 tons of woodchips and some of them have been moldy. Meanwhile, bank interest rates and other expenses must still be paid. Currently, the company has reduced production to about 30% compared to before and laid off workers.
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Thanks to diverse products and traditional partners, An Lam Co., Ltd. still has orders to maintain production. |
Nam Duong Quang Trung Co., Ltd. is also in a similar situation. In the same period last year, this company exported nearly 4,000 tons of woodchips, but only a few hundred tons have been sold since the beginning of the year.
Not only small-scale wood processing establishments and households are facing difficulties, some large-scale enterprises with modern machinery and equipment are also struggling to cope with order scarcity and plunging prices.
However, some enterprises are trying to maintain operations. An Lam Company Limited in Dai Lam commune, Lang Giang district is an example. At its peak time, it had more than 300 workers who had to work overtime almost every day, but now there are only 160 employees without extra work.
Nguyen Cong Thuc, Director of the company said: "Both the domestic and export markets are very gloomy, so the company's output is only 50% of the same period last year. The average selling price decreased from 65-70 USD per cubic meters".
According to Thuc, to survive this moment, the key is still orders. Enterprises that have been operating for a long time engage in deep processing and diversify products so they are able to maintain production in moderate quantities. In addition to traditional products such as brinex plywood and formwork, now the company has invested in technology to produce multi-layer laminated veneer lumber (LVL) plywood to replace sawn timber for furniture, shutters and container floors. Thanks to that, the company’s products are still exported to major markets such as Japan, the Republic of Korea, India, Thailand, Singapore and Malaysia. It is also actively approaching some new markets.
Bac Giang boasts 80,000 hectares of plantations supplying wood materials for processing, mainly in the districts of Son Dong, Luc Ngan, Luc Nam and Yen The. The main trees are acacia and eucalyptus.
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Hung Muoi Co., Ltd now has an inventory of about 2,000 tons of woodchips. |
According to Ha Minh Quy, Deputy Director of the provincial Department of Agriculture and Rural Development, there are 992 wood trading and processing establishments in the province. Raw materials for production are mainly planted forest wood and a few imported products such as veneer, plywood, formwork, woodchips and civil furniture. The biggest difficulty now is that the domestic consumption and export markets have dropped significantly compared to two years ago. In the first four months of this year, the wood export value only reached about 500 billion VND ($21.32 million), a year-on-year fall of nearly 50%.
To deal with the situation, the agricultural sector will closely coordinate with related industries to capture the needs of domestic and foreign consumption markets, especially new ones, and promptly inform them to businesses. At the same time, it asked credit institutions to increase loan limits, reduce interest rates, and extend debt payment for local wood processors. Tax authorities were also urged to cut some procedures when wood processing enterprises make tax declarations and claim refunds.
In addition, businesses need to actively look for sustainable cooperation partners, and in the long run, invest in modern production technology and large-capacity machinery to produce high-value and high-quality products.
