Due novel coronavirus pneumonia, Vietnam’s wood products processing suppliers adjust production structure

Due novel coronavirus pneumonia, Vietnam’s wood products processing suppliers adjust production structure.

Under novel coronavirus (covid19) pandemic, local timber processing enterprises need to continue to restructure their production and business activities to cope with the difficulties, according to MARD.

Restructuring will help businesses change their production and business plans based on current conditions, and prepare resources to continue production and operations immediately after the end of the pandemic.

The Ministry of Health says the covid-19 epidemic has spread all over the world and has a huge impact, including timber and forestry processing industries.

It recommends that associations and enterprises report to the people’s committees of the provinces and cities where the enterprises are located, as well as relevant ministries and departments, the difficulties caused by the 19th influenza. They should also propose solutions to national and local authorities in order to eliminate these difficulties and maintain production stability.

According to the association, five major markets account for nearly 90% of Vietnam’s exports of wood and wood products, including the United States (50%), Japan (13%), China (12%), the European Union (8%) and South Korea (8%).

Now, some U.S. ports have closed wooden furniture imports. At the same time, many EU countries have announced sales bans to prevent the spread of covid 19, so demand for non essential goods, such as wood products, will decrease in the next few months.

As a result, many enterprises in the export market, especially in the United States and the European Union, the two main export markets of Vietnamese wooden furniture, have announced to stop new orders or delay the import of wooden products, or even prevent the signing of import contracts.

This has brought losses to Vietnamese timber enterprises, which have prepared equipment and materials for the production of export goods in accordance with the signed contract. Now they have to stop work at the importer’s request.

The difficulty of exporting to the United States and the European Union has prompted many local enterprises to consider turning to the domestic market. However, this is not easy, because domestic customers have different needs and need different production technologies. On the other hand, there is no distribution system in the domestic market. The current difficult period is expected to last for 3-6 months or even longer, so enterprises will focus on reducing production costs.

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