Wood enterprises: Solving the problem of increasing productivity
The wood industry is now facing many advantages and challenges. According to Binh Duong Furniture Association (BIFA), the country's wood industry is ranked 4th in the top exporters of wood and wood products in the world. In the next time, wood enterprises need to increase their productivity to gain more competitiveness in the market.
Challenges from material resources
Luong Ngoc Kim - Director of Kim Thanh A Company said that wood products from rubber wood is now very popular on the market. Many wood enterprises in Binh Duong are lack of rubber materials for their export orders. According to Mr Kim, some countries in the region, such as Malaysia, Laos and Cambodia, have limited the export of these materials to ensure the materials for their manufacture.
China also prohibits to harvest natural forests, so the demand for raw materials for manufacturing in this country is very large. For the past time, many wood enterprises have been worried about Chinese traders as they boost purchasing rubber materials.
Huynh Quang Thanh, Chairman of the BIFA shared that Vietnamese timber enterprises have proposed the Government to issue necessary sanctions to keep raw materials in the country. Everyone is aware that exporting raw materials brings back less value than making products for export. But this will affect the interests of forest planters, as the price of timber materials highly increases, it can not prohibit them to sell their timber materials to foreign traders.
The price of rubber material has increased by 20-30% compared to the same period of 2016, the sawmilling markets in North America, Northern Europe, China etc have also increased sharply from 6-13%. Therefore, businesses need to be proactive the material resources in the long run. If they don’t do this, they will have many difficulties themselves.
Luu Phuoc Loc, Director of Mtrade Co., Ltd said that enterprises can only use melaleuca for some components of their products, rubber materials are still very necessary for their manufacturing activities. According to the Vietnam Rubber Group, the resource of rubber wood liquidate at the peak of the period 2020-2025 with a volume of 12,000 hectares per year, through this period, the resource of rubber materials will fall sharply to only 6,000 ha each year. While waiting for the Government adjust the strategy of developing the plantation areas for timber materials, enterprises should promote the increase of labor productivity to reduce price and production costs, enhance competitiveness etc as material resource is gradually become scarced.
Proactively restructure and linkage
According to Nguyen Liem from Lam Viet JSC, and the statistics, the whole country's labor productivity is very low only 1/10 compared with Korea, 1/5 compared with Malaysia, 1/15 compared with Singapore etc. Therefore, restructuring enterprises and adjusting personnel to increase labor productivity are very necessary in the current context.
According to Nguyen Phuc - Secretary General of the BIFA, there are many measures to promote the productivity such as expanding plants, investing machinery and equipment; improving the management quality, continuously innovating new products etc. However, the priority of capital investment is not the most effective measure.
In fact some wood enterprises in Binh Duong have simple equipment, they can still make high productivity, good efficiency and much profit. Enterprises need to determine whether their enterprises have exploited their available potentials, weak points, the points which reduces labor productivity to facilitate the restructuring the enterprises.
Huynh Quang Thanh added that the BIFA has done business trip to Italy to learn experience. The survey shows that the scope of their production plants even is much smaller than some wood enterprises in Binh Duong. Machinery, equipment and technology of Italian enterprise is not more modern than domestic enterprises, however their productivity is very high.
The main reason is that the Italian wood industry is professionally assigned. Each company only produces one or two components in the production chain, so even Italian large groups only have much smaller scope of factory than Binh Dương wood enterprises. Saving a lot of costs for factories, labors etc helps Italian wood industry in the top of the export market.
The idea of promoting the links is approved by Binh Duong wood enterprises in the context of wood industry which is facing all the difficulties. According to the BIFA, the links will be implemented step by step, firstly, it focuses on the material resources for production. Nextly, the BIFA also has to learn the Italian linkage model, assigns and specializes each product etc for each enterprise. This linkage can only succeed when the timber business community towards the common view in the whole country and have belief in each other.
Origin: No. 93. VIETNAM TIMBER & FOREST PRODUCT ASSOCIATION.