Switch Asia & the switch of Vietnamese SMEs

towards responsible wood processing & trading

Ngo Sy Hoai, Vice Secretary General,

Vietnam Timber & Forest Products Association (VIFORES)

1. Vietnam & the dynamism of its forest sector and wood industries

1.1. Vietnam in brief

1.2. Innovative processes/initiatives towadrs sustainable forest

management

2. Switch Asia catalyzed the switch of SMEs towards responsible wood

processing and trading

2.1. Brief introduction to Switch funded project

2.2. Switch Asia project and its catalyst role

3. The steadily growth of Vietnamese wood product export

4. Findings and recommendations

1. Vietnam & the dynamism of its forest sector &

wood industries

1.1. Vietnam in brief

Population: 90 million

Land area: over 33 million ha

GDP: USD 2,200/person/year (2016)

1986: Open-door policy (Renewal – “DOI MOI”,

the shift to market economy)

Forest land: 14 million ha

Forest cover rate: over 40% (2015)

Wood product export: US$ 7.0 billions (2015)

1.2. Innovative processes/initiatives towars

sustainable forest management

PFES – Payment for Forest Environment/ecosystem Services

• Started in 2010 (piloting)

• US$ 80 million in 2015, expected to be doubled into US$ 150 in 2020

• Service users/payers: Hydropower plants, water suppliers, ecotourism companies

• Service providers/recepients: Forest owners in attributed watershed areas

• Payment mechanism: VNFPDF & Forest Protection Contracts

PFES Rate

Introduction of REDD+ (Reduction of

emmission from deforestation and forest

degradation)

NRAP 2013 (National REDD+ Action PLAN)

PRAPs for selected/piloted provinces (Provincial

REDD+ Action Plans)

Capacity building for REDD+ implementation

(UN REDD Phase I, II, support provided by

Norway, JICA, FCPF etc.)

Pilot result-based payment (2016)

FSC/PEFC promotion

• 200,000 ha FSC certified, speed up certification;

• PEFC promotion;

• Farmer – enterprise partnership for forest

certification

Effective tool/market driver to boost commercial

plantation forestry development (not carrot or

stick, but dictatorship of buyers !!!).

Wood product import/export

• About 4,000 enterprises (mostly SMEs)

• 270,000 workers

• Export value: US$ 7 billions in 2015

• Annual growth rate: 15 – 20%

• Export to over 120 countries (US, EU, Japan, China…)

• Wood legality problems !!!

• FLEGT/VPA to be concluded with EC at the end of 2016

2.. Switch Asia catalyzed the switch of SMEs towards

responsible wood processing and trading

2.1. Brief in introduction to switch funded project

• Project title: Responsible wood processing and trading

promoted to SMEs of China, India and Vietnam

• Duration: 2009 – 2013

• Implementing agencies in Vietnam: WWF VN + VIFORES

• Budget (funded through VIFORES): Euro 150,000

• Targeted beneficiaries: forest product expert SMEs

2.2. Switch Asia project as a catalyst

• Support to revise wood industry development till 2020 and

vision to 2030 strategy, highlighting responsible processing

and trading practices;

• Engagement of SMEs in GFTN/VFTN for legal wood

sourcing;

• Awareness raising and introduction of EUTR, Lacey Act,

FLEGT/VPA etc;

• Facilitation of partnership between SMEs and small

householder groups to promote FSC/PEFC certification.

3. The steadily growth of Vietnamese wood

product export – a successful story of a

sustainable industry development in

developing countries

wood products export

2009 - 2014

2,60

3,44

3,96

4,67

5,56

6,23

Năm 2009 Năm 2010 Năm 2011 Năm 2012 Năm 2013 Năm 2014 Năm 2015 (F)

Source: General Department of Vietnam Customs

Unit: billion USD

2015 wood furniture exporters (US$ billion)

(Vietnam ranks number 4)

0

2

4

6

8

10

12

14

China Germany Italy Vietnam Poland Malaysia Canada Indonesia Denmark United

States

Turkey Sweden SE Asia

Key export markets of VN wood products 2015

US

36% Japan

15%

China

14%

South Korea

8% UK

4% Australia

3% Canada

2%

Germany

2% France

2%

Taiwan

1%

Others

13%

Source: General Department of Vietnam Customs

- US has been emerging as the largest market (US$ 2.5 billion, 38%),

followed by EU (US$ 1.2 billion, 19%), Japan (US$ 1.0 billion, 17%)

and China (US$ 871 million USD, 14%)

4. Lessons learnt and recommendations

A small/limited funding project may provide significant

contribution to an entire process by:

• Identification of selected interventions;

• Integration with on-going efforts/projects;

• Catalyzing/facilitating stakeholders’ efforts;

• Leadership of corporate association (VIFORES);