1

VIETNAM WOOD INDUSTRY REPORT, Q2/2018

Abbreviation 3 2.3.1 History of formation and development 46

Executive summary 4 2.3.2 Value chain 47

1. Business environment 7 2.4.3 Production 48

1.1 Macroeconomic situation 8 2.4.4 Consumption 57

1.2 Legal framework 13 2.4.5 Import export 61

2. Market overview 25 3 Industry planning and outlook 76

2.1 Definition and classification 25 3.1 Industry development planning 76

2.2 Value chain 28 3.2. Outlook 78

2.3 World wood market 30 4 Enterprise analysis 81

2.3.1 Production 31 4.1 Enterprise introduction 81

2.3.2 Trade 37 4.2 Financial analysis 83

2.4 Vietnam wood market 45

Content

2

3

Content

GSO General Statistics Office of Vietnam CO., LTD Company Limited

GDVC General Department of Vietnam Customs IZ Industrial Zone

EUTR EU Timber Regulation SBV State Bank of Vietnam

CSIL Center for Industrial Studies IMEX Import Export

JSC Joint Stock Company VA Value Added

EVFTA EU – Vietnam Free Trade Agreement

4

Executive summary

Group of industrial wood (artificial boards) includes products such as

plywood, wood chip and fiberboard. Artificial board is the product

having the fastest growth rate,

Over the past 15 years, global wood chip trade has increased by nearly

75%, mainly due to the expansion of pulp production in China. China

and Japan are the two largest woodchip importing countries, followed

by Finland, Sweden and Turkey.

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Executive summary

Vietnam's wood processing industry has become a major export

commodity, ranking fourth only to coffee, seafood and machinery and

spare parts.

In 2017, Vietnam's concentrated forestation area was estimated at 241.3

thousand hectares, an increase of 1.2% compared to 2016.

The industrial production index of wood processing industry is estimated

at VND 266 trillion, up slightly by 8.2% compared to 2016.

Production of wood chips in Q1/2018 is estimated at 1.329 thousand

tons, down 22% over the same period in 2017..

According to the Vietnam Chamber of Commerce and Industry (VCCI),

the domestic high-end furniture market in 2017 is worth USD 2.5 billion,

with 80% of European imports and 20% of domestic production.

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Executive summary

Vietnam wood industry has many advantages compared to those of

other countries in the region due to

The US is Vietnam's most important timber export market. US trade

policy is moving in the direction of reducing trade deficit, trade

protection, encouraging domestic production.

With the FTAs in effect since 2018, the timber industry will enter a new

phase with many prospects for export growth.

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1. Business environment

1.1 Macroeconomic situation

1.2 Legal framework

Content

8

1. Business environment

1.1 Macroeconomic situation

Source: VIRAC, GSO

Source: VIRAC, GSO

GDP growth rate by quarter, 2015 - Q1/2018

VND billion

Production value of agriculture, forestry and fishery in Q1

(at comparative prices 2010), 2015 - 2018

Source: VIRAC, GSO

GDP structure at current prices, Q1/2018eContent is intentionally removed for demo purpose

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1. Business environment

1.1 Macroeconomic situation

USD

billion

Source: VIRAC, GDVC

Source: VIRAC, GDVC, GSO

USD

billion

Most exported commodities, Q1/2018

Vietnam import-export value, 2011 - Q1/2018

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1. Business environment

1.1 Macroeconomic situation

Source: VIRAC, SBV

VND/USD exchange rate, 2013-3/2018Content is intentionally removed for demo purpose

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1. Business environment

1.1 Macroeconomic situation

Oil prices

Source: VIRAC, Indexmundi

USD/barrel

World crude oil prices, 2011 - 3/2018

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Investment in wood exploitation and processing

1. Business environment

1.1 Macroeconomic situation

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1. Business environment

1.1 Macroeconomic situation

1.2 Legal framework

Content

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Domestic policies

1. Business environment

1.2. Legal framework

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1. Business environment

1.2. Legal framework

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1. Business environment

1.2. Legal framework

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International policies

1. Business environment

1.2. Legal framework

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1. Business environment

1.2. Legal framework

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1. Business environment

1.2. Legal framework

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1. Business environment

1.2. Legal framework

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1. Business environment

1.2. Legal framework

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1. Business environment

1.2. Legal framework

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Other regulations when exporting wood to European markets:

1. Business environment

1.2. Legal framework

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The impact of the Brexit event on Vietnamese timber exports

1. Business environment

1.2. Legal framework

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2. Market overview

2.1 Definition and classification

2.2 Value chain

2.3 World wood market

2.4 Vietnam wood market

Content

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2. Market overview

2.1 Definition and classification

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2. Market overview

2.1 Definition and classification

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2. Market overview

2.1 Definition and classification

2.2 Value chain

2.3 World wood market

2.4 Vietnam wood market

Content

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Value chain of wood industry

2. Market overview

2.2 Value chain of the industry

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2. Market overview

2.1 Definition and classification

2.2 Value chain

2.3 World wood market

2.4 Vietnam wood market

Content

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2. Market overview

2.3 World wood market – 2.3.1. Production

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Million

m³

2. Market overview

2.3 World wood market – 2.3.1. Production

Source: VIRAC, FAO

Source: VIRAC, FAO

Industrial wood production and consumption, 2011 - 2016

Industrial wood production structure by region, 2016

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2. Market overview

2.3 World wood market – 2.3.1. Production

Source: VIRAC, FAO

Industrial wood production structure by product, 2011 - 2015

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2. Market overview

2.3 World wood market – 2.3.1. Production

Source: VIRAC, FAO

Source: VIRAC, FAO

Top largest industrial wood producing countries in the world, 2016

Top largest industrial wood consuming countries in the world, 2016

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2. Market overview

2.3 World wood market – 2.3.1. Production

Source: VIRAC,CSIL

Global wood products production, 2003 - 2012

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2. Market overview

2.3 World wood market – 2.3.1. Production

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Source: VIRAC,CSIL

USD

billion

2. Market overview

2.3 World wood market – 2.3.2. Trade

Global trade value of wood products, 2008 - 2015

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Source: VIRAC, Forestryconnect

2. Market overview

2.3 World wood market – 2.3.2. Trade

Top the world's largest wood processing and exporting countries by volume, 2015

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2. Market overview

2.3 World wood market – 2.3.2. Trade

Source: VIRAC, Trade map

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2. Market overview

2.3 World wood market – 2.3.2. Trade

Source: VIRAC, Trade map

Source: VIRAC, Trade map

Global wood chips trade, 2010 - 2016

Structure of wood chips import in the world, 2016

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Source: VIRAC, Trademap

2. Market overview

2.3 World wood market – 2.3.2. Trade

tructure of world wood chip exports, 2016

Average price of wood chips exported by some large

countries, 2010 - 2016Content is intentionally removed for demo purpose

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2. Market overview

2.3 World wood market – 2.3.2. Trade

Source: VIRAC, FAO

Source: VIRAC, FAOSource: VIRAC, FAO

Top largest industrial wood importing countries in the world, 2016 Top largest industrial wood exporting countries in the world, 2016

Global industrial wood trade, 2010 - 2015

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USD

billion

2. Market overview

2.3 World wood market – 2.3.2. Trade

Source: VIRAC,CSIL

Global furniture trade, 2005 – 2017F

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Source: VIRAC, Trademap

Source: VIRAC, Trademap

2. Market overview

2.3 World wood market – 2.3.2. Trade

Top 10 largest wooden furniture exporters in the world, 2016

Top 10 largest wooden furniture importers in the world, 2016

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45

2. Market overview

2.1 Definition and classification

2.2 Value chain

2.3 World wood market

2.4 Vietnam wood market

Content

46

History of wood processing industry in Vietnam

2. Market overview

2.4 Vietnam market – 2.3.1. History of formation and development of the industry

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Value chain of wood processing industry in Vietnam

2. Market overview

2.4 Vietnam market – 2.3.2. Value chain of Vietnam wood industry

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Source: VIRAC, GSO

Source: VIRAC, GSO

2. Market overview

2.4 Vietnam market – 2.4.3. Production

Number of enterprises and employees in wood industry, 2010 - 2016

Allocation of timber enterprises by region, 2010 - 2016Content is intentionally removed for demo purpose

49

Source: VIRAC, GSO

Source: VIRAC, GSOSource: VIRAC, GSO

2. Market overview

2.4 Vietnam market – 2.4.3. Production

VND trillionScale of wood enterprises by investment and by

labor, 2015

Investment capital and fixed assets of the industry, 2010 - 2016

Total revenue and profit of the wood industry, 2010 - 2016

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50

2. Market overview

2.4 Vietnam market – 2.4.3. Production

Source: VIRAC, GSO

VND billion Production value of wood processing industry, 2008 - 2017e

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Wood chip industry

2. Market overview

2.4 Vietnam market – 2.4.3. Production

Allocation of wood chip producers by area, 2015

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2. Market overview

2.4 Vietnam market – 2.4.3. Production

Source: VIRAC, GSO

1000 tons

Wood chip production output in Vietnam, 2010 - Q1/2018

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Artificial board industry (industrial wood)

2. Market overview

2.4 Vietnam market – 2.4.3. Production

Source: VIRAC, GSO

1000 m³Artificial board production, 2010 - Q1/2018

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2. Market overview

2.4 Vietnam market – 2.4.3. Production

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2. Market overview

2.4 Vietnam market – 2.4.3. Production

Classification of enterprises by source of capital, 2015

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Source: VIRAC, GSO

2. Market overview

2.4 Vietnam market – 2.4.3. Production

1000 items

Source: VIRAC, GSO

Structure of wooden furniture production by product type, Q1/2018

Wooden product production, 2010 - Q1/2018

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Domestic consumption market of wood and wood products

2. Market overview

2.4 Vietnam market – 2.4.4. Consumption

Source: VIRAC, Vietnam Timber and Forest Product

Association

Giá trị Consumption đồ gỗ Việt Nam tại thị trường nội địa, 2006 – 2016eContent is intentionally removed for demo purpose

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2. Market overview

2.4 Vietnam market – 2.4.4. Consumption

Source: VIRAC, Tổng cục Thuế

Top largest timber enterprises in 2016

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2. Market overview

2.4 Vietnam market – 2.4.4. Consumption

Source: VIRAC, GSO

Source: VIRAC, GSO

Consumption value of wood chips, 2010 - Q1/2018

Consumption value of artificial boards, 2010 - Q1/2018

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2. Market overview

2.4 Vietnam market – 2.4.4. Consumption

Source: VIRAC, GSO

VND

billion

Consumption value of wooden furniture, 2010 - Q1/2018

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Source: VIRAC, GDVC, Vietnam Timber and Forest

Product Association

Source: VIRAC, GDVC, Vietnam Timber and Forest

Product Association

2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Export share of furniture in Vietnam and some South

East Asian countries by market, 2016

Structure of wood and wood products exported by category, 2017

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USD billion

Source: VIRAC, GDVC

2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Source: VIRAC, GDVC

Export value of wood and wood products of

Vietnam, 2011 - Q1/2018

Structure of export markets for wood and wood products Q1/2018

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Source: VIRAC, GDVC

2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Source: VIRAC, GDVCSource: VIRAC, GDVC

USD

million

Export value of wood furniture and wood products of

Vietnam, Q1/2017 - Q1/2018Export of wood and wood products by month, 2016 - 2018

Structure of contribution to export of wood and wood products of

Vietnam, 2013 - Q1/2018

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Source: VIRAC, GDVC

2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

USD

million

Source: VIRAC, GDVC

Wood product exports to the US market, 2015 - 2017

Wood exports to the US market, 2011 – Q1/2018

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Source: VIRAC, GDVC

2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Source: VIRAC, GDVC

USD

million

Commodity 2015 2016 2017

Value of Vietnamese wood products exported to ChinaUnit: USD million

Export turnover of wood and wood products to China, 2011 - Q1/2018

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Source: VIRAC, GDVC

2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Source: VIRAC, GDVC

USD million

Export share of wood and wood products to Europe by country, Q1/2018

Export turnover of wood and wood products to Europe, 2009 - Q1/2018

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2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Major commodities exported to the EU, Q1/2018 (Unit: USD thousand)

Source: VIRAC, GDVCSource: VIRAC, GDVC

USD thousand

Top exporters of wood and wood products to Europe, Q1/2018

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2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Strengths Weaknesses

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2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Opportunities Threats

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Source: VIRAC, GDVC, Vietnam Timber and Forest

Product Association

2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Source: VIRAC, GDVC, Vietnam Timber and Forest

Product Association

USD million

Wood chip exports by volume, 2010 - 2017

Wood chip exports by value, 2010 - 2017

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Source: VIRAC, GDVC

2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Source: VIRAC, GDVC

Source: VIRAC, GDVC

Top largest wood chip exporting enterprises, 2017

Structure of wood chip export markets by volume, 2017 Structure of wood chip export markets by value, 2017

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Source: VIRAC, GDVC, Vietnam Timber and Forest

Product Association

Source: VIRAC, GDVC, Vietnam Timber and Forest

Product Association

2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

USD

million

Export value of all kinds of boards in Vietnam, 2011-2017

Export of boards in Vietnam, 2013 - 2017

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Source: VIRAC, GDVC, Vietnam Timber and Forest

Product Association

2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Source: VIRAC, GDVC, Vietnam Timber and Forest

Product AssociationExport value of wooden furniture, 2010 - 2017

Export volume and value of wooden products, 2013 - 2017

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2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Export

Source: VIRAC, GDVC, Vietnam Timber and Forest

Product Association

Source: VIRAC, GDVC, Vietnam Timber and Forest

Product Association

Top 10 largest wooden furniture exporters, 2017

Export market structure of wooden furniture, 2017

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Source: VIRAC, GDVC

Source: VIRAC, GDVC

2. Market overview

2.4 Vietnam market – 2.4.5. Import export – Import

USD

million

Import of wood and wood products of Vietnam, 2010 - Q1/2018

Import market structure of wood and wood products Q1/2018

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3. Industry planning and outlook

3.1 Industry development planning

3.2 Outlook

Content

77

Industry development planning

3. Industry planning and outlook

3.1. Industry development planning

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3. Industry planning and outlook

3.1 Industry development planning

3.2 Outlook

Content

79

3. Industry planning and outlook

3.2. Outlook

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3. Industry planning and outlook

3.2. Outlook

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4. Enterprise analysis

4.1 Enterprise introduction

4.2 Financial analysis

Content

82

CompanyTotal assets

(VND billion)

Revenue

(VND billion)General information

Shing Mark Vina Co., Ltd.

Nitori Vietnam Processing

Enterprise

San Lim Furniture Vietnam

Co., Ltd

Poh Huat Vietnam JSC

Woodworth Wooden

(Vietnam) Co., Ltd

An Cuong Wood JSC

Timber Industries Co., Ltd.

Rochdale Spears Co., Ltd.

Johnson Wood Joint Stock

Company

4. Enterprise analysis

4.1. Enterprise introduction

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4. Enterprise analysis

4.1 Enterprise introduction

4.2 Financial analysis

Content

84

4. Enterprise analysis

4.2. Financial analysis

Gross profit margin, 2015 - 2016

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85

4. Enterprise analysis

4.2. Financial analysis

Cost of sales/Net revenue ratio

General and administrative expenses/Net revenue ratio

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.

4. Enterprise analysis

4.2. Financial analysis

Self-financing ratio, 2015 - 2016

Fixed assets turnover, 2015 - 2016

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4. Enterprise analysis

4.2. Financial analysis

Average charge, 2015 - 2016

Inventory days, 2015 - 2016

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4. Enterprise analysis

4.2. Financial analysis

Solvency, 2015 - 2016

Return ratio, 2015 - 2016

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Report Disclaimer

Report Disclaimer

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