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PRIME MINISTER
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SOCIAL REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No. 08/CT-TTg

Hanoi, March 28, 2019

 

DIRECTIVE

ON A NUMBER OF RAPID AND SUSTAINABLE DEVELOPMENT TASKS AND SOLUTIONS FOR PROCESSING INDUSTRY OF TIMBER AND NON-TIMBER FOREST PRODUCTS FOR EXPORT

Timber and non-timber forest products are the Vietnam's 6th important exports and continuously have high growth rates, averaging over 13% per year in the 2010-2018 period. In 2017, the processing industry of timber and non-timber forest products for export achieved a total export turnover of over 8 billion USD with timber and timber products reaching 7.66 billion USD, up by 10.2% compared to 2016, reaching 3 years ahead of the target set in the Forestry Development Strategy for the 2006 – 2020 period. In 2018, the export turnover of processing industry of timber and non-timber forest product reached over 9.38 billion USD, up 15.9% compared to 2017, accounting for more than 23% of export value of the sectors of Agriculture and Rural Development with timber and timber products reaching about 8.909 billion USD, the trade surplus value of forest products in 2018 reached over 7 billion USD, accounting for 85% of the forestry industry's trade surplus value. Vietnam’s timber products have exported to 120 countries and territories, ranking 2nd in Asia and 5th in the world in terms of export turnover; accounting for 6% of global timber product market share and there are plenty of rooms for development.

With about 4,500 enterprises, attracting tens of thousands of workers and over one million farming households planting forests for raw material, the processing industry of timber and non-timber forest products has really become a spearhead economic sector of Vietnam. Development of the processing industry of timber and non-timber forest products for export to promote the development of afforestation, protect environment, create sustainable livelihoods for rural and upland households and contribute to successful implementation of the restructuring process of the forestry industry.

Despite  remarkable achievements, the processing industry of timber and non-timber forest products is facing many challenges and difficulties such as: limited raw materials granted sustainable forest management certificates; incoherent chain linkages from breeding to processing and export between forest growers and enterprises; silviculture infrastructure has not been paid due attention; tax policy and land concentration for development of raw materials are still inadequate, small enterprises have difficulty in accessing credit source to invest in production and business expansion; the investment in developing enterprise brands and national brands on timber products has not been given adequate attention; the impact of international trade conflicts as well as regular changes and adjustments to policies of countries exporting raw materials and importing timber products significantly affect the processing industry of timber and forest products; free trade agreements and treaties to which Vietnam is a party are both opportunities and challenges for Vietnamese timber and forest product processing enterprises.

To promote the achieved results; overcome difficulties as well as potential challenges and risks to make a rapid and sustainable development of the timber and non-timber forest product processing industry for export.

The Prime Minister asked ministries, branches, localities and enterprises to well implement the following contents:

I. VIEWPOINTS AND OBJECTIVES

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2. In the next 10 years, the processing industry of timber and non-timber forest products will become a key economic sector in production and export of Vietnam; building a Vietnamese brand of timber and non-timber forest products, striving for making Vietnam to become one of the world's leading countries in production, processing and export of timber and non-timber forest products.

3. Striving to bring the export turnover of timber and non-timber forest products in 2019 to 11 billion USD, reaching 13 billion USD by 2020 and reaching 18-20 billion USD by 2025; gradually increasing the export density of Vietnamese deep-processing products with high added value in the total export turnover.

II. TASKS AND SOLUTIONS

1. Strict implementation of the Forestry Law adopted by the National Assembly in 2017 and a system of documents providing guidance on the implementation of the Law, with the request for administrative procedure simplification, creating a favourable investment environment for people and enterprises operating in the processing industry of timber and non-timber forest products for export and sustainable forestry development; developing forestry development strategy in the 2021 – 2030 period; reviewing and completing forestry planning; planning for development of raw material areas and developing processing industry in accordance with new context of the Forestry Law.

2. Maintaining funding policies, enabling enterprises to access land funds and premises to invest in building wood processing factories and facilities. Encouraging and supporting linkage between enterprises to create a centralized area of timber supply and processing (including service industrial zone supporting timber processing), the State allocates investment capital source or supports enterprises to build a large-scale timber import and distribution centre (timber and wood raw material wholesale market), which supplies raw materials for facilities associated with industrial and small-scale industrial zones of timber and non-timber forest product processing.

3. Increasing investment in research and application of science and technology to processing of timber and non-timber forest products for export; bringing creative thinking into Vietnamese timber products, strengthening the capacity of designing and creating Vietnamese high-value products, turning a Vietnamese brand of timber and non-timber forest products into a driving force for processing industry growth of timber and non-timber forest products in upcoming time.

4. Promoting large-timber afforestation and supplying timber raw materials granted sustainable forest management certificates as required by international markets; researching and applying science and technology to production of raw materials, breeding, control and quality assurance for afforestation, intensive afforestation, forest care, timber exploitation to improve productivity, quality and value of forests; developing a stable material area to meet the increasing demand for raw materials of timber and non-timber forest product processing industry, serving domestic market and export.

5. Development and replication of value chain linkages between forest growers and processing enterprises. Promoting training of human resources, especially high-quality human resources for timber processing industry.

Prioritizing investment in leading research and training centers to create high value-added products; strengthening linkages and coordination between enterprises and training centers, focusing on synchronous training and harmonious combination of university, technical and vocational education in accordance with actual development and technology needs of the timber and non-timber forest product processing industry.

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7. Promoting market development, building and advertising Vietnamese brands of timber and non-timber forest products; building market information system and product standards, promoting e-commerce for timber and non-timber forest products; well implementing the agreements that Vietnam has signed and pay more attention to the domestic market; giving priority to resources for domestic and foreign trade promotion programs, investing in large-scale exhibition centers that are commensurate with development potential of timber processing industry, upgrading the VIFA - EXPO Fair in Ho Chi Minh City to the international fair of Vietnam timber processing industry in association with honoring prestigious brands during the year.

8. Good implementation of propagation, popularization and mobilization of people and enterprises to change their awareness of legal timber use and to use planted timber instead of natural timber, change from extensive to intensive cultivation, production of small timber and large timber is combined to ensure raw materials to meet development need of timber processing industry towards diversification of timber and products, including indoor and outdoor furniture, wood planks, woodchips and wood pellets, of which indoor and outdoor furniture products with high added value account for large percentage. Promulgating the public procurement policy prioritizing over use of legally and environmentally sustainable timber products from timber planted and produced in Vietnam to promote development of the domestic timber market.

9. The associations of timber and non-timber forest product processing enterprises shall take the initiative in integrating and fully making their international commitments and complying with international law; improve production capacity, innovate technology and corporate administration, create new high-quality products to meet requirements of domestic and international markets; propagate and mobilize members to promote legal and sustainable timber production and trading, "say no" to illegal timber.

III. IMPLEMENTATION

To develop a rapid, efficient and sustainable processing industry of timber and non-timber forest products for export, the Prime Minister requests ministries, branches, localities, enterprises and associations to urgently implement the following key tasks:

1. Ministry of Agriculture and Rural Development shall:

- Preside over and cooperation with concerned ministries and branches in studying and adjusting mechanisms of and policies on land, applying scientific and technological advances to production from seeding, planting and tending forests to product processing and the policy linking between forest growers and processing enterprises in accordance with forest product value chain.

- Preside over and cooperation with the Ministry of Industry and Trade, Ministry of Finance and other concerned ministries and branches in studying and adjusting mechanisms of and policies on  human resource training, investment, tax, administrative procedure simplification, development of supporting industry and logistics for sustainable development of timber and non-timber forest product industry.

- Prepare and submit the Project on development of forestry sector to become a sustainable forestry economic sector in accordance with the Forest Law, new context, free trade agreements (FTA) and other treaties to which Vietnam is a party to the Prime Minister.

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- Preside over and cooperation with the Ministry of Planning and Investment, Ministry of Finance, Ministry of Industry and Trade and other concerned ministries and branches in identifying priority programs and projects for investment in development of key areas in order to create a rapid and sustainable development of timber and non-timber forest product processing industry for export.

- Cooperate with concerned ministries and branches to submit the VPA / FLEGT Agreement with the European Union to the Government for approval; proactively negotiate on mutual recognition among countries of legal timber regulations to develop export markets for timber and non-timber forest products.

- Strengthen implementation of the Project on sustainable forest management and forest certification approved by the Prime Minister at Decision No. 1288 / QD-TTg dated October 1, 2018; develop a forest certification system to promote sustainable forest management and forest certification in Vietnam; cooperate with the Ministry of Science and Technology in developing a national and key product.

- Evaluate use of timber and wood raw materials to propose solutions to create quality and legal raw material sources from domestic planted forest to provide sustainable materials for the export wood processing industry; preside over and cooperate with ministries, branches, localities, enterprises and associations to organize the evaluation of real situation and overall efficiency of wood production and processing (from wooden furniture, wooden decorations, construction, semi-finished wood, woodchips, wood pellets, artificial planks, etc.), from which to build development orientation in the coming years.

- Strengthen propagation, dissemination and provide guidance on market requirements, regulations on legal timber origin and standards of wood and non-wood forest products of importing countries for forest owners, associations and enterprises in processing industry of timber and non-timber forest products.

2. Ministry of Finance shall:

- Preside over and cooperate with concerned ministries and branches in studying and promulgating the public procurement policy in the direction of prioritizing use of legal timber products domestically planted and produced in Vietnam.

- Cooperate with the Ministry of Agriculture and Rural Development in controlling import of timber and timber products into Vietnam to ensure legal timber.

- Give priority to allocating budget sources for human resource training programs of the processing industry of timber and non-timber forest products.

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- Cooperate with the State Bank of Vietnam in studying and proposing the Prime Minister to consider supporting from the State's development investment credit source for the development of raw material areas and processing industry of timber and non-timber forest products for export.

3. Ministry of Industry and Trade shall:

- Research and improve mechanisms and policies to develop domestic and export markets; promote and improve Vietnamese timber brands in international markets.

- Develop and submit the Project on upgrading the VIFA - EXPO fair to an international fair associated with honoring prestigious brands of timber processing industry every year to the Prime Minister.

- Preside over and cooperate with the Ministry of Agriculture and Rural Development and the Ministry of Finance to work with relevant authorities to agree upon the imported timber management mechanism ensuring legal origin for imported timber.

4. Ministry of Planning and Investment shall:

- Provide guidelines for Decree No. 57/2018/ND-CP dated April 17, 2018 on mechanisms and policies to encourage enterprises to invest in agriculture and rural areas; allocate annual medium-term capital to ministries, branches and localities for effective implementation of Decree No. 57/2018/ND-CP.

- Cooperate with the Ministry of Agriculture and Rural Development to unify the method of statistics on area and output of timber exploitation from planted forests and other types of timber nationwide, ensuring that the published data will serve as a basis for industry development orientation.

5. Ministry of Science and Technology shall:

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- Preside over and cooperate with the Ministry of Agriculture and Rural Development and relevant ministries and branches and associations to review the national technical standards of forestry, to build bar code system, codes and take measures to trace origins of timber and non-timber forest products.

6. People's Committees of provinces shall:

- Organize propagation of restricted exploitation of young forests and large timber to protect the ecological environment and to create a source of large diameter timber for production and improvement of planted forest efficiency.

- Give priority to allocating budget for activities supporting forest planting in accordance with Decision No. 38/2016/QD-TTg dated September 14, 2016 and Decree No. 57/2018/ND-CP of on mechanisms and policies to encourage enterprises to invest in agriculture and rural areas.

- Organize implementation of guidelines and policies of the Government; implementation of policies of supporting and encouraging investment for rapid and sustainable development of the timber and non-timber forest industry.

- Focus on implementation of policies to support and create favourable conditions for enterprises on land funds and premises for investment in timber processing factories and facilities. Encourage and support enterprises in linkage, planning and infrastructure construction in order to create a centralized timber supply and processing area (including service industrial zone for timber processing) in the province.

- Support and create favourable conditions for timber and non-timber forest product processing associations to organize trade fairs, introduce products, promote trade and enable these enterprises to access preferential credit capital according to the current provisions of law.

- Ho Chi Minh City shall allocate the investment capital source from the state budget and allocate land fund, or suggest policies on investment attraction, socialization and supporting enterprises to build 01 large-scale exhibition centre for wooden furniture with a minimum area of about 60,000 per sqm.

7. Timber and non-timber forest product processing associations shall:

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- Strengthen linkages between members; protect legal rights of members; a bridge between state authorities and enterprises; strengthen solidarity and struggle with bad or untrue information about Vietnamese timber and non-timber forest product processing activities.

Ministers, Heads of ministerial authorities, Heads of government-affiliated authorities, Chairpersons of People's Committees of provinces, timber and non-timber forest product processing enterprises and associations shall be in charge of the execution of this Decision.

 

 

PP. PRIME MINISTER
DEPUTY PRIME MINISTER




Trinh Dinh Dung

 

1.000

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