Firms head to Vietnam to avoid US wood tax

Will local wood firms benefit from the influx of foreigners?

Nguyen Chien Thang, chairman of Handicraft and Wood Industry Association of Ho Chi Minh City,  said: “At this moment, wood processing firms in mainland China and Taiwan would like to penetrate deeply into Vietnam’s market. They want to build new plants or buy out local operating factories due to concerns about the high anti-dumping tax.”

Do Thi Kim Loan, vice chairman of Binh Duong province Furniture Association, told VIR that China was expected to be hit with an anti-dumping duty of up to 200 per cent.

“That is why the Chinese firms find other markets including Vietnam to dodge the law by using certificate of origin of other markets,” Loan said.

Local firms are worried Chinese and Taiwanese firms are jumping into Vietnam with main aim to take certificates of origins from Vietnam, not for making real investments that could bring added value to Vietnam’s wood sector.

“If that happens, this invasion would not bring any benefits for Vietnam. It could affect Vietnam’s wood sector and risks of the US applying anti-dumping tax on Vietnamese products might arise,” said Loan

Scores of local wood processing firms in Dong Nai and Bien Hoa provinces, the largest wood processing areas in the country, said they recently received the offers to sell their companies to Chinese for “very attractive prices”.

Loan’s Sao Nam Trading and Manufacturing Co in southern Binh Duong province, which specialises in manufacturing natural wooden floors under the Sao Nam brand, is a typical example.

Loan said a Chinese group that is 10 times bigger than Truong Thanh Group,  one of the leading wooden furniture manufacturers in Vietnam, wanted to hook up with her company but the offer was refused.

“Some Chinese and Taiwanese firms even proposed to lease local plants together with those facilities’ workers and managers to make their investments. However, local companies still do business effectively although they face with many difficulties like the fluctuating exchange rate and high petrol prices,” said a representative of a local wood processing firm in Dong Nai province.

According to Vietnam Timber and Forest Products Association, Vietnam exported $3 billion in the last 11 months, up 33.1 per cent year-on-year, of which domestic firms’ export revenue increased 10 per cent, while growth for foreign firms was more than 20 per cent.