Decision 327/QD-TTg 2022 Project on development of the wood processing industry 2021 - 2030

DECISION

Approving the Scheme on sustainable and efficient development of the timber processing industry for the 2021-2030 period^[1]

THE PRIME MINISTER

Pursuant to the June 19, 2015 Law on Organization of the Government; and the November 22, 2019 Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration;

Pursuant to the November 16, 2017 Law on Forestry;

Pursuant to the Prime Minister’s Decision No. 523/QD-TTg of April 1, 2021, approving Vietnam’s forestry development strategy for the 2021-2030 period, with a vision toward 2050;

At the proposal of the Minister of Agriculture and Rural Development,

DECIDES:

Article 1. To approve the Scheme on sustainable and efficient development of the timber processing industry for the 2021-2030 period (below referred to as the Scheme), with the following major contents:

I. VIEWPOINTS

1. To develop the timber processing industry in a sustainable and efficient manner based on the value chain from forest planting and harvesting to product processing and consumption; to ensure legality of timber materials in timber processing and trading and timber products.

2. To develop the hi-tech and environment-friendly timber processing industry for production of deep-processed timber products of high added value.

3. The State shall adopt mechanisms and policies to encourage economic sectors to participate in, and mobilize all social resources to develop, the timber processing industry.

II. OBJECTIVES

1. General objectives

By 2030, to develop the timber processing industry to an important industry; to build and develop prestigious Vietnamese timber product brands in the domestic and international market, striving that Vietnam will join the group of top timber and timber product producers, processers and exporters in the world.

2. Specific objectives

a/ By 2025, the export value of timber and forest products will reach USD 20 billion, of which the export turnover of timber and timber products will exceed USD 18.5 billion. By 2030, the figures will be USD 25 billion and over USD 20.4 billion, respectively.  

b/ The value of timber and timber products for domestic consumption will reach USD 5 billion by 2025, and over USD 6 billion by 2030.

c/ More than 80% of timber processing and preservation establishments will reach advanced level in production capacity and technology.

d/ 100% of timber and timber products for export and domestic consumption will come from sources of legal timber materials and timber with sustainable forest management certificates.

III. TASKS

1. Developing infrastructure and expanding production scales

a/ To form 5 hi-tech forestry zones to attract investment of timber processing enterprises and auxiliary material producers.

b/ To develop and expand industrial parks and clusters specialized in timber processing in localities with potential and advantages for development. To attract investment in a selective manner, prioritizing projects that produce products of high added value and apply advanced, energy- and fuel-efficient, material-saving and environment-friendly technologies.

c/ To invest in the development of supporting industries; to prioritize environment-friendly auxiliary materials such as timber adhesives and surface-coating or decorating substances, and logistics services.

d/ To build 1 national timber product exhibition center meeting international standards.

dd/ To encourage the development of timber product research and design centers meeting consumers’ demands, cultures and tastes.

2. Developing groups of timber products of competitive edges and high added value and with high and stable market demand, focusing on developing production and processing of the following major groups of timber products:

a/ Timber furniture: tables, chairs, beds, cabinets, kitchen cupboards, vanity tables, bookshelves, and flooring planks.

b/ Outdoor timber products: swing chairs, slides, tables, chairs, benches, and sunshades.

c/ Artificial timber plank products: block boards, plywood boards, chip boards, and medium-density fiberboards (MDF).

d/ Products made of timber mixed with other materials to improve their aesthetic appearance and durability and reduce the use of timber such as rattan, bamboo, flute, plastics, metals, fabrics and leather.

dd/ Timber handicrafts: tables, chairs, beds, cabinets, lacquer products, timber paintings, timber statues; souvenirs, and decorative handicrafts made of timber mixed with rattan, bamboo, flute, or other materials.

e/ Wood pellets and wood chips.

3. Developing timber and timber product trading markets

a/ Export markets

- To continue to maintain and expand the export market share, proactively conduct trade promotion for timber and timber products in major markets including the United States, Japan, Republic of Korea, EU, and China, and expand to other potential and advantageous markets.

- To effectively implement free trade agreements (FTA) between Vietnam and other countries in the world.

- To build and develop the “Vietnamese Timber” brand, and encourage timber processing enterprises to use the “Vietnamese Timber” brand to contribute to raising the competiveness and prestige of Vietnam’s timber products in the domestic and international markets.

- To intensify the development of e-commerce, build databases, carry out digital transformation in production, business, and corporate governance, and apply information technology for sale through online channels and e-commerce floors.

- To provide trade information about, and build databases of, major export markets, including the United States, China, EU, Republic of Korea, and Japan, and potential markets for each group of timber products, and carry out dissemination and advertisement of Vietnamese timber and timber products.

- To organize and participate in timber trade fairs and exhibitions in foreign countries, export-oriented trade fairs and exhibitions in Vietnam and international conferences of the timber processing industry so as to expand export markets.

b/ Domestic market

- To organize domestic market researches; to build databases of important timber product items in association with Vietnamese people’s customs, practices and purchasing habits; to regularly disseminate information and raise the community’s awareness about Vietnamese timber products and services.

- To focus on trade promotion and develop the domestic market on the basis of identifying the actual state and role of the domestic market, demand and supply trends, and the interrelation between the domestic market and export markets.

- To organize trade fairs and exhibitions of Vietnamese timber products, and machinery and equipment for timber and forest product processing serving domestic consumers; to carry out sale activities through enterprises with prestige brands.

4. Removing trade and technical barriers for, and preventing and controlling trade frauds in, import and export of timber and timber products

a/ To promptly remove difficulties regarding trade and technical barriers in import and export of timber and timber products; to provide and assist enterprises in legal information and global timber markets; to commit to cooperate in settling illegal logging and illegal timber trade.

b/ To prevent and control trade frauds in import and export of timber and timber products

- To supervise transactions and enterprises that see a sudden increase in import and export of timber and timber products compared to their production capacity and scale so as to collect information, and examine, investigate and clarify signs of violation.

- To examine and identify the origin of, and manage, a number of groups of products seeing a sudden increase in import and export turnover, showing risks of origin frauds or illegal transshipment.

- To collect information about products subject to foreign countries’ anti-dumping duty and forecast the possibility that foreign countries apply trade remedies on Vietnam’s exports so as to take appropriate measures.

IV. SOLUTIONS

1. Regarding mechanisms and policies

a/ To improve mechanisms and policies on supports in terms of capital, land, and research and application of scientific and technological advances in production; to improve policies on association in forest planting and timber processing based on the value chains of forest products, encouraging the development of supporting industries.

b/ To develop and operate the Vietnam Timber Legality Assurance System for implementation of the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (VPA/FLEGT Agreement) and the Law on Forestry; to review and improve regulations on the Vietnam Timber Legality Assurance System to be conformable with international commitments and agreements.

c/ To improve legal provisions on prevention and control of crimes, smuggling, trade frauds and counterfeits; to expand international cooperation in fighting against, and prevention and control of, crimes, smuggling, trade frauds and counterfeits; to propose negotiation and conclusion of, or accession to, treaties and international agreements.

2. Regarding science and technology

a/ To apply new material technologies and automation technologies in timber processing and preservation and production technologies using scraps and by-products generated from forestry production, and technologies that produce high-quality products.

b/ To apply production and business management systems that use labor-saving advanced management software; to apply new technologies for design of timber product models so as to produce timber products of even quality and improve competitive edges.

c/ To build an information database of the timber processing industry to support enterprises in selecting technologies, making investment decisions, carrying out technology renewal and transfer, accessing concessional loans when implementing investment projects involving transfer of new technologies in production, and tax and charge exemption and reduction incentives.

d/ To renew technologies and synchronize production equipment and technologies, increase productivity, boost production specialization, formulate and uniformly apply standards and technical regulations, and improve product quality.

dd/ To carry out registration for protection of brands, product labels and industrial property rights of assorted timber products.

e/ To support enterprises in associating and cooperating with one another, and applying science and technology so as to meet technological renewal demands; to support enterprises in training and retraining in information technology, and formulation and application of the chain-of-custody (CoC) certification.

g/ To encourage enterprises to apply management systems according to international standards, comprehensive quality management systems, and social responsibility standard systems.

3. Regarding development of human resources

a/ To renovate teaching and training programs at training institutions; to attract laborers to participate in training programs suitable to technology renewal and ensure interests among the workforces; to organize training and retraining for 100,000-150,000 of laborers working in the timber processing industry.

b/ To carry out association and cooperation between enterprises and training institutions in training activities so as to develop human resources for the timber processing industry; to develop and multiply effective models of on-demand training association and cooperation among schools, enterprises and the State; to prioritize the training of high-quality human resources to meet demands of the market and enterprises; to open new training disciplines which the labor market has demand for but enterprises cannot provide training.

4. Regarding development of legal timber material sources

a/ To disseminate information for people and enterprises to carry out intensive forestation to raise forest productivity and quality; to manage and supervise the quality of forest tree cultivars, ensuring that 95% of forest areas are planted with proper-quality tree cultivars which have clear origin and management documents.

b/ To promote the association between timber processing enterprises and forest owners to form large timber material zones and have at least 0.5 million and 1 million hectares of forest areas with sustainable forest management certificates by 2025 2030, respectively.

c/ To effectively implement the Scheme on planting 1 billion trees; to efficiently and sustainably manage and use existing forest areas and nearly 1 million hectares of rubber plantations, in which at least 25-30 thousand hectares of rubber trees will be liquidated each year to provide large-sized timber, contributing to increasing the logging output of planted forests to more than 27 million cubic meters in 2025, and over 35 million cubic meters  in  2030; to reach an annual output of 7-8 million/m³ from scattered trees and rubber trees, striving to meet around 80% of the demand for timber materials for production and processing.

d/ To organize the effective implementation of mechanisms and policies on investment support and incentives in planting large-sized timber forests in association with sustainable forest management and grant of forest certificates.

V. FUNDS FOR IMPLEMENTATION

Funding sources for implementation of the Scheme include: the state budget (central and local levels); donations and aid; and other lawful funding sources from domestic and foreign organizations and individuals in accordance with law.

- Based on the tasks assigned under the Scheme, related ministries and sectors shall formulate their annual plans and estimates of their funding demands for submitting to competent authorities for approval and implementation in accordance with the law on the state budget.

- Local authorities shall allocate funds from their local budgets and mobilize other lawful funding sources for implementation of the Scheme in their localities; the central budget shall support localities which have difficulties in self-balancing their budgets under current regulations.

Article 2. Organization of implementation

1. The Ministry of Agriculture and Rural Development shall

a/ Act as a lead agency for implementation of the Scheme in conformity with the national forestry master plan, regional master plans and provincial master plans.

b/ Assume the prime responsibility for, and coordinate with the Ministry of Industry and Trade, Ministry of Finance, and Ministry of Labor, Invalids and Social Affairs, and related ministries and sectors in, studying and adjusting mechanisms and policies on training of human resources, and policies on investment, taxation, simplification of administrative procedures, development of supporting industries and logistics services, and perform the tasks assigned under the Scheme.

c/ Assume the prime responsibility for, and coordinate with related agencies in, guiding, examining, and urging localities to speed up the progress of some key projects on construction and establishment of hi-tech forestry zones, industrial parks/clusters for timber processing, and forestry tree cultivar centers; boost the expansion of production scale, increase productivity, and renovate technologies of timber processing plants associated with concentrated material zones.

d/ Assume the prime responsibility for building and operating the Vietnam Timber Legality Assurance System and relevant law provisions on certification of timber legality; and build the information system and database for classification of timber processing enterprises.

dd/ Effectively implement the Scheme on sustainable forest management and forest certification; formulate, improve and effectively operate the national forest certification system, promoting sustainable forest management and grant of Vietnam’s forest certification; develop models of cooperation and association in planting of large-sized timber forests with sustainable forest management certificates in association with product processing and consumption.

e/ Coordinate with the Ministry of Planning and Investment in effectively and practically implementing mechanisms and policies to encourage enterprises to invest in agriculture and rural areas.

g/ Coordinate with the Ministry of Science and Technology in supporting enterprises in upgrading and replacing technologies in processing and preservation of timber and forest products.

h/ Strengthen the dissemination of information, publication and provide guidance to forest owners, associations and enterprises engaged in timber processing about market requirements, regulations on timber legality and standards on timber products of importing countries.

2. The Ministry of Planning and Investment shall

a/ Guide localities and enterprises in effectively implementing mechanisms and policies that encourage enterprises to invest in agriculture and rural areas.

b/ Assume the prime responsibility for, and coordinate with the Ministry of Agriculture and Rural Development, ministries, sectors and localities in, allocating development investment funds for implementing projects on support for enterprises investing in agriculture and rural areas in accordance with the law on public investment and relevant laws.

c/ Coordinate with the Ministry of Agriculture and Rural Development, ministries, sectors and localities in examining, supervising and organizing the implementation of the Scheme.

3. The Ministry of Finance shall

a/ Assume the prime responsibility for, and coordinate with related ministries and sectors in, studying and promulgating policies on public procurement toward prioritizing the use of home-made products from domestically planted forest timber products of legal origin.

b/ Coordinate with the Ministry of Agriculture and Rural Development, ministries, sectors and localities in control of the import of timber and timber products, ensuring their legality.

c/ Summarize, balance and allocate funds for implementation of the Scheme in accordance with the law on the state budget.

4. The Ministry of Industry and Trade shall

a/ Study and improve mechanisms and policies to develop domestic and export markets; promote Vietnamese timber products and enhance Vietnamese timber brands in the international market.

b/ Assume the prime responsibility for, and coordinate with the Ministry of Agriculture and Rural Development and Ministry of Finance in, working with relevant agencies to reach consensus on the management mechanisms so as to ensure the legality of imported timber.

c/ Coordinate with ministries, sectors and localities in prevention and fighting of trade frauds, origin frauds, and evasion of anti-dumping duty, strictly handle violating organizations, individuals and enterprises.

5. The Ministry of Science and Technology shall

Assume the prime responsibility for, and coordinate with the Ministry of Agriculture and Rural Development, and relevant ministries and sectors in:

- Investing in research and application of high and advanced technologies in the selection and creation of plant varieties, forest planting, tending and exploitation, and timber processing so as to increase productivity and product quality, develop new products, and enhance the Vietnamese timber brands; recognizing industrial designs and utility solutions in timber processing.

- Reviewing and improving the system of national standards and technical regulations in the field of forestry, formulating the system of barcodes and article number codes, and implementing measures for timber origin tracing.

6. The Ministry of Labor, Invalids and Social Affairs shall coordinate with ministries and sectors in proposing policies to support training institutions in opening training disciplines which the market has demand for but  fall beyond enterprises’ capacity.

7. People’s Committees at all levels shall

a/ Organize dissemination of information for people and enterprises to reduce the exploitation of young forests and shift to deal in large-sized timber forests to protect the ecological environment, create the supply source of large-sized timber materials, and improve business efficiency of planted forests.

b/ Balance and allocate local funds for activities of providing support to planting of production forests, grant of forest certification under regulations on investment in forest protection and development; and adopt mechanisms and policies to encourage enterprises to invest in agriculture and rural areas.

c/ Effectively implement guidelines and policies of the Party and State; implement policies on investment support, incentives and encouragement for fast and sustainable development of the timber processing industry.

d/ Encourage, support, and provide land and grounds for enterprises to invest in timber processing plants and establishments, and concentrated timber processing parks/clusters.

dd/ Support timber processing associations in organizing trade fairs and exhibitions, product introduction and trade promotion, create favorable conditions for enterprises to access concessional loans in accordance with law.

8. Timber and forest product processing associations and enterprises shall

a/ Intensify the provision of market information to their members so as to enhance their proactiveness and prevent risks; intensify communications about importing countries’ legal provisions and systems of accountability for timber legality; build brands and fine images of the timber processing industry; coordinate with the Ministry of Industry and Trade and Ministry of Agriculture and Rural Development in organizing international trade fairs for the Vietnamese timber processing industry in conformity with the Vietnam International Furniture and Home Accessories Fair (VIFA - EXPO), and formulate criteria of, and organize trade fairs associated with, the annual honoring and selection of prestigious brands.

b/ Intensify the association among their members, and protect their members’ lawful interests, act as a bridge between state agencies and enterprises; intensify the unity and fighting against false information about Vietnam’s processing of timber and forestry products for export.

c/ Coordinate with related ministries, sectors and localities in study for investment in, and expansion of, industrial parks and clusters for timber processing; invest in hi-tech forestry zones, build and operate the national timber product exhibition center; and effectively build and develop the “Vietnamese Timber” brand.

Article 3. This Decision takes effect on the date of its signing.

Article 4. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and related organizations and individuals shall implement this Decision.-

For the Prime Minister
Deputy Prime Minister
LE VAN THANH