Hanoi (VNS/VNA) - Forestry products are one of the few productsseeing export growth despite COVID-19 threatening economic development incountries around the world.

However,the impact of the pandemic would be unavoidable in the long term which willforce the Vietnamese timber industry to find a new direction to sustaindevelopment.

Dataof the Ministry of Agriculture and Rural Development showed the export of woodand wood products brought Vietnam more than 13.2 billion USD in the past 11months, up 20 percent over the same period last year, in which the export ofwood products fetched 9.9 billion USD, up 16.6 percent.

“Therapid spread of COVID-19 has changed consumer behaviour, creating pressure andchallenges forcing businesses to innovate and improve at all stages, fromdesign and production to trade, in which digitalisation is the key,” said AmitSharma, lead of researcher team in the report on Digitalisation MaturityAssessment of the Wood Processing Industry in Vietnam.

Thereport, conducted by the Handicraft and Wood Industry Association of Ho ChiMinh City (HAWA) and the Private Sector Development Research Board (IV Board)under the support of Asia Foundation in Vietnam, has studied the readiness of Vietnam’swood industry to digital transformation.

Thereport found 58 percent of respondents confirmed their company has some form ofa digital strategy in place and 80 percent said digital transformation is corefor their future strategic business development. While 70 percent of firmsconfirmed their management team has the necessary skills for executing digitaltransformation, only 48 percent said their company plans its digital strategyfor up to two years and 46 percent have a plan from 3-5 years.

Lackof knowledge, process and people are seen as the biggest challenges ofdeveloping and implementing a digital strategy, followed by budget and management.Most of the companies said increasing productivity and transforming the companyare the core reason for shifting to digitalisation, besides rising revenues,reducing costs and finding new markets.

Toachieve exports of 20 billion USD in 2025, it is necessary to approach newdirections, multi-channel sales, and increase the value of products. Thoughe-commerce is the immediate solution, the report said complete digitalisationshould be the mid-to-long-term focus of all wood processing Vietnamese enterprises.

Accordingto Pham Thi Ngoc Thuy, director of the office of the IV Board, woodmanufacturing businesses have made great efforts to find solutions for digitaltransformation, especially in the pandemic, business leaders sought many waysto interact with customers given lockdowns in both domestic and foreign markets.

“However,those endeavours are still spontaneous and have yet to create spillovers to thewhole industry, so the effect has not been as expected,” Thuy said at theconference on the digital transformation in the wood processing industry on December15.

Shesaid businesses need to determine where they are in the digital transformationprocess to make the most accurate action and investment decisions.

Hesitancy

NguyenChanh Phuong, HAWA’s vice chairman and general secretary, said up to now,Vietnamese wood enterprises have still maintained some retention towardsdigitalisation that make them lag far behind counterparts in other countrieslike China, Germany and Poland.

“Vietnam’swood industry has a relatively high position in the world’s export map but thecontribution of digital transformation and high technology to this result isnot much and has not changed the face of the Vietnamese wood industry,” Phuongsaid.

Thefurniture segment, which dominates the wood product industry, has four valuesincluding production, designing, trading and branding, which have transactionvolumes estimated at 450 billion USD per year. However, over the past 20 years,the Vietnamese furniture business community has just focused on the value ofproduction, which has annual transactions of about 140 billion USD with lowprofit.

Manybusinesses are sceptical of digital transformation because of high costpressure. Many do not know where to start and what can be done in the shortterm and what solutions are needed for the medium and long term. Theunwillingness to change is a major challenge to going digital.

Expertshave agreed that there is no common answer for digital transformation. Eachbusiness has different qualities, so there are also different solutions fortheir digital strategy. Many companies have begun by examining the factors thatcreate value for their customers and developing operating models to delivervalue. 

Accordingto Do Xuan Lap, Chairman of the Vietnam Timber and Forest Products Association,a digital transformation programme will help the company improve capacity andcorporate governance. Currently, the competitiveness of wood industryenterprises is still low compared to other enterprises, especiallyforeign-invested enterprises. In the future, the associations will makeefforts to help Vietnamese wood enterprises put a digital transformationprogramme into place./.