Timber industry urged to go digital due to long-term impacts of COVID-19

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VIETNAM, December 17 –

The workers organize the products of the Thuận An Wood Processing JSC factory in Bình DÆ°Æ¡ng province. – Photo VNA / VNS

HÀ NỘI – Forest products are one of the few products to see export growth despite the threat of COVID-19 to the economic development of countries around the world.

However, the impact of the pandemic would be inevitable in the long term which will force the Vietnamese timber industry to find a new direction to support development.

Data from the Ministry of Agriculture and Rural Development showed that exports of timber and timber products to Việt Nam brought in over US $ 13.2 billion in the past 11 months, up 20% compared to the same period last year, when exports of wood products reached $ 9.9 billion, up 16.6%.

“The rapid spread of COVID-19 has altered consumer behavior, creating pressure and challenges for companies to innovate and improve at all stages, from design and production to retail, where digitalization is taking place. the key, ”said Amit Sharma, head of the research team. in the report on the assessment of the maturity of the digitization of the wood processing industry in Việt Nam.

The report, produced by the Hồ Chí Minh-City Wood Craft and Industry Association (HAWA) and the Private Sector Development Research Council (Council IV) with the support of Asia Foundation in Việt Nam, studied the readiness of Việt Nam’s timber industry for digital transformation.

The report found that 58% of those surveyed confirmed that their company has some form of digital strategy in place and 80% said that digital transformation is at the heart of their future strategic business development. While 70% of companies confirmed that their leadership team has the skills to execute digital transformation, only 48% said their company is planning their digital strategy for up to two years and 46% have a 3 to 5 plan. year.

Lack of knowledge, process and people is seen as the biggest challenge in developing and implementing a digital strategy, budget tracking and management. Most of the companies said that increasing productivity and business transformation was the main reason for the switch to digitalization, besides increasing revenues, reducing costs and finding new markets.

To achieve exports of 20 billion dollars in 2025, it is necessary to approach new directions, multi-channel sales and increase the value of products. Although e-commerce is the immediate solution, the report says full digitization should be the medium to long term goal of all Vietnamese wood processing companies.

According to Phạm Thị Ngọc Thủy, director of the office of the IV Board, wood manufacturing companies have gone to great lengths to find digital transformation solutions, especially during the pandemic, business leaders have been looking in many ways to interact with customers given the bottlenecks in both domestic and foreign markets.

“However, these efforts are still spontaneous and have yet to spill over to the entire industry, so the effect has not been as expected,” Thủy said at the digital transformation conference. in the wood processing industry on Wednesday.

She said companies need to figure out where they are in the digital transformation process to make the most accurate action and investment decisions.

Hesitation

Nguyễn Chánh Phương, vice president and general secretary of HAWA, said that so far Vietnamese timber companies have always maintained a certain retention towards digitization which makes them far behind their counterparts in other countries like China, Germany and Poland.

“Việt Nam’s timber industry occupies a relatively high position on the global export map, but the contribution of digital transformation and high technology to this outcome is not large and has not changed the face of Vietnamese timber industry, ”said PhÆ°Æ¡ng.

The furniture segment, which dominates the wood products industry, has four values, including production, design, marketing and branding, which have transaction volumes estimated at $ 450 billion per year. However, over the past 20 years, the Vietnamese furniture business community has just focused on the value of output, which has annual transactions of around $ 140 billion with low profit.

Many companies are skeptical of digital transformation due to the high cost pressure. Many do not know where to start and what can be done in the short term and what solutions are needed in the medium and long term. Reluctance to change is a major challenge in going digital.

Experts agreed that there is no common answer for digital transformation. Each company has different qualities, so there are also different solutions for their digital strategy. Many companies have started by examining the factors that create value for their customers and developing operating models to generate value.

According to Đỗ Xuân Lập, president of the Việt Nam Timber and Forest Products Association, a digital transformation program will help the company improve its capacity and governance. Currently, the competitiveness of companies in the timber industry is still low compared to other companies, especially companies with foreign capital. Going forward, the associations will work to help Vietnamese timber companies set up a digital transformation program. – VNS


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