Vietnam wood sector strives to regain growth pace

Exports had been strong in the first half of last year, but orders had dropped sharply thereafter, and companies have gotten just a few orders this year, said Vietnam Timber and Forest Products Association chairman Do Xuan Lap. — VNA:VNS

HO CHI MINH CITY: Faced with a slump in export orders, woodworking firms have been striving to stay afloat in various ways.

Do Thi Kim Loan, general director of Sao Nam Trading and Production Co Ltd, which makes wooden flooring, said the company’s export orders are down 35% to 40% year-on-year this year, as orders from the US market, its major export market, dropped sharply.

“With exports to the United States plunging, we seek to export to Canada and accept outsourcing orders from Australian customers.

“Australian wood flooring importers ship materials to my company, we carry out the final processing stages, pack and re-export them. This is an adaptation to partially offset the decline in our major market.”

Binh Duong-based furniture company Bao Hung has also seen a sharp drop in orders from the United States, its key market, this year.

Phung Quoc Cuong, its marketing director, said the company has adjusted prices and developed new products.

“Demand from the United States, European Union and Japan has reduced. But if businesses come up with new designs and products, it will change customers’ perceptions and might spur a recovery in demand.”

Nguyen Phuong, merchandise director of Minh Thanh Co Ltd, said while in general consumers are tightening spending, there are still some who have a need, but they have higher requirements in terms of quality and design differentiation.

So businesses that invest a lot in design and developing their own products would surely attract international buyers.

Besides developing new products, Vietnamese enterprises are also increasingly setting up sales teams and attending local and foreign fairs to try and find a way into new markets, Phung added.

Do Xuan Lap, chairman of the Vietnam Timber and Forest Products Association (Viforest), said exports had been strong in the first half of last year, but orders had dropped sharply thereafter, and companies have gotten just a few orders this year.

“In the past, exports would usually go up by 15% to 20% in January, but there was no growth this year.”

The gloomy housing market due to monetary tightening and interest rate hikes globally to fight inflation has affected demand for furniture, he explained.

To enable the industry to find new customers in both traditional and new markets, five associations in Vietnam – Viforest, the Handicraft and Wood Industry Association of Ho Chi Minh City or Hawa, Binh Duong Furniture Association, Dong Nai Wood Processing Association and Forest Products Association of Binh Dinh – joined hands to organise the 2023 Ho Chi Minh Export Furniture Fair or HawaExpo 2023 in Ho Chi Minh City from Feb 22 to 25, he said.

The event attracted 210 exhibitors, of whom 80% were Vietnamese furniture manufacturers with the rest coming from China, the United States, Germany, Singapore, Japan, Thailand, Indonesia, the Philippines and Denmark.

Nguyen Hoai Bao, an executive board member of Hawa, said: “The fair was successful, attracting 16,062 visitors, including 2,653 visitors from 100 countries and territories.

“Sixty-four contracts and memoranda of understanding were signed at HawaExpo 2023 and the estimated value of transactions at the fair is US$3.6mil (RM16mil).” Dang Rang, manager of A&M Industry Vietnam Co, Ltd, said HawaExpo was an effective forum to advertise products. — Viet Nam News/ANN

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