The wood industry: Opportunity for Reinstating Orders and Revitalizing Business

29/03/2024 13:51

Over the past decade, Vietnam has emerged remarkably in the global furniture supply chain, becoming the world's sixth-largest furniture manufacturer in 2023, trailing only behind the top five furniture manufacturers: China, the United States, Italy, Germany, and India...

Wood and wood products are the only items in the agriculture, forestry, and fisheries sector to bring in over a billion USD in the first month of 2024, reaching 1.5 billion USD. In total for the past two months, the export turnover of this industry reached 2.4 billion USD, nearly a 44% increase. This is a positive development after the wood industry only achieved an export turnover of 14.3 billion USD in 2023, a 15.8% decrease compared to 2022, failing to reach the set target of 17.5 billion USD. In 2024, the industry is resetting this goal amid increased optimism among businesses, especially with the US market - where it accounts for over half of the industry's export turnover.

RECOVERING GROWTH TRAJECTORY

The localities with the largest wood export volume, including Dong Nai, Binh Duong, and Ho Chi Minh City, have recently collaborated to organize the HawaExpo 2024 Wood and Furniture Export Fair. Remarkably, within just over a month since the Lunar New Year 2024, Ho Chi Minh City has hosted two international exhibitions in the wood processing and furniture industry. The previous event was the VIFA Expo 2024 (The Vietnam International Furniture & Handicrafts Export Fair).

During the 6-month global promotion campaign, particularly at HawaExpo 2024, and the Vietnamese furniture brand in general, it has made its presence felt in 100 countries, appearing in over 15,000 news articles in 20 languages across all international industry-specific media outlets. "Thanks to this, alongside familiar markets like the US, Europe, Japan, and South Korea, the group of visitors from Australia presents a new opportunity; while the group from the Middle East is truly promising," Mr. Nguyen Vo Nam Viet, Sales Director of An Viet Thinh Furniture, remarked.

Most furniture wood industry businesses have indicated that they already have orders secured up to April, with some extending as far as September. "We've just landed a major order, shipping 600 prefabricated wooden houses to Hawaii", stated Mr. Vo Xuan Thuyen, Managing Director of Tran Duc Homes. The factory in Binh Duong of our company has already filled orders for prefabricated wooden houses until June 2024. 'The US and Canada markets are promising. In Canada, the demand for housing is very high. We are preparing to expand our factory by an additional 12 hectares to accommodate more orders,' Mr. Thuyen shared.

According to Mr. Nguyen Chanh Phuong, Director of Danh Moc Company and Vice Chairman of the Ho Chi Minh City Handicraft and Wood Processing Association (Hawa), interest rates in the US are stable and tend to decrease, helping to cool down mortgage interest rates and contributing to heating up the real estate market. "This is a good signal for furniture. If there are no significant political changes, by April or May, the export market will accelerate."

"Moreover, some other markets are also showing promising signs. For instance, exports to the Netherlands nearly doubled in January 2024, and exports to the Indian market surged by 250% compared to last year. The Middle Eastern market is also very attractive if businesses have products that meet consumer preferences and maintain good relationships," Mr. Phuong forecasted.

To seize the opportunity of recovery, businesses are accelerating their marketing efforts and strengthening design capabilities. "Compromising with the title of an international processing workshop is a mindset that needs to be abandoned. Leveraging Vietnam's current global spotlight and the plethora of new factories being launched this year, we aim to showcase the true essence of the industry's current capabilities", Mr. Nguyen Quoc Khanh, Chairman of Hawa, emphasized.

In addition, representatives from Hawa noted that sales figures for furniture and handicrafts in Vietnam's e-commerce sector have experienced remarkable growth recently. This indicates that participating in e-commerce platforms is a new direction for Vietnamese wood industry enterprises.

According to Ms. Nguyen Thanh Yen My, Senior Account Manager at Amazon Global Selling Vietnam, the e-commerce furniture sector in the US is forecasted to grow significantly in the next four years and could reach $118.6 billion by 2027. Currently, Vietnamese furniture products such as shoe racks, bed frames, folding desks, kitchen shelves, bathroom shelves, personalized gift items,... are selling very well on e-commerce platforms there. However, domestic manufacturers need to prioritize products that are easily disassembled and assembled, compact in size, easy to package and transport...

Source: vneconomy.vn