Export of wood products and handicrafts displays potentials

USD Exports of wood and wood products reached over 1.1 billion USD

According to Mr. Tran Ngoc Liem, Director of the Vietnam Chamber of Commerce and Industry - Ho Chi Minh City (VCCI-HCM), Vietnam's wood industry, with over 5,400 enterprises and more than 500,000 laborers, has established its position in the international market.

Currently, Vietnamese wood has penetrated markets in 140 countries, including 40 major markets. In terms of wood exports, Vietnam ranks among the top 5 largest wood exporting countries in the world, top 2 in Asia, and leads in ASEAN.

In recent times, the export-import situation of wood products and furniture in Vietnam has faced fluctuations and significant declines in orders, posing challenges for many wood production and export businesses.

"Over the past 7 months, the exports of wood and wood products reached 7.2 billion USD, a decrease of 26.4% compared to the same period in 2022. However, July marks the beginning of very positive signals for the wood processing industry. Many businesses have adopted various solutions to explore new markets and new customers, leading to the expansion of new markets, better revenues, and more favorable conditions," Mr. Liem stated.

Also according to Mr. Liem in July alone, Vietnam exported over $1.1 billion USD worth of wood and wood products (an increase of 2.8%), surpassing the overall export growth rate of Vietnam. This is a positive sign for exports in general and the wood industry in particular.

Eight wood and wood product export markets in Vietnam have experienced significant growth over the past 7 months, including Turkey (almost 400% increase), India (250% increase), Spain (52.6% increase), Cambodia (50.8% increase), Chile (120.7% increase), Kuwait (36.6% increase), Norway (36.7% increase), and Finland (13.6% increase).

Numerous new orders emerging

As a supplier of wood materials and furniture for many domestic and international businesses, Hoang Thong Wood Company Limited (Hoang Thong Wood) has invested in 8 factories in Binh Duong and Nghe An to meet the strict standards of many demanding markets. "All of our factories adhere to customer requirements for labor safety, quality, SMECTA... With our strong products being rubber wood and acacia wood, both have FSC certification," said Mr. Alex Nguyen, Business Director of Hoang Thong Wood. He added that the company currently exports to markets such as the United States, Germany, Italy, and Japan, with the United States accounting for 80% of exports. The total export turnover of wood materials and furniture is about 65 million USD per year.

"At the 14th VIFA EXPO held in March, we also reached many new customers and secured orders from Germany, Australia, and the United States. Therefore, we continue to participate in the International Furniture & Handicraft Export Fair ASEAN Vietnam with the desire to find more new customers. This year, we set a target of about 25 million USD in furniture exports," stated the Business Director of Hoang Thong Wood.

Mr. Pham Van Thuan, Director of MP Crafts Company Limited (MP Crafts), mentioned that the company's handicraft products have been exported to markets such as the United States, Europe, Japan, and South Korea. From January to May, the company faced many difficulties; however, from May until now, the situation has improved significantly. Many orders from existing customers have been continued and new orders have also emerged.

"After participating in the VIFA EXPO fair in March, the company reached about 50 customers, and among them, more than 10 customers have signed purchase contracts. Currently, orders have been signed until November – December of this year," Mr. Thuan informed.

Mr. Tran Quoc Manh, Vice Chairman of the Vietnam Handicraft Exporters Association, assessed that the global market decline has impacted all of Vietnam's export products. However, moving beyond the second and third quarters of 2023, there are more distinct signs of improvement. Export orders for wood and handicraft products are showing signs of recovery. Some companies have reached over 50% of their factory capacity. This trend is gradually increasing.

"We hope that by the end of this year or at the latest in early 2024, orders will return to their previous state. This is a bright spot, though there are still many challenges," Mr. Manh stated. He further noted that current orders differ from those in the past as they are more price-competitive and require higher standards for design and quality. For instance, for a wooden chair combined with various components, customers now request reduced usage of metal and wood. However, these components must be sourced from reputable companies that meet environmental standards. Customers demand wood and accessory materials to be recyclable, but with higher quality. This poses a pressure for businesses.

Nevertheless, Mr. Manh believes that these challenges are also opportunities for businesses to innovate. Transitioning from traditional orders to environmentally friendly products, diversifying in design, and aiming for higher environmental standards is essential for competitiveness and market leadership. This will allow Vietnam to regain its glorious era of wood and handicraft exports.

According to market trends, craft villages are flourishing, and the variety of handicraft products is increasing, corresponding with heightened customer demands. Thus, wood and handicraft export businesses need to enhance their capacity through industrialization, incorporating more machine processes, increasing productivity, and focusing on products that are not only aesthetically pleasing but also environmentally friendly while maintaining cultural identity and recyclability.

Furthermore, in the opinion of Mr. Manh, there are currently many businesses and craft villages that have grasped and shifted towards environmentally friendly product directions. However, to meet global requirements, further efforts are still necessary.

Mr. Tran Ngoc Liem, Director of VCCI-HCM, emphasized that for wood and handicraft businesses, seeking orders through fairs is a necessary and practical activity in the current situation. Therefore, Lien Minh Company, in cooperation with the Vietnam Chamber of Commerce and Industry – Ho Chi Minh and the Vietnam Coconut Association, organized the 1st Vietnam ASEAN International Furniture & Home Accessories Fair (VIFA ASEAN 2023) from August 29 to September 1, 2023, in Ho Chi Minh City.

The fair brings together numerous reputable wood and handicraft manufacturers and processors from 12 provinces across the country, as well as countries and territories such as the United States, South Korea, China, Japan, India, the Netherlands, Hong Kong, Malaysia, Thailand, and Cambodia. The event features nearly 200 companies with more than 600 booths, attracting over 2,000 international visitors who have registered for participation.

"This will be an effective trade promotion channel that helps wood industry businesses introduce and develop their product brands, expand markets, actively participate in the global production chain, and contribute to the achievement of the goal that by 2030, the wood processing industry becomes a significant economic sector. It will build and develop Vietnam's wood product brand with a reputation in the domestic and international markets, and strive for Vietnam to be among the world's leading countries in wood production, processing, and export," said the Director of VCCI-HCM.

To facilitate domestic businesses in participating in product introduction fairs and seeking potential customers, from February 26 to 29, 2024, Lien Minh Handicraft Wood Company Limited will organize the 15th Vietnam ASEAN International Furniture & Home Accessories Fair (VIFA EXPO) at the Vietnam International Convention Exhibition Center - SKY EXPO, District 12, Ho Chi Minh City. The fair is expected to attract over 600 companies with more than 2,000 booths, bringing together a large number of reputable suppliers and manufacturers from Vietnam and internationally.