Wood industry in Binh Dinh province is expected to prosper in the last 6 months

Binh Dinh province has an area of ​​more than 400,000 hectares of raw material forest, meeting a part of natural wood for export production and significantly complementing the good source of imported wood materials from all over the world with the raw material market model that has been formed for decades now with the business presence of more than 60 reputable domestic and foreign enterprises, meeting the strict requirements of European environmental standards.

It is estimated that in the first quarter of 2023, the processing output of Wood products of all kinds of enterprises in Binh Dinh province will decrease by 27% compared to the same period in 2022.

Wood industry enterprises in Binh Dinh are struggling to overcome difficulties by reorganizing production and trying to maintain operations. Some businesses that could not exploit new orders were forced to suspend production or produce in moderation to retain workers.

The reason for the sluggish production of wooden furniture for export in the first months of the new year was the high inflation and high-interest rates, leading to high inventories of retailers in many international markets, causing a sharp decrease in the demand for imported wooden furniture.

Due to the inability to exploit new orders, from the end of 2022 until now, the operation of Gia Han Interior and Exterior Co., Ltd in Quy Nhon City has almost stalled. The company currently has 100 employees. The company must reorganize production and arrange for workers to rotate to retain workers. Each person works ten days a month so that everyone has a moderate job.

"This plan was agreed upon by all workers, considered as sharing difficulties with the company. No one quit their jobs but followed the company's arrangement until the day of normal operation returned. We expect the company to have new orders by the beginning of June 2023. The company's operation will prosper again", said Mr. Nguyen Thanh Cong, Director of Gia Han Interior and Exterior Co., Ltd.

According to Mr. Le Minh Thien, Chairman of Binh Dinh Wood and Forest Products Association, it is expected that in the first six months of 2023, many factories will have to reduce capacity and output; or have to stop production, the number of employees will decrease sharply by 50-70%. Especially for newly built wood processing factories, or investing in expanding factories, installing new production lines with modern technology without orders, the situation is even more tragic.

Although the wood industry in Binh Dinh still faces difficulties, businesses still believe that furniture export in the second half of 2023 will recover.

"Binh Dinh Wood and Forest Products Association regularly follows the world market to provide analysis and orientation for member businesses to actively overcome difficulties in this period and welcome new orders in the upcoming time. During this time, businesses must focus on diversifying markets and customers, restructuring operations under the motto "self-reliance, savings," and finding customers and orders suitable for capacity and current conditions," Mr. Le Minh Thien shared.

According to the Binh Dinh Wood and Forest Products Association, the basis for the Binh Dinh wood industry to prosper in the second half of 2023 is the inventory of furniture importers in significant markets such as the EU, the US, and the UK. Almost all the goods have been consumed, so importers have started importing goods again. Besides, the world freight fee is falling deeply, which is also the driving force to promote wooden furniture exports.

Previously, a container of wooden furniture (40 feet) transported from Vietnam to the US cost US$ 20,000 to 22,000. Now it has reduced more than ten times. The reduction of international sea freight helps businesses be bolder in finding markets and new customers to expand output.

Mr. Vo Mai Hung, Deputy Director of Binh Dinh Department of Industry and Trade, said that to support wood businesses in the area, the Provincial People's Committee has directed departments, departments, and branches in the province to facilitate support, coordination, and organization. Organize trade promotion in Australia and Korea in 2023 and prepare to organize International Furniture Fair in Binh Dinh in 2024.

Besides that, organizing seminars on developing wooden furniture products, workshops on new machinery and equipment, and production technologies, managing programs to support businesses, and focusing on strongly developing the domestic market.