The volatility and unpredictability in global markets may have caused challenges for many industries, including woodworking, but offered opportunities to agile businesses, according to experts.
The Department of Forestry reported that forestry product exports amounted to an estimated $6.42 billion in the first six months of the year, a 28.8 per cent year-on-year decrease, with wood and wood product exports dropping by 29 per cent to $5.96 billion.
A preliminary survey by the Handicraft and Wood Industry Association of HCM City (HAWA) found that export orders of enterprises in the industry decreased by 30 per cent at the start of the year, but began to recover in July ahead of the global year-end furniture shopping season.
Speaking at the Việt Nam Wood and Furniture Industry Forum held by HAWA in HCM City last week, Phạm Phú Ngọc Trai, chairman of Global Integration Business Consultants, said the current reduction in export orders is temporary and the furniture industry has considerable growth potential for the next five to ten years.
Compared to global GDP that is forecasted to growth by 3 per cent this year, the world furniture industry's compounded growth rate stands at 4.5 per cent.
According to Statista Market Insights, the world furniture market revenue may reach $766 billion in 2023 and is estimated to hit approximately $932 billion in 2027, he said.
Việt Nam ranks among the world's five largest wooden furniture exporters, underlining its solid internal resources, he added.
Nguyễn Quốc Khanh, chairman of HAWA, has a similar view, stating that woodworking firms showcased their business integration initiative. During market downturns, businesses remained proactive by reorganising production and streamlining operations to reduce costs while also seeking support from trade promotion agencies to explore new markets.
Khanh pointed out a new trend in the woodworking industry, where significant furniture brands from Việt Nam are expanding into promising export markets, notably super-rich countries in the Middle East such as Saudi Arabia and Dubai with an eye on supplying products to new super real estate projects there.
With the industry's internal strength and the return of orders, the industry's export target for 2023 is considered attainable, he said.
Experts at the forum emphasised the importance of businesses strengthening their internal resources to be prepared for order resumptions in the recovering market and embracing green transformation to improve competitiveness.
Sustainability in interior products is now a mandatory requirement, not just a voluntary standard, Trai said.
He said Vietnamese businesses will face new demands such as the EU's Carbon Border Adjustment Mechanism (CBAM), effective from October 2023.
Goods imported into the European market may incur additional costs if they fail to adopt a lower-emission production model and earn carbon credits.
Việt Nam's wood industry possesses significant reserves of planted forests, which, if well-managed and connected, offer opportunities for Vietnamese furniture enterprises to capitalize on the carbon credit market, he said.
The woodworking industry should reposition its goals and vision to become the world's green and sustainable furniture hub, he added.
Phạm Thị Ngọc Thủy, director of the Private Economic Development Research Board, pointed out that market challenges related to the European Union Timber Regulation (EUTR) and net-zero goal will push Việt Nam's wood and forest product processing industry in a more positive direction, encouraging further outreach and attracting foreign investment.
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