The wood industry still goes ‘one leg’

Experts liken that Vietnam’s furniture manufacturing and exporting industry is walking with “one leg” when it has advantages in production but is weak in trade promotion and sales. It’s time to promote trade promotion activities in this industry if you don’t want to miss the golden opportunities from the shift of international orders after the Covid-19 epidemic.

In the context of difficulties due to high inflation, influenced by the global geopolitical and economic situation, export orders of Vietnamese furniture enterprises from August 2022 to now have also decreased significantly. However, the trend of shifting furniture orders from China and other countries to Vietnam continues, evoking many glimmers of hope for the manufacturing and exporting industry of this item in Vietnam.

Orders are directed to Vietnam, without intermediaries

Mr. Dang Minh Lanh, Director of New GBI Furniture Company, said that in recent months, the company has received many offers from international buyers who want to learn about buying at the company as well as manufacturers. other Vietnamese furniture. These are major importers in the US and Europe.

“Because the supply chain and prices in China have changed a lot after the pandemic, they want to move production orders from China to Vietnam, Malaysia, and Thailand, in which Vietnam is highly interested in products. make more and more affirmative in the market and competitive price”, Mr. Lanh explained.

General Director of Minh Phat 2 Co., Ltd (Mifaco) Dien Quang Hiep also confirmed the opportunity to approach more and more international buyers due to the shift of orders from China after the Covid-19 epidemic. However, according to Mr. Quang Hiep, what really attracts the attention of the above buyers is that Vietnam’s export wood industry has products of good quality and meets the requirements in the production of items. wood for export.

There is also a new point in the above shifting trend, according to Mr. Tran Lam Son, General Director of Thien Minh Company, there are many international buyers who place orders directly with businesses without buying goods through companies. intermediaries in Hong Kong or Singapore as before.

“With good production capacity, effective management, a strong and skilled workforce and available raw materials, the Vietnamese wood industry will quickly overcome the current objective challenges, firmly in the second place in the world in terms of furniture exports”, said Mr. Nguyen Quoc Khanh, Chairman of Ho Chi Minh City Fine Arts and Woodworking Association (HAWA), expressing hope.

Many sales opportunities, lack of trade promotion

Mr. Do Xuan Lap, Chairman of the Vietnam Timber and Forest Products Association (Viforest), said that for many years in a row, Vietnam’s wood processing and export industry has achieved high growth at double digits thanks to the rapid increase of the wood processing industry. world market size and attraction from production capacity, especially products requiring high skills. Because of that advantage, most businesses only focus on production, build many large factories, but lack interest in trade promotion and close connections with markets.

This weakness makes Vietnamese wood enterprises passive when market demand declines. This can be clearly seen when, in the same context of being affected by the current widespread inflation, Vietnamese enterprises have experienced a sharp decrease in orders while FDI enterprises in the industry are still producing steadily.

Due to the lack of good market development and participation in commercial value, over the years, Vietnam’s main export markets are still familiar names such as the US (nearly 60% of export value), Europe, China, Japan, Korea…

Meanwhile, the potential of other markets is not small. For example, according to Saudi Arabia’s national transformation plan, the country has planned to build more than 550,000 residential units, about 275,000 hotels, more than 4.3 million square meters of retail space and more than 6,300 square feet of retail space. 1 million square meters of new office space. Considering the amount of furniture to fill the above numbers, the opportunity for global furniture businesses is not small. Along with the Middle East, other regional markets, like India are also booming…

Notably, in order to affirm their brands and sell products, foreign enterprises have also developed distribution systems in major export markets to directly sell and promote their brands. While, this is almost impossible for Vietnamese enterprises. On the other hand, Vietnam’s wooden furniture exports mainly focus on the distribution chain (Home Furniture), while foreign enterprises also expand to projects and constructions…

With the above analysis, the Chairman of Viforest said that the wood industry has long been walking only with “one leg”. For sustainable development, according to Mr. Lap, businesses and associations must link and properly invest in trade promotion, image promotion, information update, supply capacity to international customers. …

According to a report by Grand View Research, the global furniture market was worth $677 billion last year and will reach $1,070 billion by 2030. That means there’s still plenty of room for businesses to break through. compared with the figure realized in 2022 is nearly 17 billion dollars.

“Synergy” to promote the industry, find orders

HAWA Expo 2023 – HCMC Furniture and Furniture Export Fair 2023 – taking place this past week marks the first synergy between five associations in the woodworking industry and trade promotion to promote the industry’s image. The “handshake” between Viforest and four strong local furniture industry associations including Ho Chi Minh City (HAWA), Binh Duong (BIFA), Dong Nai (DOWA), Binh Dinh (FPA) is considered an important highlight. important for industry-wide cooperation in trade promotion.

“This cooperation aims to bring together strength and create more conditions for businesses in the industry to have a favorable and open business environment. Further, is to improve the position of Vietnam’s wood processing industry on the world furniture export map,” said Viforest Chairman.

With the participation of more than 200 businesses and 1,600 booths, the event attracted more than 16,000 visitors, including more than 1,000 international visitors who are corporations and buyers from more than 20 countries and territories. . Mr. Nguyen Quoc Khanh, Head of the Organizing Committee, said that HAWA Expo demonstrates the diversification and strength of local manufacturing industries. The event is also a voice affirming the determination and ability to break out of the processing model and join higher segments in the value chain that Vietnam’s wood processing industry pursues.

Enterprises participating in the fair, such as Lam Viet Furniture, Minh Thanh Wood Company, etc., said that despite being in the inflationary wave with many difficulties, they still continued to restructure their businesses, investing a lot in the stage. Design, develop new products as well as invest a lot in sales team, develop business, participate in domestic and international fairs to access new markets.

The associations also said that they will go through the system of Vietnamese trade agencies in other countries and events to create conditions for businesses in the industry to approach international business delegations; organizing furniture supply-demand matching sessions between Vietnam and potential markets such as Canada, the UK, the Middle East, etc.

With that goal, for the first time, an international fair held in Vietnam provides visitors with all services, from airport pick up, business connection, factory visit, accommodation, food. , and experience culture, entertainment, culinary discovery …

“This is how the world organizes professional exhibitions. We create maximum conditions for international guests to attend, expanding opportunities for businesses in the industry to approach customers,” said Mr. Khanh.

Allan Kjaer, Fine Scandinavia Business Development Manager, also said that despite slow growth in 2022, Vietnam is still an ideal destination for international furniture buyers. This fair is an opportunity to connect trade for Vietnamese furniture businesses to regain growth momentum.

The woodworking and furniture industry in Vietnam has set an export target of 20 billion USD by 2025. The opportunity to increase export value for the wood industry is still overwhelming despite the widespread inflation around the world. . The major industry associations have quite fully identified the strengths and weaknesses of the industry. However, as long as the promotion and trade promotion and market connection are really improved, we will look forward to the day when the wood industry can walk on its own.

KTSG