Vietnam: Forestry and wood exports expected to exceed US$9 billion
Exports of forestry products from Vietnam is anticipated to reach above the US$9 billion mark this year, the Handicraft and Wood Industry Association of Ho Chi Minh City (Hawa) reported.
According to Nguyen Quoc Khanh, chairman of Hawa, exports of wooden as well as other forestry products rose by 10.2 per cent in 2017 to hit US$8 billion, a figure originally targeted for 2020. Over the past seven years, exports of wood and wooden products rose by 12.3 per cent per year, and are predicted to rise even faster in the coming three years, he continued.
This comes at a time where Vietnam is facing less competition from other countries. The largest supplier of wooden products in the world, China, is no longer as competitive, having slapped export taxes on wooden products even as it faces a lawsuit the United States (U.S.) has brought against it for dumping furniture. Moreover, other top furniture producers much like Italy and Germany have cut production due to rising costs, while Malaysia and other ASEAN countries have the development strategies in place, but do not have the workforce to support them.
While demand for furniture around the world remains consistently high, and though Vietnam is a strong exporter, its exports are insignificant, meaning there is still considerable scope for firms in Vietnam to expand their market share, according to the Vietnam News Agency.
Nguyen Xuan Cuong, Minister of Agriculture and Rural Development, lauded the sector’s achievements, saying that the country realising US$8 billion in exports was an important landmark, and that increasing global demand would mean that it would have more opportunities to increase their market share. Moreover, the local Vietnamese population – 100 million – is a promising market as well.
Though he also stated that consumers have higher demands and furniture producers in turn need to raise the quality of their products alongside features and designs to add value to their products.
But to achieve the export target of US$9 billion this year, Cuong has suggested that firms invest more in technology and business management in order to boost productivity as well as sustain quality. In addition, he also advised that firms “diversify timber sources” to avoid high prices while also bypassing illegal sources, according to Vietnam News Agency. However, as the U.S. has cut income tax to support the local furniture producers, Vietnam should not export products that American firms are producing.
And with numerous international buyers moving from China to Vietnam, the market for wooden products is doing very well.
“I think the export target of US$9 to US$10 billion is easy to achieve,” general director of Lam Viet Joint Stock Company, Nguyen Lien, said. “Businesses have prepared well to capitalise on market opportunities.”
In Vietnam, wood and wooden products are sixth on the list of the largest exports, and the nation is the largest exporter of the products among ASEAN member nations, the second largest in Asia, and the fifth globally.
Source: Vietnam News Agency