Wood exports faced difficulties at the end of the year

​Inflation in key markets increased sharply, towards the end of the year, enterprises in the export wood furniture industry across the country as well as Dong Nai faced more and more difficulties. Orders decreased, production was moderate, some businesses had to let employees work alternately, calculating Tet holidays longer than prescribed.

Towards the end of the year, wood production faced more disadvantages. In the photo, produced at a wood industry enterprise in Bien Hoa

In the context of difficulties in orders, wood industry enterprises also face other pressures such as trade investigation, anti-origin fraud... that require units in the industry to unite more than ever.

Hard to find new orders

 Due to the scarcity of orders, many enterprises producing and processing wood for export are having to operate in moderation.

According to Ms. Tran Thi Bich Lai, a representative of Tan Duong Wood Company Limited (Tam Phuoc Industrial Park), orders are now down more than 50% compared to last year. In recent times, the company has worked with many partners in the US, made more samples to find more partners and maintain jobs for employees. However, the situation is still very difficult, not only in the last months of the year but also in the following year.

 
Similarly, a representative of an enterprise in Bien Hoa said that every year this month is in the peak period of overtime, each week exporting 8-9 containers of goods to the US but now only exporting 4 containers per month. Due to the difficulty of orders, from September this company no longer works overtime. In October, it plans to take a Saturday off, and in December will work with the union to negotiate a contract suspension. Currently, the enterprise only has more than 260 employees out of a total of 300 employees.

 
Difficulties from manufacturing enterprises lead to difficulties of wood material suppliers. Mr. Nguyen Cong Thuy, Director of Lien Khanh Company Limited (Long Khanh) shared that the company's wood material consumption partners are facing many difficulties. This also made Lien Khanh's sales of raw materials decline. As a unit with more than 200 employees, the difficult financial and business situation is a concern of enterprises, especially when the Lunar New Year is approaching, many salaries and bonuses for employees will increase compared to usual.

 Export target affected

 This year, the country's wood industry aims to export USD 16.5 billion. As a rule, in the last months of the year, exports of wood and wood products are usually higher than at the beginning of the year. However, this year, inflation is still increasing in the main export markets of the group, which are the US and EU countries, making people in these countries tend to maintain tight spending. At that time, the demand for non-essential goods such as wood products will hardly increase as strongly as before, which means that the signing and execution of orders of enterprises will also be directly affected.

 
In Dong Nai, in 2021, the wood industry will export USD 1.86 billion. The province has set a target of USD 2 billion in exporting wood and forest products in 2022, but at the current rate, this figure is very difficult to achieve, unless there are very favorable changes the rest of the time. Specifically, by the end of October, the export value has just reached USD 1.6 billion. The worrying thing is that from July until now, there is a decreasing trend, only September and October only reach USD 120 and 130 million respectively. With such a deceleration, there are less than 2 months to the end of the year, even last year's USD1.86 billion figure still has to work hard to achieve.

 
Facing a disadvantage from the export market, businesses seek to return to the domestic market in the hope that at the end of the year, the purchasing power of furniture will increase, and construction works will enter the peak season. However, returning to the domestic market is a short-term solution and not all businesses can do it because domestic consumption tastes are different from export markets, the production line for export goods is also different from domestic orders. Redirecting to the domestic market is not a matter of today, it can be done tomorrow. Not to mention, the relative number of businesses moving to the domestic market will also make competition fiercer because consumption demand is also slowing down, furniture inventory at the end of the year is still waiting for buyers.