The wood industry has transformed to expand its business range

​(CTTĐT - Dong Nai) - With competitive advantages, sustainable product value, local raw material areas, an abundant labor force... the wood industry is actively transforming, promoting internal resources to venture into new markets. ​

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Exhibition booth for export wood products at Tavico's Furniture Supermarket in Tan Bien Ward, Bien Hoa City 

That was the opinion of economic experts at the Vietnam Wood and Furniture Forum in 2023, organized by the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA) with the participation of economic experts and more than 200 enterprises in the wood and furniture industry across the country, in order to find effective solutions to maintain their positions and take advantage of opportunities for the wood industry to overcome the current economic downturn.

Looking for new markets

According to statistics of the Department of Forestry (Ministry of Agriculture and Rural Development), the export value of wood and wood products in the first 6 months of 2023 reached nearly 6 billion USD, down 29% compared to the same period in 2022. Particularly in Dong Nai, the export value of the wood industry of the province, considered to be the capital of the wood industry in the Southeast region, also dropped sharply by over 40%, and wass one of the four industries with a production index that decreased by nearly 5% compared to the same period in 2022. Enterprises operated in wood and furniture production industries are facing many difficulties due to lack of orders. A number of enterprises have to reduce capacity, labor, which lead to many financial difficulties due to debt payment, labor costs, storages...

However, with the proactive integration and the search for markets, many wood industry enterprises quickly studied new markets and promoted cooperation relationships to overcome difficulties. Mr. Nguyen Quoc Khanh, Chairman of HAWA, said that when the market declined, businesses were not passive but always tried to adapt. This was also an opportunity for many enterprises to reorganize their production apparatus and streamline their business models to reduce costs. On the other hand, businesses also took advantage of the support from the authorities involved in trade promotion to find new markets.

Minh Thanh Company Limited (Vinh Cuu district), owned by Mr. Nguyen Phuong, is one of the enterprises that actively overcome difficulties and seek new markets through exhibitions and fairs. Mr. Phuong shared, when approaching new markets, he always focused on observing and learning about market trends and needs. To adapt, his company actively changed the designs and materials in production. Currently, although orders are not as many as before, there are signs of improvement. Mr. Phuong shared: “Through surveying markets in the US, and some Middle Eastern countries, I found out that the demand for wood in construction in these markets is huge. This will be an opportunity for Vietnamese wood industry enterprises to restructure their production lines and look for opportunities to sell their company's products."

 Meeting new production criteria

Going green in production along with the association to create sustainable products in interior products, enterprises in Dong Nai are ready to follow the new "game rules" of the import-export market. Mr. Pham Phu Ngoc Trai, Chairman of the Board of Directors of Global Integration and Business Consulting Co., Ltd. (GIBC) said: “Going green right now is the way to have the opportunity to improve competitiveness for Vietnamese enterprises".

 According to the Chairman of the Board of Directors of GIBC, in addition to the current mandatory regulations, Vietnamese enterprises will face new requirements such as the Carbon Border Adjustment Mechanism (CBAM) proposed by the European Commission (EC), which will be in effect from October 2023. Accordingly, goods imported into the European market will incur additional costs, if they do not convert to a low-carbon production model. With the current status of Vietnam's wood industry with significant reserves of planted forests, Mr. Trai said that it is time for businesses to re-establish and organize good connections, manufacturing products that meet carbon emission criteria to create opportunities for enterprises to increase their advantages.

Along with the criteria of reducing carbon emissions, other green production regulations as well as regulations on wood origin... are also criteria that wood industry enterprises need to fulfill if they want to reach out to the oversea market. Ms. Trinh Kim Thanh, Deputy Director of Kien Phuc Trading and Service Production Co., Ltd (Trang Bom district) shared, businesses were ready to transform in order to adapt to the new requirements of the market. However, many businesses wished to be facilitated and supported by the state to participate in fairs and exhibitions abroad, especially in new markets to consult, learn and seek new orders.

 According to Mr. Nguyen Quoc Khanh, Chairman of HAWA, the wood industry is experiencing a shift to expand its business margin. Specifically, Vietnam's major furniture brands are expanding their presence in potential export markets, especially the markets of rich countries in the Middle East such as Saudi Arabia, Dubai... ​