Wood industry finds way to overcome challenges in 2024

​(News Portal – Dong Nai) - By the end of 2023, production and export of the wood industry in the country as well as Dong Nai decreased sharply compared to the same period last year. As a result, the plans set at the beginning of the year were left incomplete. Entering the new production season, many internal problems of the wood industry have arisen that need to be overcome in order to lead to a more favorable outcome.

Foreign partners visit a wood industry's event in Dong Nai province ​

In addition to finding domestic and export orders, the problem of restructuring and sustainable green production is also the main development trend of the wood industry in 2024.

Strong influence

According to the Vietnam Timber and Forest Products Association, the expected export turnover of wood and wood products in 2023 only reached about 13.5 billion USD, down by 15.5% compared to last year. Similarly, according to the General Department of Vietnam Customs, export turnover in 11 months of 2023 reached 12.1 billion USD, equivalent to 82.5% of the turnover of 2022. If export momentum remains at the current level, the export turnover of the wood industry in 2023 will reach from 13.5 to 14 billion USD, down 15.5% compared to 2022. This is the deepest decline in recent years with no growth is recorded, as well as nearly 3 billion USD lower than the set target of 17 billion USD at the beginning of the year.

While preparing for a new year, businesses in the industry are still facing many challenges such as a decline in orders, and major export markets demanding more stringent requirements on the legality and sustainability of products. Many businesses have to scale down their production. Some businesses even had to disband.

It is forecasted that wood production and export in 2024 will still face many challenges. Meanwhile, the target of the entire industry is that by 2025, Vietnam's export value of wood and forest products will reach 20 billion USD, of which the export turnover of wood and wood products will reach more than 18.5 billion USD. By 2030, export value will reach 25 billion USD. In a context where the market is still recovering, striving to achieve these targets is difficult without changes and restructuring within the industry's production.

Worry about recovery and meeting world standards at the same time

To stimulate the market, businesses and wood industry associations are actively implementing many year-end trading programs. In Dong Nai province, more than 1 thousand wooden stalls participate in the Year of the Dragon Tet Shopping Festival, taking place from now until February 4, 2024 at Ho Nai wooden furniture wholesale market (Dieu Xien Street, Tan Bien ward, Bien Hoa city). According to Mr. Vo Quang Ha, General Director of Tan Vinh Cuu Joint Stock Company, the organizer of this festival, the event has a scale of more than 1,000 booths from businesses inside and outside the province. The main activities within the festival include displaying and introducing Vietnamese interior and exterior wooden furniture products with export quality; seminars on topics: solutions to promote the export of interior and exterior wooden furniture; new and creative applications in wood production and processing; celebrating wood industry anniversary festival...

Similarly, in early 2024, the Handicraft and Wood Industry Association of Ho Chi Minh City will organize HawaExpo 2024, taking place from March 6 to 9 with more than 2.4 thousand booths, of which 80% belong to the group of manufacturing enterprises. Also in the next year, based on customer demand, the first chain exhibition model in Southeast Asia will be launched.

These steps contribute to providing a comprehensive picture of the capacity of the world's 5th largest exporter of wood and wood products. At the same time, gradually strengthen the connection between supply and demand, remove the "processing factory" label, contributing to increasing export value.

Along with finding orders and keeping up production and export, facing the strict market requirements, wood industry enterprises must also restructure and change to meet world standards.

For example, the European Union Regulation on Deforestation-free Products (EUDR) came into effect from June 2023 and export wood enterprises would have 18-24 months to meet the requirements of the new regulations. Therefore, according to Mr. To Xuan Phuc, the two core requirements that businesses need to pay attention to so that wood products circulating in this market are the products will not cause deforestation and are legal. Currently, many customers in this market have been applying many voluntary sustainable production and consumption standards for wood products, for example products with FSC sustainable forest management certification. In addition, the Voluntary Partnership Agreement between Vietnam and the EU on forest law enforcement, forest governance and forest product trade (VPA/FLEGT Agreement) was signed. In particular, Vietnam commits that all wood products exported to the EU are legal. As a result, businesses are forced to adapt and follow as there is no other way.