​​​​​​​Wood industry expected to achieve two-digit growth this year and in the coming years

Thursday, Jun 03, 2021 08:00

Nguyen Quoc Khanh, chairman of the Handicraft and Wood Industry Association of HCM City. — VNS Photo

Despite the impacts of the COVID-19 pandemic, exports of wood products rose by 16.4 per cent last year to US$13.17 billion, and are expected to reach $14 billion this year and $20 billion by 2025. Changes in the global supply chain offer opportunities for the industry to boost exports, but local producers face numerous difficulties that prevent them from taking full advantage.

Nguyen Quoc Khanh, chairman of the Handicraft and Wood Industry Association of HCM City, speaks about this and more.

What do you think about the woodworking industry’s export prospects this year?

Viet Nam’s woodworking industry achieved very encouraging results in 2020 since we rose to become the world’s second largest exporter of wood products and hit the export target of $13 billion, and are one of the industries with a big trade surplus in the country.

But 2020 also posed challenges since we could not directly meet buyers.

Building HOPE (HAWA Online Platform for Exhibition), an online marketing and sales channel for the wood industry, to enable overseas buyers to contact manufacturers in Viet Nam directly is one of the great efforts by the wood industry and HAWA.

The platform is possibly the first of its kind in Viet Nam.

We believe the wood industry will also achieve double-digit growth this year and in the following years as it did last year. The industry supply chain has changed a lot, and more buyers from other countries come to Viet Nam to buy products. Vietnamese enterprises are becoming more mature and able to meet large orders. Therefore, Viet Nam's wood industry will continue to develop in the coming years and Viet Nam will be one of the largest furniture suppliers in the world.

To realise their export goals and boost exports, Vietnamese enterprises must increase their investment to expand production scale and improve administration and management.

Firms need to seek measures to add more value to their products such as increasing the exports of products that they themselves design instead of exporting subcontracted products, and continue to use sustainable wood sources so that Viet Nam becomes a safe production base.

HAWA organised the Vietnam Furniture Matching Week [in April 2021] to connect Vietnamese manufacturers with thousands of international buyers through online and offline activities.

What are the biggest challenges faced by the woodworking industry?

The biggest challenge faced by the industry is the use of legal timer as prescribed in bilateral trade agreements and by importing countries. This requires co-operation between businesses and Government agencies to ensure that all the wood used for making products for both exports and distributing in the domestic market is obtained from legal and sustainable sources.

Besides, Vietnamese firms face difficulty in acquiring large land plots to expand their production facilities since land prices are increasing. There is also a lack of financial sources to support them. Besides, they face challenges in finding workers.

The association has suggested measures to help resolve these problems.

How do you see exports of furniture designed by local manufacturers? How can we increase them?

Currently [they] remain modest at 5-10 per cent. It is not easy to raise exports of ODM (original design manufacturing) products. To be able to sell ODM products, we need to improve the quality of design as well as the entire supply chain, marketing and sales.

The furniture industry aims to move from doing mainly sub-contract work to original design, and this is the right vision, one it will certainly achieve.

How do you evaluate the next generation of leaders in the woodworking industry?

I am very happy to see that this generation is very well trained. They can easily access foreign markets, and are dynamic and creative. Besides, we see there are many not born in families involved in the wood industry, but instead are in start-ups or are young designers or entrepreneurs investing in the wood industry. That is a very good thing.

Of course they still lack experience, but I think that they will learn very quickly. — VNS

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