Furniture sector hit by price hikes

Friday, Jul 12, 2013 08:10

Employees at Tai Anh Import-Export Company in Ninh Binh Province make furniture for export. Higher prices for imported wood have caused difficulties for domestic furniture producers. — VNA/VNS Photo Danh Lam

HCM CITY (Biz Hub)— Local producers of wooden furniture are struggling due to an increase in the price of imported wood that has negatively affected their operations.

According to the HCM City Wood Processing Association (HAWA), the cost of timber imported from the US, Europe and Africa rose by 20 per cent in the last five months.

"Normally, import prices fluctuate from 5-7 per cent, but 20 per cent is a big hit and is eating into producers' profits," said HAWA's vice president Huynh Van Hanh.

Hanh said producers had already fixed sale prices for the next 3-6 months, so the sudden hike in input materials was causing big losses.

Hanh attributed the rise in import prices to the ongoing recovery of the US construction industry which had increased demand there, and the narrowing supply from Africa.

Nguyen Chien Thang, director of Scansia Pacific, a prominent furniture producer and exporter based in HCM City, said his company was faced with big challenges.

"The demand for high grade wooden furniture is rising, especially from Japan. This price hike is hurting our business," Thang added.

Vo Truong Thanh, chairman of the Truong Thanh Wood Group, said the price of local timber remained stable, so his company would use it as a substitute.

"However, we have to talk to our clients about changing the material," he added.

According to the General Department of Customs, the export volume of wooden furniture in the first six months of the year reached US$2.23 billion, up 11 per cent year-on year, while the import volume of wood fell 5 per cent to $617 million. — VNS

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