Wood product exports expected to increase up to 15% this year

Thursday, Jan 21, 2016 08:14

Workers process wood at SAHABAK Joint Stock Company in Bac Kan Province. — VNA/VNS Photo Danh Lam
HCM CITY (Biz Hub) — Viet Nam's wood and wood products exports are expected to expand by 12-15 per cent this year from US$6.9 billion last year, according to the Handicraft and Wood Industry Association of HCM City (Hawa).

Speaking at a seminar in HCM City yesterday, Nguyen Quoc Khanh, Hawa chairman, said companies have export orders until June.

The woodwork industry is among the country's 10 biggest in terms of exports, he said.

Vo Truong Thanh, general director of Truong Thanh Furniture Corporation – one of 10 enterprises honoured at the seminar for their export achievements last year — said his company's revenues topped VND2.3 trillion ($102.67 million) last year after rising over 40 per cent year-on-year.

It expects sales to grow 15-20 per cent this year and has export orders until September and domestic orders until year-end.

Many wood products importers in the US, Japan, and South Korea have shifted their orders from China to Asean countries, including Viet Nam, handing Vietnamese firms a great opportunity.

Luong Van Nga, managing director of Koda Saigon Co., Ltd, another company to be honoured, said his workers have had to work overtime to fulfil export orders.

Last year the company achieved a sharp increase in exports to the US, and the situation is expected to be even better this year, he said.

Vu Hai Bang, chairman of Woodsland Joint Stock company, also one of the 10 awardees, expects growth of 20-25 per cent this year.

"Our major export markets are the US and EU, and we will promote exports to Japan and South Korea to diversify our export markets."

The establishment of the ASEAN Economic Community brings Vietnamese consumers more product choices and challenges to domestic firms, delegates said.

Viet Nam's wood products trade with other ASEAN countries remains modest, and according to Nguyen Chien Thang, general director of Scansia Pacific, the bloc with a population of more than 600 million is a huge and promising market for wooden products.

But to penetrate the market, Vietnamese firms must join hands to create large distribution systems, he said.

Referring to the Trans-Pacific Partnership, Huynh Van Hanh, Hawa deputy chairman, said Vietnamese wooden products already enjoy low tariffs in TPP member countries and so the deal would not bring them much benefit in terms of tariffs.

But they would benefit in the long-run since TPP would require the country to reform its institutions and create a sound and transparent business environment, he said.

Thanh said many wood processing firms from China, Thailand, and Indonesia are moving to Viet Nam to take advantage of the TPP, meaning the competition is going to be fiercer.

Therefore, businesses need to differentiate their products, he said.

Duong Minh Chinh, chairman of Minh Duong Furniture Corporation, said companies in the sector should develop closer linkages to develop as well as improve their designs.

Delegates agreed that modest human resources and low productivity are among the challenges faced by the industry, and called for joint efforts to mitigate the situation. — VNS

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