Viet Nam’s wood industry needs to focus on improving designs, creating brands and preventing fraudulent activities to ensure healthy growth, an industry meeting heard.

Speaking at the meeting held in Long An Province last week, Nguyen Quoc Khanh, chairman of Handicraft and Wood Industry Association of HCM City, said: “Designs and branding will play a vital role in creating competitiveness for the country’s wood and furniture processing industry in the long term.

“The stage of competing on lower prices is over in the world market; now the market is competing on quality and in future will compete on creative values with a focus on unique personal designs.”

Minister of Agriculture and Rural Development Nguyen Xuan Cuong said the wood industry has set itself an ambitious target of US$20 billion worth of exports by 2025 based on the strong growth and high demand in local and international markets in recent years.

The industry’s exports were worth $11.5 billion last year, making it one of only three industries with exports of over $10 billion, he noted.

The figure exceeded the target of $10.5 billion and represented a 20 per cent increase from 2018, he pointed out.

Viet Nam has an advantage in terms of timber availability, and its wood companies actively update technology to grasp market trends and assert their strong position in the global furniture market, he noted.

Do Xuan Lap, chairman of the Viet Nam Timber and Forest Product Association, listed some problems faced by the industry.

He said local businesses find it tough to get land to build factories or expand production.

The scarcity of human resources and low timber quality are also urgent issues that need to be resolved, he said.

Vietnamese firms earn low profits since they mostly export raw materials or do subcontracts for foreign partners, he said.

“Viet Nam imports 20-21 per cent of the timber it needs for production.”

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To achieve the export target of $20 billion by 2025, the association called for developing sustainable value chains in the wood industry and urged industry players to quickly build value chains.

The value chain, which includes numerous tasks from planting forests and processing to commercialisation of wood products and exports must be linked and integrated into firms’ long-term development strategies, it said.

It is important to have concentrated production areas for timber companies, develop planning, train high-quality human resources, and grow quality timber, it said.

It is also vital to create a good environment for businesses to invest in and adopt modern technologies, it added.

Experts said the US is likely to remain Viet Nam’s largest export market this year.

In the first 10 months of last year, Viet Nam’s wood exports to the US were worth nearly $4.2 billion, a 34.5 per cent increase year-on-year, and accounting for almost half of the country’s wood exports.

But such rapid growth usually entails risks and Vietnamese firms can expect stricter regulations in future as the US ramps up protectionist measures.

Vietnamese Government has taken concrete steps to prevent foreign goods from being falsely labelled as made in Viet Nam. Trade authorities have warned Vietnamese firms against taking part in fraudulent activities.

In recent years Viet Nam’s timber industry has made great strides, making the country Asia’s second largest exporter of wood products after China.

Last year Viet Nam, the world’s fifth largest exporter, earned an estimated $11.5 billion from exports. Its major export markets include the US, Japan, China, and the EU.

Viet Nam accounts for 6 per cent of the global timber and wooden furniture exports of an estimated $120 billion. The country has some 5,400 timber companies, which create more than 500,000 jobs. — VNS