A wood processing plant in Binh Duong. The wood processing industry is making efforts to regain growth momentum. (Photo: VNA)Do Thi Kim Loan, General Director of Sao Nam Trading andProduction Co., Ltd, which makes wooden flooring, said the company’s exportorders are down 35-40% year-on-year this year as orders from the US market, itsmajor export market, drop sharply.
“With exports to the US plunging, we seek to export to Canada andaccept outsourcing orders from Australian customers.
“Australian wood flooring importers ship materials to my company,we carry out the final processing stages, pack and re-export them.
“This is an adaptation to partially offset the decline in ourmajor market.”
Binh Duong-based furniture company Bao Hung has also seen a sharpdrop in orders from the US, its key market, this year.
Phung Quoc Cuong, its marketing director, said to cope the companyhas adjusted prices and developed new products.
“Demand from the US, EU and Japan has reduced. But if businessescome up with new designs and products, it will change customers' perceptionsand might spur a recovery in demand."
Nguyen Phuong, merchandise director of Minh Thanh Co., Ltd, saidwhile in general consumers are tightening spending there are still some whohave a need, but they have higher requirements in terms of quality and designdifferentiation. So businesses that invest a lot in design and developing theirown products would surely attract international buyers.
Besides developing new products, Vietnamese enterprises are alsoincreasingly setting up sales teams and attending local and foreign fairs totry and find a way into new markets, Phuong added.
Do Xuan Lap, Chairman of the Vietnam Timber and Forest ProductsAssociation (VIFOREST), said exports had been strong in the first half of lastyear, but orders have dropped sharply thereafter, and companies have gottenjust a few orders this year.
“In the past exports would usually go up by 15-20% in January, butthere was no growth this year.”
The gloomy housing market due to monetary tightening and interestrate hikes globally to fight inflation has affected demand for furniture, heexplained.
Enhance trade promotion
To enable the industry to find new customers in both traditionaland new markets, five associations in Vietnam (VIFOREST, HAWA, BIFA, DOWA, andFPA) joined hands to organise the 2023 Ho Chi Minh Export Furniture Fair – HawaExpo2023 in HCM City from February 22 to 25, he said.
The event attracted 210 exhibitors, of whom 80% were Vietnamesefurniture manufacturers while the rest coming from China, the US, Germany,Singapore, Japan, Thailand, Indonesia, the Philippines, and Denmark.
Nguyen Hoai Bao, an executive board member of the Handicraft andWood Industry Association of HCM City (HAWA), said: “The fairwas successful, attracting 16,062 visitors, including 2,653 visitors from 100countries and territories.
“Sixty four contracts and MoUs were signed at HawaExpo 2023 andthe estimated value of transactions at the fair is 3.6 million USD.”
Dang Rang, manager of A&M Industry Vietnam Co., Ltd, saidHawaExpo was an effective forum for his company to advertise products and seeknew partners.
“Through the fair, besides getting new orders from foreigncustomers, it was quite surprising that we received an order for wooden sofasfrom the domestic market.”
To add more value to furniture products, local manufacturers needto make further investment in design to produce their own products instead ofmanufacturing furniture to designs provided by buyers, he said.
Nguyen Liem, Chairman of the Binh Duong Furniture Association andfounder of Lam Viet Furniture, said HawaExpo took place at a unique time whenthe wood industry lacked export orders, and so participating in the fair gavebusinesses a good opportunity to access new customers.
Bao said the organisers have also created a virtual exhibition onHopefairs.com that showcases 28,000sq.m of the fair. It will remain there forthree months.
“Buyers and visitors who missed the physical fair will be able tosee every single booth and product and continue to make B2B connections throughthe virtual exhibition.”
This year the industry has set an export target of 17.5billion USD, a year-on-year increase of 2.5%./.
VNA
