Vietnam Among World's 5 Largest Wooden Furniture Exporters
Enterprises in the woodworking industry have begun to receive orders again to serve the furniture shopping season in the year-end months on the world market, heard a recent forum, VNA reported.
The volatility and unpredictability in global markets may have caused challenges for many industries, including woodworking, but offered opportunities to agile businesses, experts said at the forum.
The Department of Forestry reported that forestry product exports amounted to an estimated USD 6.42 billion in the first six months of the year, a 28.8% year-on-year decrease, with wood and wood product exports dropping by 29% to USD 5.96 billion .
|Vietnam expects to earn 25 billion USD from the export of wood and wooden products by 2030. Photo: VNA|
A preliminary survey by the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA) found that export orders of enterprises in the industry decreased by 30% at the start of the year, but began to recover in July ahead of the global year-end furniture shopping season.
Speaking at the Vietnam Wood and Furniture Industry Forum held by HAWA in HCM City last week, Pham Phu Ngoc Trai, Chairman of Global Integration Business Consultants, said the current reduction in export orders is temporary and the furniture industry has considerable growth potential for the next five to ten years.
Compared to global GDP which is forecasted to grow by 3% this year, the world furniture industry's compounded growth rate stands at 4.5%.
According to Statista Market Insights, the world furniture market revenue may reach USD 766 billion in 2023 and is estimated to hit approximately USD 932 billion in 2027, he said.
Vietnam ranks among the world's five largest wooden furniture exporters, underlining its solid internal resources, he added.
HAWA Chairman Nguyen Quoc Khanh has a similar view, stating that woodworking firms showcased their business integration initiative. During market downturns, businesses remained proactive by reorganizing production and streamlining operations to reduce costs while also seeking support from trade promotion agencies to explore new markets.
Khanh pointed out a new trend in the woodworking industry, where significant furniture brands from Vietnam are expanding into promising export markets, notably super-rich countries in the Middle East such as Saudi Arabia and Dubai with an eye on supplying products to new super real estate projects there.
With the industry's internal strength and the return of orders, the industry's export target for 2023 is considered attainable, he said.
|A preliminary survey by the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA) found that export orders of enterprises in the industry decreased by 30% at the start of the year, but began to recover in July ahead of the global year-end furniture shopping season. Photo: VNA|
Experts at the forum emphasized the importance of businesses strengthening their internal resources to be prepared for order resumptions in the recovering market and embracing green transformation to improve competitiveness.
Sustainability in interior products is now a mandatory requirement, not just a voluntary standard, Trai said.
He said Vietnamese businesses will face new demands such as the EU's Carbon Border Adjustment Mechanism (CBAM), effective from October 2023.
Vietnam raked in an estimated USD 6.42 billion from forestry product exports in the first half of 2023, down 28.8% year on year, according to the Department of Forestry under the Ministry of Agriculture and Rural Development.
The revenue, equivalent to 36% of this year's target, comprises USD 5.96 billion worth of wood and wood products and USD 455.7 million in non-wood items, respectively falling 29% and 26.2%. That also resulted in a trade surplus of USD 5.32 billion, or 70% of the figure in the same period of 2022, statistics showed.
Goods imported into the European market may incur additional costs if they fail to adopt a lower-emission production model and earn carbon credits.
Vietnam's wood industry possesses significant reserves of planted forests, which, if well-managed and connected, offer opportunities for Vietnamese furniture enterprises to capitalize on the carbon credit market, he said.
The woodworking industry should reposition its goals and vision to become the world's green and sustainable furniture hub, he added.
Pham Thi Ngoc Thuy, Director of the Private Economic Development Research Board, pointed out that market challenges related to the European Union Timber Regulation (EUTR) and net-zero goal will push Vietnam's wood and forest product processing industry in a more positive direction, encouraging further outreach and attracting foreign investment.
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