Local wood industry should focus on design and branding

The wood industry needs to focus on developing design, branding and distribution to achieve the goal of US$20 billion in export value by 2025, according to experts.

 

Vietnamese wood processing enterprises have so far not invested in human resources for product research and design, the experts said. Therefore, the designs of wooden products are often monotonous, so their value is low.

Exported wooden products have been processed under contracts with foreign partners, so the products have low value and competitiveness on the global market. Few companies have their own designs and brands to sell directly to customers.

The issue of branding has become an obstacle for local enterprises to increase exports, while free trade agreements signed between Viet Nam and foreign partners open more export markets for local products, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Local products without their own brands have lower competitiveness on the world market.

Nguyen Chanh Phuong, deputy chairman of the Handicrafts and Wood Industry Association of HCM City (HAWA), said the furniture demand on the global market has shown signs of slowing down, consumer trends have changed and productivity has continued to be low.

Therefore, local enterprises need to renew their production models to meet global demand, Phuong said. They should pay attention to technology in the processing industry, corporate operation, and design and trading of goods. New technologies can help manufacturers create flexible design and production systems.

Online trading is also a trend that has started to develop in the wooden product processing industry, changing local enterprises' measures of production and design, he said.

Local enterprises could increase the value of products by changing production models and developing brands.

Viet Nam gained a total export value of $11.5 billion from wooden products in 2019, exceeding the industry’s own target of $10.5 billion, a 20 per cent increase compared to 2018, according to the Vietnam Timber and Forest Product Association (VTFPA).

Exports of wood products to the US saw a sharp rise in 2019, as well as robust growth to markets including Japan, the UK, Canada, Germany and the Netherlands, said the department of import-export under the Ministry of Industry and Trade.

The department has set a target of $12 billion for wood exports in 2020, a year-on-year increase of 20 per cent, saying the fast growth of large markets such as the US and the EU are major drivers for the industry.

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