Wood sector sees signs of recovery
Wood sector sees signs of recovery
Despite Vietnam’s export market still being fraught with challenges, businesses in the wood industry are expediting measures to bring about a recovery for the sector.
The General Department of Vietnam Customs’ figures show that by March 15, wood and wooden furniture took the lead in the export value in the agricultural sector, totalling $2.86 billion, showing a 30 per cent jump on-year.
Bui Ta Hoang Vu, director of Ho Chi Minh City Department of Industry and Trade, revealed that the order intake from businesses in the sector in the first quarter has been fairly positive.
As such, businesses have received orders until the end of June, with some others even securing orders until the end of the year.
Unlike 2023, this year is witnessing a potential global market recovery, with positive signs being felt in Ho Chi Minh City and the southern region.
Duc Thien Co., Ltd. based in the southern province of Binh Duong has secured export orders until the end of June, and Le Ha Trong Chau, one of the company’s representatives revealed that each month, the firm exports 10–15 containers of products, generating over $1million in export value, with their products mainly going to the United States.
"Based on the current situation, we expect to attain 20 per cent growth in total export value for 2024," said Chau.
Nguyen Chanh Phuong, deputy chairman of the Ho Chi Minh City Handicraft and Wood Industry Association (HAWA), believes that businesses in the wood and handicraft sectors could make a significant breakthrough this year as inflation in the US eases.
"The market is showing signs of recovery, with surging demand for material imports, while in the domestic market, the lending rate is becoming more stable," said Phuong.
Geopolitical conflicts are driving up logistics costs and the requirements on preventing forest degradation shall be applied in the EU starting from late 2024.
The US is applying anti-dumping regulations. Businesses in the sector need to be well aware of the situation to come up with suitable measures.
Tran Quoc Manh, deputy chairman of the Vietnam Handicraft Exporter Association, noted that many produces in the sector have teamed up with foreign partners, taking the initiative in creating new distinct patterns to dominate target markets.
The export figures to new markets such as China, India, Malaysia, Cambodia, Laos, and Indonesia have seen fair growth.
For instance, along with developing new patterns, Minh Phat 2 Co., Ltd., based in Thuan An district in Binh Duong, is focused on restructuring to save on costs.
"Despite such difficulties, the company is setting part of our budget to invest in machinery to reduce labour costs and reach a consensus with our workers. All measures are aiming to boost production and business efficiency to survive these challenging times," said Dien Quang Hiep, of Minh Phat 2.
The HAWA's Phuong also revealed that this year about 10 businesses would be taking part in Index Dubai 2024, an upscale interior design event set for June.
In addition, the Ho Chi Minh City Investment and Trade Promotion Centre also supports the HAWA to have a booth at the 2024 Milan Design Week in mid-April.
"We will select more producers and suppliers to join other events for trade promotion later this year," said Phuong.
