Wood industry expands markets to sustain growth momentum

Wood industry expands markets to sustain growth momentum

With an export value of nearly US$10 billion in the first seven months of this year, the sector not only ranks among the country's top five largest export industries but also leads in the agriculture–forestry–fishery group.

A worker checks wooden product before packaging for export in a wood processing company. — VNA/VNS Photo

The wood and wood products industry holds a prominent position in Việt Nam’s export landscape, but to maintain and accelerate growth, the sector must swiftly expand into new markets and avoid overreliance on a few key destinations.

With an export value of nearly US$10 billion in the first seven months of this year, the sector not only ranks among the country's top five largest export industries but also leads in the agriculture–forestry–fishery group.

According to Deputy Minister of Agriculture and Environment Nguyễn Quốc Trị, the wood industry is a pillar of agricultural exports.

Its success lies not only in export figures but also in promoting the Vietnamese brand internationally.

To ensure long-term sustainability, the industry must move beyond dependence on a limited number of markets.

The US, the EU, Japan and South Korea currently account for over 80 per cent of Việt Nam’s wood exports, with the US alone making up more than 50 per cent of total export value.

This heavy dependence exposes businesses to significant risks, especially when these countries tighten trade policies or impose new technical barriers.

Both the US and EU were increasingly demanding traceability, sustainable forest certifications, and even carbon footprint calculations, noted Nguyễn Thị Thu Trang, Director of the Centre for WTO and International Trade under the Vietnam Chamber of Commerce and Industry (VCCI).

Without early preparation, wood enterprises risked losing competitiveness, even with lower prices, she said.

Many businesses are also expressing concern. The Thời báo Ngân hàng (The Banking Times) quoted Lê Minh Tấn, director of a furniture company in Bình Dương, who shared that his company primarily provided outsourcing services for American and Japanese partners.

When orders dropped, his factory was forced to operate at minimal capacity, he said.

Market diversification

Experts have suggested the wood industry must pursue two key strategies, which are market diversification and product value chains upgrading.

In addition to traditional markets, Việt Nam has strong potential in regions such as the Middle East, South Asia, South America and Eastern Europe.

These areas are undergoing rapid urbanisation with rising demand for housing and interior furnishings.

For example, Saudi Arabia and the UAE are developing massive urban projects, creating multi-billion-dollar demand for furniture annually.

Furthermore, the industry must move beyond low-cost segments or purely outsourcing. Investment should be channelled into smart furniture, custom designs and eco-friendly products, and others, according to the experts.

These high-value segments enhance order value, improve profit margins, and help build long-term brand equity.

Trần Quốc Mạnh, vice chairman of the Vietnam Handicraft Exporters Association, said that Việt Nam’s furniture industry must aim for Net Zero with eco-friendly products.

This was not only a global trend but also a strict requirement from major markets like the EU, US, Japan and the Middle East, he said.

In addition to diverse designs, most import markets now demanded green and sustainable products, he added.

These factors offered long-term competitive advantages. Wood enterprises also needed to accelerate digital transformation and restructure operations to improve competitiveness and reduce production costs, especially as order volumes and prices showed signs of decline.

Leveraging trade agreements

One major advantage for the industry is its ability to leverage next-generation FTAs such as the EVFTA, CPTPP and UKVFTA.

These agreements grant Vietnamese wood products preferential tariffs in markets like the EU, Canada, the UK, and CPTPP countries.

However, opportunities come with challenges. The EU has begun to implement the EU Deforestation Regulation (EUDR), which requires proof that wood products are not linked to deforestation.

Đỗ Xuân Lập, chairman of the Vietnam Timber and Forest Products Association (VIFORES), emphasised the importance of proactively developing legal and transparent raw material zones.

Once producers met the highest standards, wood products could confidently conquer even the most demanding markets, he said.

Many wood enterprises had already begun restructuring their operations to adapt, said Lập.

Some major companies were investing in custom designs and building domestic furniture brands alongside exports. Others were shifting to outdoor wood products and composite wood to tap into new consumption trends, he added. 

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