With its internal strength, Vietnam's wood processing industry is likely to achieve its export target of $17 billion this year in light of the recent recovery of new orders.
"The Binh Duong International Wood, Machinery, and Materials Exhibition—BIFA Wood Vietnam 2023—saw the participation of more than 100 leading domestic and international manufacturers. The expo is an opportunity to create a vertical chain in the wood industry, supporting the sustainable development of businesses in the future," said Nguyen Quoc Tri, Deputy Minister of Agriculture and Rural Development, on August 9 at the opening of the event.
Nguyen Quoc Khanh, chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA) said, "Vietnam's wood processing industry has witnessed a new wave of movement, expanding its business scale. Many Vietnamese businesses have adapted their strategies during the slowdown. Large furniture brands are expanding their presence in potential export markets in Middle East countries, including Saudi Arabia and Dubai, to access opportunities to supply furniture for mega projects."
However, Vietnam's wood and timber companies are worried about the gloomy outlook of the main import markets, such as the Unitded States and the EU. Meanwhile, the recovery prospects of Vietnam's timber and wood industries are not stable. Exports of wood and timber products decreased by 25.5 per cent in the first seven months of 2023 compared to the same period last year, according to the Ministry of Agriculture and Rural Development (MARD).
Vietnam has become the world's fifth-largest exporter of wood and timber products, with the second-largest exporter in Asia trailing behind China. The growth of Vietnam's wood industry is highly dependent on exports, so it is vulnerable to the ups and downs of the global economy.
For many years, Vietnam has been a top supplier of wood and timber products to the US and EU markets. However, consumer demand in these markets for wooden furniture products gradually cooled. At the same time, the disruption during th pandemic has prompted the US and EU to diversify their supply chains, leading them to import more from neighbouring countries such as Mexico and Brazil.
"The two neighbouring countries, which boast the advantage of short delivery times, have promoted wooden furniture exports to the US market in recent years," said Khanh. "Previously, these two countries were not rivals of Vietnam's wood industry because of the high cost of wood products. However, these two countries are attracting the attention of US importers as they consider the possibility of diversifying supply chains."
According to a report by Offshore International, Inc. released in early 2020, Mexico is home to more than 675 furniture factories, including domestic and foreign enterprises, employing over 52,000 employees.
Mexico has become the fourth-largest exporter of wooden furniture to the US market, trailing behind China, Vietnam, and Canada. With 95 per cent of Mexico's export value going to the US market, Mexico exported $1.5 billion of furniture to the US in 2020, up 6.7 per cent compared to 2019.
Vietnam is aiming to develop timber processing into an important economic sector, developing prestige brands of Vietnamese timber products in both domestic and foreign markets, and striving to put the country into a top position on the global map.
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