Wood sector sees growth despite challenges

Truong Thanh Furniture Corporation (TTF), a home-furnishings manufacturer based in the southern province of Binh Duong, posted $29 million in revenue and around $317,000 in post-tax profit in the first half of this year, compared to counting losses in the corresponding period last year.

TTF leadership revealed that amid numerous headwinds, the company has spared no efforts on strengthening relations with partners both in the domestic and export markets, avoiding reliance on any particular market, and continues to secure confidence from partners despite increasingly stringent requirements for product quality and origin.

"We have kept close eyes on cost optimisation to boost business efficiency. In the domestic market, the company has participated in key projects for the major real estate firms. For export markets, we foster cooperation with large partners, such as Natuzzi, Williams, Sonoma, TJX, among others, in different segments to bolster revenue and order value, striving to gradually deepen footholds in the EU and US," said a TTF spokesperson.

Meanwhile, Phu Tai JSC, based in the south central coastal province of Binh Dinh, and engaged in mining, processing, and the export of wood, building stone materials and more, raked in $128.7 million in revenue, up 6.5 per cent, and $8.46 million in post-tax profit, showing 23.7 per cent jump on-year.

This upbeat outcome came by way of increased sale volume, diminished interest and financial costs, and rising income from foreign exchange rate difference.

Thuan An Wood Processing JSC (GTA) based in the southern province of Binh Duong, the company’s CEO Le Thi Xuyen revealed that the current order intake situation is optimistic as the company has signed orders until November, and the labourers currently have to work extra shifts to meet delivery time.

"The company will do its utmost to secure new orders to be able to reach all set business targets for the rest of the year," said Xuyen.

In the first half of this year, GTA’s revenue rose 11.2 per cent on-year to reach $5.7 million, meanwhile its post-tax profit shed 20 per cent on-year, falling to over $154,000.

The company saw lower profits compared to last year because it benefited from a 30 per cent land rent reduction in 2023, in addition to soaring sale expenses and transportation costs.

GTA currently operates two wood processing plants based in Thuan An city, Binh Duong province, and in Chon Thanh district, Binh Phuoc province, exporting products to Australia, the US, the UK, and EU.

From early 2024 until present, the wood sector incurred five trade safeguard lawsuits from South Korea, Canada, and the US.

Meanwhile, the EU has enacted regulations on Deforestation-free products, resulting in stiffer competition and driving up compliance costs for wood exporters.

Do Xuan Lap, chairman of the Vietnam Timber and Forest Products Association, believes that to sustain competition, firms need to reduce prices, ensuring their products remain competitive, but are also designed well and made with good quality.

"In addition, businesses in the sector need to produce products based on customer design, while also initiating their own design to sell directly to customers. This requires firms to bolster investment and trade promotion to directly access the customers," said Lap.

Duc Thanh Wood and GreenYellow join forces on solar energy deal What can a business do to reduce nearly 2,000 tonnes of CO2 per year? Plant 3,000 trees? An alternative method has been shown by Duc Thanh Wood JSC's collaboration with GreenYellow, a giant in the renewable energy sector, to install solar energy panels on its factory in the southern province of Binh Duong.

Building contractors eye rosier prospects after tough 2023 Many building contractors returned to a profit in the first quarter of this year and have a bright outlook for the rest of 2024.

More to do to ensure performance Vietnam’s economic growth is forecast to bounce back gradually, but enterprise performance remains weak.