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Inflation hits sales of timber furniture, goods
Many wooden furniture and handicraft companies have been cutting back production or seeking new markets to deal with slow sales caused by inflation.
Duong Ngoc Minh, Deputy Director of Thuong Nguyen Company in southern Binh Duong Province, which specialises in producing pottery products, said his company's sales in the first six months was only one-third of the figure for the same period last year.
His company cut back production because products were not selling in stores, Minh was quoted a saying in Dau Tu newspaper.
"The situation in the last six months of the year will not be better because inflation is still high and people will not spend much money for interior home decor products. The company may switch to other kinds of businesses," he said.
Mai Thanh Phung, who is responsible for the sales division of the Ho Nai Handicraft and Services Co-operative in southern Dong Nai Province, said the price of material inputs had increased by 30 per cent in the first six months of the year.
The price of the co-operative's products have only increased by a few per cent, but customers have had difficulty accepting it.
The co-operative's sales in the first six months of the year fell by 30 per cent against the same period last year.
With this situation, the co-operative would operate moderately for some time, Phung said.
Le Dang Giao, Director of the Hoa Binh Company, which exports its wood furniture products to the US and EU, said his company's sales in the first six months of the year only reached 70 per cent of the company's target.
Giao said he hoped that sales in the last six months of the year would improve, as orders which his company received for the last six months of the year had increased by 20 per cent against the first six months of the year.
Tran Quoc Manh, Deputy Chairman of the HCM City Handicraft and Wood Industry Association (HAWA), said since the beginning of this year a large number of wooden furniture and handicraft companies had not earned a profit and had to cut production.
"Wooden furniture and handicraft companies are reaching peak difficulty. If the situation does not improve, many members of HAWA will switch to other kinds of businesses or stop operation," Manh said.
To support members, HAWA is searching for new markets, according to Manh. HAWA is now seeking more outlets in China, a large market for such goods.
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