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Wood industry wilts under downturn
The wood processing industry will struggle to reach its target export value of US$3 billion this year, according to an official from the Viet Nam Timber and Forest Product Association (VFA).
So far, firms had clocked in $2.8 billion from wooden products, 13.4 per cent higher than in 2007, but only 60 per cent of the same period last year, said Nguyen Ton Quyen, VFA deputy chairman.
Quyen was speaking at a seminar on opportunities, challenges and recommendations for sustainable development of the wooden product processing industry, held in Ha Noi yesterday.
The economic downturn was taking its toll on demand in key export markets, he said. Demand on furniture and out-door chairs and tables in the US and European markets were set to drop 30-35 per cent this year and several contracts were expected to be cancelled.
On top of this, wooden product processors were also facing shortages in raw materials and had to import 80 per cent of their material, he said. To get the material, they must compete with enterprises from China, Indonesia and Malaysia.
Material could be bought at home, but wood processors also came up against competition from the paper industry, he said.
Survival tips
To gain a growth of 8-10 per cent in export value of wooden products this year, wooden product processors should improve their methods of updating and analysing business information on the world market and their export markets, the association said. They should cut costs for production and sharpen their competitive edge on the regional and world market.
Besides traditional export markets in the US, the EU and Japan, processors should expand their export market to Russia, Eastern European and African countries, Quyen said, adding that they also should build a trademark to export their products directly.
Firms should diversify their products, designs and boost quality of products so they can compete with goods produced in other countries like China, the association suggested.
The industry should lay out a plan to develop 825,000ha of forest to provide 22 million cu.m of wood a year or 70 per cent of the total demand for wood processors.
Look to home
Up against a tough road in terms of exports, many firms are looking to the domestic market to boost sales.
Tran Quoc Manh, VFA deputy chairman and chairman of Sadaco, said most wood product processors focused mainly on export markets while imported wooden products accounted for 80 per cent of the domestic market. Customers preferred imports with prices 30-50 per cent higher than that of domestic goods because of diversification of designs and good distribution systems.
Many companies wanted to sell their products on the domestic market but they did not have a professional plan on how to sell the goods at home.
Hung Long is one of a few wooden product processors to focus on the domestic market.
Tran Duc Thuan, director of the company said they had spent 10 years studying and developing wooden products for domestic consumers. The company has expanded to sell its products at furniture markets nationwide and have trade promotion programmes for its products.
Hung Long expects to hold 80 per cent of the domestic market this year, 30 per cent more than 2008.
VietNamNet/Viet Nam News
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