Positive signals from the import market

According to data from the General Department of Customs, in the first 6 months of 2024, the United States was the largest importer of wood and wood products from Vietnam with 4.1 billion USD, up 24.5% over the same period. Meanwhile, the total export value of the whole industry was 7.5 billion USD (including non-timber forest products, it was nearly 8 billion USD), up 23.1% over the same period.

Wood industry businesses are transforming for sustainable growth.

Not only has import orders increased sharply, but good news for the Vietnamese wood industry is that on July 17, the Department of Trade Defense, Ministry of Industry and Trade, announced that the US Department of Commerce (DOC) has issued the final conclusion of the investigation into the scope of products and anti-dumping/anti-subsidy tax evasion on wooden cabinets imported from Vietnam.

According to the Department of Trade Defense, the DOC has canceled all anti-dumping/anti-subsidy tax evasion investigations on wooden cabinets imported from Vietnam. Thus, Vietnamese wooden cabinet exporting enterprises that do not fall into the above 3 cases are exempted and do not have to pay anti-dumping/anti-subsidy tax when exporting to the United States.

In addition, the Import-Export Department (Ministry of Industry and Trade) said that the United States currently accounts for about 53% of the total export turnover of wood and wood products from Vietnam. Analysis of the annual cycle shows that the trend of increasing imports of wooden furniture in major markets often increases sharply in the last 3 months of the year, when the housing market enters completion and the need to purchase and renovate interior equipment to welcome the new year will be signals to help wood orders surge at the end of the year and aim to reach a record of 17.5 billion USD in export value for the whole industry.

As a business with decades of experience exporting furniture, mostly to the United States, Mr. Chao Chung Lee, Chairman of Shingmark Group, shared that since the beginning of the year, this business has had orders until the end of October and there are many positive signs waiting for the end of the year.

According to Mr. Nguyen Chanh Phuong, Vice President of the Handicraft and Wood Processing Association of Ho Chi Minh City (HAWA), export orders of enterprises in the industry have grown quite positively. Compared to the same period last year, the increase in the first half of this year was about 22-25%. Many enterprises have orders until the third quarter or even the fourth quarter of 2024.

Notably, in addition to traditional markets such as the US and China, new markets such as India and the Middle East... that businesses have recently exploited have also shown positive signs.

Specifically, China reached 1.05 billion USD, up 49.3%. Or Canada reached 113.3 thousand USD, up 23.9%; India 73.6 thousand USD, up 94.2%...

Choose to reduce processing and increase unique value as a new direction

Wood is an industry with high export value and has increased rapidly in recent years in our country. However, the added value of this industry is not high because domestic enterprises are mainly processing. According to the assessment of leading experts, currently only about 5% of our country's wood products have a design stage, which is an important stage in increasing the added value and affirming the brand of domestic wood products.

Speaking about this issue, Mr. Phung Quoc Man, Vice President of HAWA, said that the wood industry's annual turnover of tens of billions of USD mostly comes from processing for international orders, with the US being the largest. There are still not many self-created products.

“When we depend on 1 or 2 main markets like that, when that market has problems, reduces purchases or has strict requirements and criteria that we have not yet met, this is a huge challenge for businesses,” Mr. Man analyzed.

Mr. Man advised that instead of the fact that most businesses only accept processing orders, the real value of the Vietnamese wood industry is still not much. In the coming time, wood businesses need to be creative and manufacture by investing and designing their products. Organize marketing and product promotion to increase product value and profit and withstand market fluctuations.

To produce and export wood and wood products with higher added value, Vietnamese enterprises need to invest in technology and digital transformation to limit the export of wood chips, round wood and raw materials, and instead promote the processing of refined products to meet market demand.

Self-recognition of the internal capacity of enterprises is still limited when most of them process according to orders and designs of foreign distributors. Many enterprises are also gradually starting to invest in technology, machinery, labor skills and raw materials... to create high-value products for themselves.

For example, AA Architecture Construction Joint Stock Company spent 40 billion VND to invest in SAP, a production management software that helps increase management capabilities down to the construction site, manage each product and promote work progress within the company. Accordingly, there is no longer a situation of work being stagnant or goods being lost, work errors are also reduced to the lowest level...

With 15 years of experience supporting businesses in implementing management systems and digital transformation, Mr. Ha Tat Thang, Director of Techworld Solutions Vietnam Co., Ltd., assessed that the number of businesses in the wood industry investing in digital transformation is still very small. The main reason is that most businesses in this industry are small-scale and mainly do processing.

However, Mr. Thang also pointed out that normally a digital transformation investment project will take about 5 years to recover capital and a business with a scale of about 1,000 workers will have an investment cost of about 10-15 billion VND. Thus, with the trend of gradually shifting to design, innovation, and reducing processing. Many businesses should soon start applying technology to create products with competitive advantages in the current context.