Vietnam forestry sector exports expected to reach $9 billion this year

Vietnamese exports of forestry products are forecast to amount to US $9 billion in 2018. During 2017, the exports of wooden and other forestry products reached 10.2%, to US $8 billion, a value that had been targeted for 2020.

According to Nguyen Quoc Khanh, chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (Hawa), over the past seven years, exports of wood and wooden products rose by 12.3% per year, and are predicted to rise even faster in the coming three years.

As Vietnam News Agency reported, at the moment, Vietnam has less competition from other countries, due to the fact that China is no longer as competitive, having slapped export taxes on wooden products even as it faces a lawsuit the US has brought against it for dumping furniture.

Also, Italy and Germany have cut down production because of the rising costs, while Malaysia and other Asian countries don’t have the necessary workforce to support the production. Though the furniture demand worldwide is still high, Vietnam’s exports represent a small part, meaning there is still considerable scope for firms in Vietnam to expand their market share, Vietnam News reported. 

Yet, the wood industry sector has realized a great achievement with the US $8 billion in exports, so the increasing global demand means that the country would have more opportunities to increase their market share.

Nguyen Xuan Cuong, Minister of Agriculture and Rural Development, said that consumers have higher demands and furniture producers in turn need to raise the quality of their products alongside features and designs to add value to their products.

Yet, as to achieve the export target of US$9 billion this year, Cuong has suggested that firms invest more in technology and business management in order to boost productivity as well as sustain quality. In addition, he also advised that firms “diversify timber sources” to avoid high prices while also bypassing illegal sources, according to Vietnam News Agency. However, as the U.S. has cut income tax to support the local furniture producers, Vietnam should not export products that American firms are producing, as Vietnam News Agency reported.

“I think the export target of US$9 to US$10 billion is easy to achieve,” general director of Lam Viet Joint Stock Company, Nguyen Lien, said. “Businesses have prepared well to capitalise on market opportunities.”

Moreover, as many international buyers are moving from China to Vietnam, the wooden products market is developing very well.