Woodworking industry is among the agricultural export sectors with the highest value, contributing significantly to export growth and the country’s economic development. However, new challenges such as tariffs, legal raw materials, and reduced purchasing power from major export markets pose difficulties, forcing enterprises to restructure and enhance their competitiveness in order to survive and develop sustainably.
Currently, there are over 5,000 enterprises engaged in wood and timber product processing across Viet Nam, of which private enterprises account for 95%. About 3.5% have capital investment exceeding 50 billion VND. Approximately 2,000 enterprises are involved in producing wood products for export, with domestic companies holding a 65% market share.
Market pressures
According to the Viet Nam Timber and Forest Product Association (VIFOREST), exports of wood and timber products continue to maintain steady growth in major markets. Exports to the US market are higher than the same period last year, while exports of wood chips and pellets to Japan, China, and the Republic of Korea (RoK) are maintaining good growth rates. The EU market, mainly for indoor and outdoor wooden furniture, has also seen slight growth.
However, Vietnamese wood export enterprises are facing two major challenges. Firstly, the US market, which contributes over 54–56% of total wood export revenue, has been affected by a 20% retaliatory tariff policy, announced by the White House on August 1.
In the EU market, Vietnamese enterprises contribute significantly to the segments of indoor and outdoor furniture and wood pellets, averaging over 1 billion USD annually.
Recently, the EU enacted the EU Regulation on Deforestation-Free Supply Chains (EURD), prohibiting the import of agricultural products such as coffee, rubber, soybeans, wood, and palm oil with links to deforestation globally. This regulation will take effect in January 2026.
Given these challenges, Vietnamese enterprises have striven to meet the stringent commitments on building sustainable supply chains, avoiding deforestation, and complying with international standards.
Other key export markets, including Japan, China, and the RoK, also present challenges related to timber origin verification, environmental protection requirements, compliance with green production standards, and greenhouse gas emission reduction.
Pressures from export markets also present opportunities for enterprises to reconsider their growth models, increase adaptability, and respond effectively to external market fluctuations.
VIFOREST Vice Chairman Ngo Sy Hoai
According to VIFOREST Vice Chairman Ngo Sy Hoai, the global economic volatility in 2025 and beyond, along with geopolitical conflicts, will affect transportation costs, raw wood prices, and trade regulations, impacting export activities.
Nevertheless, he pointed out that these pressures from export markets also present opportunities for enterprises to reconsider their growth models, increase adaptability, and respond effectively to external market fluctuations.
He stressed that growth can no longer rely on comparative advantages such as cheap raw materials and low labour costs; it must shift towards competition based on quality and branding. Moreover, enterprises need to expand and restructure export markets to diversify.
Many potential markets such as China, Japan, and other markets like the UK, Russia, the Middle East, South America, and ASEAN remain underexploited. This new segment presents great opportunities for enterprises to advance and enhance their competitiveness for sustainable exports.
Enhancing competitiveness
Vietnamese exports of wood and timber products have risen steadily every year, from 6.9 billion USD in 2015 to a strong 16 billion USD in 2024, with a projected increase to over 18 billion USD by the end of this year.
Therefore, building and developing stable raw material sources is an essential requirement to enhance the competitiveness of enterprises.
Currently, domestic forest product raw materials meet only about 70% of the production and processing needs of enterprises.
Regarding timber, Viet Nam still imports an average of 5.5–6 million cubic metres of raw wood annually. According to the Forest Trends, Viet Nam has become an important global supplier of wood products.
Deputy Minister of Agriculture and Environment Nguyen Quoc Tri has urged enterprises to strengthen coordination with forest growers and forest owners to develop large timber forests and raw material areas with high productivity and quality. This mutually benefits growers and allows enterprises to control legal, certified, and traceable raw material sources that meet export market requirements.
Currently, about 500,000 workers are employed in Viet Nam’s wood processing and export sector, 55–60% of whom are well trained and proficient in operating new equipment and technology.
Alongside securing stable raw materials, enterprises must promote the application of science and technology, creating new structural designs and models to meet market demands, especially for the high-end product segment.
Currently, about 500,000 workers are employed in Viet Nam’s wood processing and export sector, 55–60% of whom are well trained and proficient in operating new equipment and technology.
Enhancing the workforce training, shifting production methods from manual to modern, reducing environmental impact through green production, moving from fragmented operations to value chain linkage have brought great value to forestry product businesses.
The global furniture and wood product trade market holds great potential, with a trade value of approximately 430 billion USD for indoor furniture and 150 billion USD for outdoor furniture. Viet Nam’s wood and forest product exports only account for about 6% of the global market share.
Thus, enterprises need to maintain stable growth in current markets, seek to expand into new and potential markets, and foster negotiations and implementation of forestry cooperation programmes with key countries, especially with countries boasting high trade values.
Functional agencies need to continue supporting Viet Nam’s wood processing associations and enterprises with market information, legal regulations, enhancing their capacity in supply chain management, quality control, traceability, and enterprise classification.
Additionally, the effective use of trade promotion funds is essential in researching and evaluating trends, expanding markets, seeking partners, supporting enterprises in participating in trade fairs and forums, and promoting the forestry product sector to create sustainable linkages.
