Intermediate goods like plywood, woodchips, lumber, joint board, and wood pellets are expected to again be the major export growth driver for the wood processing industry this year. — Photo nhipsongkinhdoanh.vn

HCM CITY — The wood processing industry has set itself a modest export target of US$17.5 billion for this year, an increase of just 2.5 per cent over 2022, due to unfavourable conditions in the global market, the Vietnam Timber and Forest Product Association said.

Exports were worth US$16.9 billion last year, up 6.1 per cent from 2021, the lowest growth rate in recent years.

VIFOREST chairman Đỗ Xuân Lập said exports had been strong in the first half of last year, but orders had dropped sharply thereafter, and companies had gotten just a few orders this year.

“In the past exports would usually go up by 15-20 per cent in January, but there was no growth this year.”

The gloomy housing market due to monetary tightening and interest rate hikes globally to fight inflation had affected demand for furniture, he explained.

The industry has two main export product groups: highly processed products like furniture and intermediate goods like plywood, woodchips, lumber, joint board, and wood pellets, according to Lập.

Export of the second group rose strongly last year, with pellet and chip exports rising by 50-60 per cent and 35 per cent, and this product group is expected to again be the major export growth driver this year.

He also forecast furniture exports to gradually increase this year.

“Việt Nam’s furniture products are mainly exported to the US and European markets. Their economies will warm up, inflation is decreasing, and so demand for furniture will rise.”

The wood industry associations across the country were helping firms look for new customers, including by organising the Hồ Chí Minh Export Furniture Fair (HawaExpo 2023) from February 22 to 25, he said.

Nguyễn Quốc Khanh, chairman of the Handicraft and Wood Industry Association of HCM City and chairman of AA Corporation, said firms continued to export furniture to traditional markets such as the US, EU, Japan, and Korea but needed to expand to other markets too, he said.

Many of China’s traditional customers has shifted their orders to Việt Nam, which is a great opportunity, he said.

Khanh said AA Corporation, which provides custom furniture to luxury hotels and resorts world-wide, had got an order from a large hotel in Tel Aviv, Israel, the first order from this market.

Dương Minh Tuệ, sales director of Minh Dương Furniture Corporation, said her company had got many customers from the Middle East recently.

Customers there used to prefer classical designs or those reflecting their Islamic beliefs, and so Malaysian products were very popular there though also for their competitive prices, he said.

“The tastes of consumers there have changed. Younger generations accept higher prices and new designs. They come to Việt Nam to find products with nice designs and made from more expensive materials.

“The Middle East economy enjoys steady growth. Demand, especially among young customers, is very high. It is a market that Vietnamese enterprises should pay attention to.”