VietNamNet Bridge – Wooden furniture manufacturers have been warned that the
challenges they meet in 2013 would be even tougher than the ones in 2012.
Commenting about the export turnover of $4.67 billion in 2012, Deputy Minister
of Agriculture and Rural Development Ha Cong Tuan said this was an “encouraging
result.”
Vietnam’s exports now can go directly to the 100 targeted markets, while they
don’t have to go through intermediary markets like Taiwan, Singapore and South
Korea any more.
Also according to Tuan, Vietnam ranks the sixth in the world, the second in Asia
and the first in South East Asia in exporting timber and the products made of
timber. The most important markets for Vietnam are the US, China, Europe and
Japan.
However, Nguyen Ton Quyen, Deputy Chair of the Vietnam Association of Wood and
Forestry Products, is not as optimistic as Tuan.
“The export growth has been brought mainly by the cheap labor force and the raw
export products which have the lowest values in the added value chain,” Quyen
noted.
Wooden furniture manufacturers have been warned that they would meet bigger
barriers when penetrating the export markets due to the protectionist policies
applied by importers. Especially, the importers would reinforce anti-dumping
measures or require the certificates for wooden furniture products’ origin.
At present, Vietnamese exporters now have to prove that their products use the
materials with FSC certificates, or show the documents to prove their legal
origin. Since Vietnam still does not have a FSC wood market, it has to import $1
billion worth of wood materials every year.
Since the import prices and the transportation costs are on the rise, Vietnamese
wood exporters find it hard to compete with Chinese and Malaysian who can
control their material sources.
Since March 2013, European countries, the biggest clients of Vietnam, have been
applying a new regulation which aims to tighten the control over the imports and
prohibit the import of the wooden products made of illegally sourced timber.
The wood suppliers, including Vietnam, will have to show relevant documents to
prove the origin of the wood. For example, they would have to provide the
descriptions about the wood materials, show the countries where the wood is
exploited, and provide detailed information about the suppliers. Meanwhile, it
seems to be impossible for Vietnamese exporters, who buy wood from different
sources and through a lot of different parties, to show the origin of wood.
Coming back to the home market
Meeting big barriers in export markets, wooden furniture manufacturers have been
trying to seek new markets. However, the results of the searching remain modest,
while it is very costly to exploit a new market. The Middle East or North
Africa, for example, maintain specific cultural characteristics which makes it
difficult to approach for trade exchange.
Vo Dai Hai, Deputy Head of the General Forestry Directorate, has noted that
domestic wooden furniture manufacturers have missed the domestic market which
also has very high demand.
Coming back to the home market is really a good idea, but it is not easy to be
done. Domestic firms have been focusing on making products for export, while
they don’t have much information about the domestic market.
If enterprises focus on the domestic market now, they would have to spend money
to start their business from scratch, i.e. they would have to spend money and
time to learn about the market demand, make designs and establish the
distribution network.
DNSGCT