Latest statistics from the Ministry of Industry and Trade (MoIT) showed that during the first five months of this year, wood and wood-based product exports hit US$2.68 billion, up 2.08% against the corresponding period last year. With the current growth rate, they are expected to increase by 3.5% during the first half of this year.
The MoIT also forecast a positive growth of wood and timber product exports this year.
According to Huynh Van Hanh, Vice Chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), Vietnam has become a wood furniture manufacturers in the world as it has raw materials of legal origin and skilled and low-cost labour force. Exports of the products are expected to surpass US$7 billion this year.
However, to obtain the result, wood processing businesses have to face numerous challenges.
Tran Viet Tien, Director of Lavanto Home Décor Company said the advantage of low-cost labour will be lost to the fierce competition from regional countries like the Philippines, Indonesia and Myanmar. Meanwhile, Vietnam’s wood processing technologies and equipment are outdated comparing to those in European countries and China.
Tien said another challenge for the wood processing sector is that many wood processing factories from non-TPP member countries or countries which do not sign free trade agreements with the EU will be moved to Vietnam to enjoy FTAs benefits.