Expansion of wood industry markets continues to support ongoing growth trajectory
In the first seven months of the year, the wood and wood products industry in Vietnam has solidified its position as one of the country's top five largest export industries, with an export value nearing $10 billion. This global trend is driven by strict requirements from major markets such as the EU, US, Japan, and the Middle East.
The US alone accounts for more than 50% of Vietnam's total wood export value, underscoring the significance of this market. However, experts advise the industry to pursue market diversification, focusing on regions like the Middle East, South Asia, South America, and Eastern Europe.
Saudi Arabia and the UAE, with their massive urban projects, present multi-billion-dollar demand for furniture annually. Opportunities in these regions are vast, given their rapid urbanization and rising demand for housing and interior furnishings.
Đõ̂ Xuân Lập, chairman of the Timber and Forest Products Association (VIFORES), emphasises the importance of proactively developing legal and transparent raw material zones. This is crucial not only for ensuring sustainability but also for meeting the growing demand for green and sustainable products in import markets.
Trãn Quōc Mạnh, vice chairman of the Handicraft Exporters Association, stresses the need for Vietnam's furniture industry to aim for Net Zero with eco-friendly products. The furniture industry should move beyond low-cost segments and focus on smart furniture, custom designs, and eco-friendly products to stay competitive.
The digital transformation of wood enterprises is another key factor for improving competitiveness and reducing production costs. This includes accelerating digital transformation and restructuring operations to meet the demands of the 21st century.
The EU, the US, and other major markets are increasingly demanding traceability, sustainable forest certifications, and carbon footprint calculations. To comply with these requirements, wood enterprises should enhance their compliance with international trade regulations and consider strategies such as local assembly or value addition.
Building trade relationships via platforms like LinkedIn and leveraging government-supported export promotion programs can also improve competitiveness. Opportunities from next-generation FTAs such as the EVFTA, CPTPP, and UKVFTA grant Vietnamese wood products preferential tariffs in markets like the EU, Canada, the UK, and CPTPP countries.
However, the heavy dependence on a few key markets exposes businesses to significant risks, especially when these countries tighten trade policies or impose new technical barriers. Diversifying markets is essential to mitigate these risks and secure the industry's long-term competitive advantages.
Potential new markets for the Vietnamese wood and furniture industry include African countries such as Kenya, which present growing business opportunities supported by trade promotion initiatives like the Africa Business Guide and Germany Trade & Invest (GTAI).
The wood industry is considered a pillar of agricultural exports in Vietnam and leads the agriculture-forestry-fishery group in export value. These factors offer long-term competitive advantages for wood enterprises, provided they adapt to the changing global market dynamics and seize the opportunities presented by new and emerging markets.
