Industry association sanguine about furniture, wood exports

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A wood products fair held by the Handicraft and Wood Industry Association A wood products fair held by the Handicraft and Wood Industry Association

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Last year Vietnam’s furniture and wood industry posted record-high exports of US$5.7 billion and the outlook is even brighter for this year, a senior official from the industry association said.

Nguyen Ton Quyen, general secretary of the Vietnam Timber and Forest Products Association, told news website Saigon Times last week that the industry performed very well last year amid a slowdown in the agriculture sector.

He said that demand in the US, the major export market for Vietnam’s wood products, had recovered after years of decline and translated into a shipment of $1.7 billion in 2013. This represented a 16-percent rise from the previous year.

Exports to the EU did not grow much last year compared to 2012 while those to Japan saw an increase of $200 million year-on-year.

Wood exporters have also expanded to new markets like India, Russia, and the Middle East.

Despite large increases in exports, the products – which have little value added -- brought in small profits due to high input costs, Quyen said.

He is also concerned about exports to China, which have seen robust growth in recent years since the market mainly imports timber and unsophisticated wood products from Vietnam.

This brings wood growers and processors little to no profits and raises concerns about illegal logging, he said.

VPAs, TPP

The industry association is sanguine about exports this year and it has targeted $6.2 billion in shipments this year.

The targeted number is “completely feasible,” Quyen said, adding that local businesses have inked export contracts with foreign partners for over $3-billion in shipments so far.

He expected Vietnam to sign the Voluntary Partnership Agreements, one of the key elements of an EU program to tackle illegal logging, this year, which would enable the country to sell wood products to the EU at higher prices.

Exporters, who have entered only four of 28 EU countries, would have a more stable market where they gain access directly to consumers, he said.

But Vietnamese legislators should develop policies on this issue since many woodwork businesses in the industry still have low awareness on these partnership agreements, he warned.

He also suggested local firms prepare to catch up with new requirements brought by the Trans-Pacific Partnership deal, which is set to be finalized this year. Vietnam is among the 12 negotiators including Australia, Canada, and the US.

There would be fierce competitions among wood exporters joining the trade deal, he added.

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