Wooden furniture industry a global contender, but still faces problems
Nguyen Phuong Dong, deputy director of the HCMC Industry and Trade Department, commented that fine arts and wooden furniture manufacturing maintained the high growth rate of 15 percent in the last few years. It is expected to grow in 2016 and have export turnover exceeding $7 billion in 2016.
Meanwhile, Nguyen Quoc Khanh, president and general director of AA Interior Design Furniture Corporation, believes that with Vietnam’s current capability, the export turnover of $20 billion by 2025, or a three-fold increase, is within reach.
In 2015, Vietnam exported $6.9 billion worth of wooden furniture products, an increase of 10.7 percent over 2014, turning Vietnam into the fourth biggest wooden furniture exporter in the world after China, Germany and Italia.
Experts said that Vietnam has emerged in the world as a large wooden furniture exporter which makes products with legal materials. High-quality products and low labor cost are the strong advantages with which Vietnam can compete well with other countries.
It is estimated that there are 4,000 wooden furniture manufacturers in Vietnam, while the number of enterprises rises, both Vietnamese owned and foreign invested ones. This shows the great appeal of the industry.
According to Phu Huu Minh, deputy director of the Binh Duong provincial Planning and Investment Department, about 90 percent of foreign invested enterprises in the province register to make wooden products or operate in wooden furniture related supporting industries.
He noted the relocation of many wooden furniture factories from non-TPP countries, or the countries which don’t have FTAs with the EU, to Vietnam to be able to enjoy preferences from FTAs.
As the labor costs in China rise, foreign importers now tend to shift orders to Vietnam.
This explains why foreign invested enterprises account for a large proportion in Vietnam’s wooden furniture exports. Tran Anh Vu, director of Lien Thanh Furniture, estimates that the proportion is 50 percent.
An analyst said he can see some problems in the structure of revenue from wooden exports. The revenue from woodchips, the sector which brings the lowest added value, is about $1 billion, which shows that the inner strength of Vietnamese processing companies is not high.
The analyst also pointed out other problems, including the lack of materials and supporting industry. Vietnam has to import many components and accessories from China.
