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Wooden furniture export: enterprises can sigh with relief   2010-06-09 - Thoi bao Kinh te Saigon

The recovery of the US real estate market has led to the development of the construction sector. This is a golden opportunity for Vietnam to increase wooden furniture exports this year.

According to the Vietnam Wood and Forest Products Association (Viforest), in the first five months of 2010, wooden furniture export revenue has reached $1.4 billion, an increase of 35 percent over the same period of 2009. The increase has been explained by higher demand from key export markets, especially the US.


Exports up


According to Ngo Thi Hong Thu, Deputy General Director of Truong Thanh Furniture Corporation, export markets have recovered rapidly, and the golden age of wooden furniture export, once seen in 2000-2007, has returned.


In the first five months of 2010, Truong Thanh’s export revenue has risen by 50 percent over the same period of 2009. The number of US importers who have placed orders is so big that Truong Thanh only accepts those with attractive prices.


“After two years of experiencing difficulties, we now can sigh with relief because the export markets are very good,” Thu commented. “We can sell products very well, even if we do not attend the trade fairs.”


Nguyen Quoc Khanh, General Director of AA Company, agreed that exports to the US in the first five months of 2010 increased by 10-15 percent over the same period of last year.


According to Nguyen Ton Quyen, Deputy Chair of Viforest, prices of wooden furniture to the US, after two years of decreases, have surged by three percent over the last five months. Therefore, Quyen remarked, it is highly possible that Vietnam may reap $3 billion worth of wooden furniture exports in 2010, an increase of $320 million in comparison with 2009.


According to Thu, consumer tastes have clearly changed after the crisis. Previously, American, European and Japanese consumers liked high-grade products made of natural wood. Now they like low-cost products with average quality. The products can be made of artificial wood rather than valuable and rare woods like before.


Tran Quoc Manh from HCM City Handicraft and Wood Industry Association (HAWA) explained that economic difficulties do not allow consumers to use high-grade outdoor products, so the best sellers now are low-cost indoor products.


Thu noted that the yuan’s appreciation will make China-made products less competitive in the world market. Vietnam-made products are cheaper by 5-15 percent in comparison.


Challenges exist


Economists have pointed out that, despite the export market warm-up, challenges still exist.


In 2009, wooden furniture export revenue of all the 10 ASEAN countries was $11 billion only, or just equal to half that obtained by China ($22 billion). Meanwhile, in terms of competitive edge, Vietnam is ranked after Malaysia, Myanmar, and Indonesia, due to short capital. Vietnam must also import 70 percent of materials needed.


Dien Quang Hiep, Director of Minh Phat 2 Company, added that the wooden furniture export markets have recovered rapidly, and that Vietnamese enterprises now need timber materials in big quantities to fulfill orders from now to the end of 2010. The companies must compete with China to acquire timber materials.


According to the Vietnam Industry and Trade Information Centre under the Ministry of Industry and Trade, in the first four months of 2010, export of timber materials increased sharply by 328.3 percent in comparison with the same period of 2009. The main export market was China.


The HCM City, Binh Duong and Dong Nai associations have asked the ministries to raise export tariffs on timber materials to rescue domestic production.

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