Timber export industry is not impacted in terms of raw materials by Covid-19; therefore, timber businesses in Binh Duong actively boosted trade promotion activities to expand their market and achieve the goal of 2020.
Wooden furniture production for export at Tien Phuc Company (Tan Uyen Town).
To have confidence in the market
The wood industry is not significantly affected in terms of raw materials by Covid-19 epidemic. Some sofa manufacturing enterprises can be affected by fabric sources imported from Chinese market, but in general the negative impact on the whole industry is not significant. According to Binh Duong Furniture Association (BIFA), at present, wood enterprises are not much affected by the Covid-19. Over the first 2 months, export turnover was estimated at $548.5 million, up 16.4% over the same period, accounting for 11.8% total export turnover of the province.
Entering the year 2020, although the world economy is suffering many negative impacts of Covid-19, timber is the beneficiary industry. Timber enterprises are confident that the export turnover would reach a growth rate of 20% in 2020. The reason given by many timber enterprises was that, in 2019, despite the US-China trade war, the wood industry still grew by 22%, with a turnover of about $11.2 billion. Based on this perspective, BIFA Chairman Dien Quang Hiep said that many factories in China have stopped working to limit the spread of disease. As a result, woodwork orders are flocking to other countries, including Vietnam. "Although there are no detailed statistics, we predict, this year's growth rate of wood industry would be about 20%," said Mr. Hiep.
Many argued that wood industry is less affected by Covid-19 because it does not depend on raw materials from China. According to Do Thi Kim Loan, Director of Sao Nam Production and Trading Company (Tan Uyen Town), wood materials are currently mainly produced domestically, and other sources of wood are imported from countries such as USA, Canada, Europe. There are 140 countries, territories are importing Vietnamese wood products, in which the main markets are also the largest markets in the world such as the US, China, Japan, with a turnover of over 1 billion USD/year/market, accounting for 86.5% of the total export turnover. The remaining markets are increasing imports by year, such as Japan, Korea, Canada, Germany, the Netherlands... In addition, Vietnam's timber industry also makes use of opportunities to export tropical timber compared to countries such as Indonesia and Malaysia, due to trade tension between China and America.
In addition, Vietnam signed many new free trade agreements (FTAs). Partner markets from FTAs, such as Japan and Canada, are the member markets of CPTPP. In addition to the increasing turnover of timber exports to these two markets since 2019, Vietnam has also taken advantage of commitments of CPTPP to heighten the competitiveness of timber and wood products in Vietnam compared with other supplies outside CPTPP, helping the proportion of timber and wood products of Vietnam expand in these markets. Europe is also one of the main export markets of Vietnam timber industry, when the EVFTA takes effect, Vietnam's timber products will be better consumed, due to the reduction of tariff barrier, higher competitiveness compared to products from other countries without FTA to the EU.
To proactively seize opportunities
It can be said that the timber export is owning favorable opportunities. Vietnam timber's role are increasingly important in the world supply chain. Bui Thi Thanh An, Deputy Director of Trade Promotion Department (Ministry of Industry and Trade) said, a good signal to wood export in Vietnam was when the opportunity to become a key part of the world's supply chain of furniture is expanding. Lately, the organizers of Las Vegas Furniture Fair (USA) sent an open letter to Vietnamese timber suppliers who will participate in this event in July 2020, and will join hands with Trade Promotion Department and Furniture Today Magazine to introduce Vietnamese furniture. According to an enterprise support project, Trade Promotion Department sent registration information to timber associations in provinces and cities, and received good responses from many enterprises. Tran Anh Vu, Director of Lien Thanh Company (Ben Cat Town) considered this as a good opportunity to meet major distributors around the globe.
Binh Duong wood exporters have strived to enhance e-commerce, solve difficulties in trading activities in stagnation due to the Covid-19. Recently, BIFA signed a partnership agreement with domestic and foreign technology enterprises for digitalization and to stimulate sales through online channels. In particular, BIFA concluded a partnership agreement with FPT to accelerate the digitalization of timber enterprises to help optimize operations, save costs, improve competitiveness of enterprises. FPT also build a database for wood industry, contributing to the management of governance activities as well as consulting and introducing the latest technologies and achievements in field of information technology.
Reported by Tieu My - Translated by Ngoc Huynh
