- The only wooden products Vietnam imports from China are plywood and veneer panels.
- Vietnam has a large wood industry with over 5,000 companies conducting wood processing activities.
Despite the impact of the COVID-19 pandemic wood and wooden product exports posted impressive growth in the first quarter of 2021 due to the efforts of many businesses to apply advanced technology, develop new products and make use of online marketing channels.
The country’s forestry export turnover reached 13.17 billion USD last year, up 16.4 percent year-on-year, and exceeding the yearly target of 5.4 percent. This included almost 3.7 billion USD worth of wood and wooden products and 243 million USD worth of non-wood forestry products, up 41.5 percent and 38.4 percent, respectively, according to the Ministry of Agriculture and Rural Development.
That turned the wood industry into the leading driver of agricultural and forestry exports during the period.
Nguyen Chanh Phuong, Vice Chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), said that by tapping into its production advantages and emerging market opportunities Vietnam has surpassed Poland, Germany, and Italy to become the world”s second-largest wood and wooden product exporter behind China.
He explained that the COVID-19 pandemic forced people in many countries and regions, especially the US, the EU, Japan, and the Republic of Korea, all major importers of Vietnamese wooden items, to work from home leading to greater demand for home furniture.
Wood Industry of Vietnam
Wooden furniture accounted for the most exports. Labor-intensive products previously dominated the market but enterprises have now become involved in product design, accelerated the application of advanced technology in processing, and improved management skills and services.
Vietnam has a large wood industry with over 5,000 companies conducting wood processing activities. Most wood-processing activity is carried out in the vicinity of the capital Ho Chi Minh City (HCMC) and the surrounding southern provinces.
Most wood processing plants are domestically-owned – local Vietnamese entrepreneurs own 4,000 out of 5,000. Only 20% of wood companies are foreign-owned, and the government classifies them as “Foreign Direct Investment”/FDI enterprises. FDIs have invested over $ 6B in the Vietnamese wood sector, and most of them are companies opening direct branches in the country. Last year, 100 new wood processing enterprises were opened by foreign companies, with an investment nearing $800M.
Vietnam is not reliant on China’s materials. In the wood sector, Vietnam is relatively independent. The only wooden products Vietnam imports from China are plywood and veneer panels. Few suppliers also import laminated wood from China. International buyers have increasingly valued the production capacity, design, and technology of Vietnamese wood producers. Moreover, due to supply chain disruptions caused by COVID-19, global distributors now tend to diversify and seek safer supply sources.