Vietnam’s exports account for just 6% of the global timber and wooden furniture market, which is estimated at US$120 billion, said Pham Hong Luong, head of the Planning and Finance Department, operating under the Ministry of Agriculture and Rural Development’s Vietnam Administration of Forestry.
Vietnam holds huge potential for wood processing and production, according to Luong.
The nation has nearly 4,000 timber processing firms, including 1,500 companies specialising in producing wooden products for export. They can boost the sector’s growth if there are abundant materials, sound mechanisms and robust market signs.
Meanwhile, they do not have to face fierce competition, as other foreign exporters are facing anti-dumping petitions.
Moreover, the freshly-issued forestry law, together with the EU-Vietnam Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (VPA-FLEGT), will set up legal corridors and mechanisms to encourage market expansion of the forestry sector.
With these favourable conditions, Vietnam’s exports of forestry products are expected to bring home some US$9 billion this year.
Vietnam is a leading wood exporter in ASEAN. It ranks second in Asia and fifth in the world, after China, Germany, Italy and Poland, in terms of the export revenue from forestry products.
Last year, forestry exports hit a record growth of 10% in the recent five years to reach more than US$8 billion, which surpassed the target of US$7.8 billion set for 2020.
The largest markets for Vietnamese timber products are the United States, Japan, the Republic of Korea, China and the European Union.
Vietnam’s wood consumption in the domestic market is calculated at some US$30 per person per year, which is much lower than the world’s figure of US$72. The domestic demand for wood is expected to increase, spurred by rapid urbanisation and the bounce-back of the real estate market.