Ngô Sỹ Hoài, vice president and secretary general of the Vietnam Timber and Forest Products Association (Viforest). — VNS Photo Ly Ly Cao

HÀ NỘI — The wood and forest products industry has emerged as one of the country's most dynamic export sectors, but it is now facing mounting global uncertainties and structural challenges. In a talk with Việt Nam News and Law reporter Ly Ly Cao, Ngô Sỹ Hoài, vice president and secretary general of the Vietnam Timber and Forest Products Association (Viforest), shares insights on market opportunities, trade barriers, digital transformation and the industry's transition towards sustainable growth.

Could you briefly outline the key advantages and challenges facing Việt Nam's timber and forest products in both domestic and international markets?

Việt Nam's wood and forest products industry has recorded strong growth in recent years. Vietnamese products are now exported to 168 countries and territories, with total export turnover exceeding US$18 billion last year. The country has positioned itself as a major global hub for processing and exporting wood and bamboo products.

However, with this scale comes greater scrutiny. Key export markets, particularly the US, are tightening trade measures. Currently, certain Vietnamese wood products are subject to a 25 per cent tariff under Section 232 of the US Trade Expansion Act of 1962, with the risk of further increases if bilateral agreements are not reached.

Furthermore, the ongoing conflict in the Middle East has negatively affected all industries, including the wood and forest industry. These effects can be both direct and indirect, influencing cost structures, delivery timelines and overall market demand.

Such uncertainties are already affecting growth prospects for the sector this year. Currently, many businesses prioritise survival over expansion. The focus is no longer on ambitious growth targets but on maintaining operations amid volatility.

Small and medium-sized enterprises (SMEs) and over 300 craft villages have traditionally served the domestic market. Export-oriented firms have largely focused on global supply chains, but current global headwinds are prompting a strategic shift. 

Many companies are now pursuing a dual-track approach, maintaining exports while tapping into the growing domestic market of over 100 million people, where demand for furniture and wood products remains robust.

What steps are Vietnamese wood enterprises taking to strengthen their position in both domestic and international markets?

The industry has reached a point where it must transition from a growth model based on cost advantages, such as low labour and raw material costs, to one driven by innovation, digitalisation and sustainability.

Environmental compliance is becoming a decisive factor. Customers, especially in high-end markets like the US, EU and Japan, are increasingly concerned about whether products contribute to deforestation or forest degradation. 

Beyond price and quality, buyers now demand proof of legal sourcing and adherence to environmental standards.

Vietnamese enterprises are therefore sending a strong message: the industry is committed to sustainable development and green growth, contributing to global emissions reduction efforts. 

If companies can consistently meet stringent international standards, such as the EU's regulations on deforestation-free supply chains, they will not only retain existing markets but potentially expand their market share.

Domestically, the industry must also invest more. Vietnamese consumers are becoming more discerning, particularly in premium segments such as high-end apartments and modern housing. 

Furniture is no longer just functional. It also reflects lifestyle and design preferences. Given their capabilities in serving demanding export markets, local firms are well-positioned to meet domestic demand.

How do you assess the role of e-commerce in the wood industry today?

E-commerce, particularly cross-border platforms, offers significant advantages for the wood sector. Given the bulky nature of furniture products, traditional retail requires large display spaces. Digital platforms can overcome this limitation by enabling detailed product presentation through advanced technologies.

Vietnamese wood products are already among the top categories leveraging platforms such as Alibaba. In the coming years, digital transformation will accelerate, making online channels increasingly important for reaching both domestic and international customers.

For SMEs and craft villages, digital platforms are essential. Many have successfully used social media channels like YouTube and Facebook, including livestreaming, to sell products directly to consumers.

This approach is particularly effective for smaller-scale items such as handicrafts or furniture sets. It allows businesses to reach customers efficiently while reducing distribution costs. The concept of small players serving niche markets is proving highly relevant in this context.

Wood products differ from other categories, such as food or health supplements. With the application of technologies like 3D and 4D visualisations, customers can inspect products in detail before purchasing. 

Some industry players have already developed virtual showrooms, enhancing transparency and reducing risks associated with online transactions.

How would you assess the adoption of technology and digital transformation within the industry?

Technology adoption is becoming indispensable across multiple areas.

In corporate governance, businesses must implement modern management and accounting systems to ensure transparency. For instance, EU markets require electronic traceability systems that can verify the origin of timber and confirm compliance with anti-deforestation regulations.

In addition, automation is increasingly necessary. Rising labour costs and workforce shortages mean that companies must invest in machinery to maintain competitiveness.

There is also a pressing need to strengthen design capabilities and brand development. Vietnamese firms have long relied on contract manufacturing for foreign buyers, capturing only a small share of value. Moving forward, they must take greater control of the value chain, including logistics and distribution.

Finally, digital platforms will play a critical role in marketing and sales. Traditional methods are no longer sufficient. Businesses must leverage large-scale online ecosystems to remain competitive. — BIZHUB/VNS