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Furniture makers ‘neglecting' local market

Update: August, 24/2010 - 09:18

HCM CITY — Vietnamese wood furniture firms are focused mostly on export markets, leaving the local market to imports, especially from China.

Wood product firms attend workshop on US export market

HA NOI — Timber producers should join hands in fighting illegal logging to boost supplies and therefore profits, said Francis Donovan, mission director of the US Agency for International Development at a workshop here yesterday.

The workshop, entitled Exporting in a Shifting Legal Landscape, discussed the needs of US importers and the amended Lacey Act, which prohibits the import, sale or trade of illegally harvested wood and wood products into the US.

Ha Cong Tuan, deputy director of the Viet Nam Directorate of Forestry, said Viet Nam considered the US a major market for wooden furniture.

"Supplementary articles to the Lacey Act provide challenges and also opportunities to better improve the management of forests, timber imports and processing, with the aim of sustaining and expanding Viet Nam's market share of the timber industry in the US," Tuan said.

George White, head of the WWF's Global Forest&Trade Network, said Asian companies that exported timber products to the US needed to fully understand their role in ensuring compliance with the revised regulations.

"If you are exporting to the US market, you need to understand how the Lacey Act impacts your customers in the US, who will face large fines, confiscation and imprisonment if they cannot demonstrate the wood used in making the products they import is legal," White said.

According to the Viet Nam Timber and Forest Product Association, Viet Nam's wood exporters have signed contracts totalling roughly US$3 billion until the end of the year, $400 million higher than last year. — VNS

Huynh Van Hanh, deputy chairman of the Handicraft and Wood Industry Association of HCM City (HAWA), said with its population of 86 million and increasing incomes, Viet Nam was a promising market for furniture and other wooden products.

Demand for wooden indoor furniture had grown at an annual rate of 15-20 per cent in recent years, he said.

But Vietnamese firms, among the world's largest exporters of wood products, continued to ignore the local market, which, at US$3 billion, is equal to the export market, Hanh said.

They accounted for just 20 per cent of the Vietnamese market, with imports from mainland China, Malaysia, Taiwan, Hong Kong and Thailand accounting for the rest.

Dien Quang Hiep, director of Binh Duong-based Minh Phat Furniture Company, said companies preferred exports to domestic sales because orders were usually big. The domestic market not only placed small orders but also required various designs.

And then there was the cost of setting up distribution systems, he pointed out.

Furniture shops on Ngo Gia Tu and To Hien Thanh Streets in District 10, Nguyen Thi Minh Khai in District 3, and other places in HCM City, display a lot of imported furniture products.

Tran Hoang Trung, owner of a shop on Ngo Gia Tu Street, said most of his products were from China and they came in a range of designs and materials.

As for local products, he sold the odd table made of natural wood, he said.

Many foreign companies, mostly Chinese, import large quantities of timber from Viet Nam at cheap prices and export finished products at high prices to Viet Nam.

Many distributors import 30-40 containers of furniture every month from China, according to insiders.

Nguyen Ton Quyen, general secretary of the Viet Nam Timber and Forest Product Association, said the low import tariffs on wooden products, of 0-3 per cent, encouraged furniture distributors to import them, creating pressure on domestic producers. — VNS

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