12 Strengths of Vietnam’s timber and furniture industry

Green Sun Flower furniture
Six years subsequent to joining the World Trade Organization (WTO), Vietnam’s timber processing and furniture exporting industry has developed admirably,registering average growth during 2007-2012 of 16% a year.

Vietnam’s furniture exports come from 2,500 domestic and 400 foreign enterprises. This sector employs 300,000 people, and is now one of the key major export sectors of Vietnam. The industry has contributed considerably to the improvement of living standards for people in many rural areas of Vietnam. Not yet fully recognized, let alone fully exploited, the development of the wooden furniture industry also brings about opportunities for the development of other supporting industries in the country such as hardware, accessories, finishing materials, adhesives, veneers, machinery, and service industries in consultancy, software, marketing, shipping, and financing etc.

Despite the major economies of the world beingchallenged because of the global economic crisis, furniture exports ofVietnamstill grew in 2012, reaching US$5 million, up 18% compared to 2011. As a result, Vietnamnow ranks as the world’s sixth largest exporter and number two in Southeast Asia. Vietnam’s furniture products have been bought by buyers of more than 120 countries, with the US, China, EU and Japan importing the most. TheUS is responsible for 39% of the revenue,China 15%, EU 14%, Japan 14%, and the special emerging market ofSouth Korea 5%.

Strengths of Vietnam’s timber and furniture industry

  1. Plentiful labor readily adaptable and lower cost than that of neighbor countries;

  2. Excellent handicraft skills and a wide range of handicraft materials giving it a basis of product decorativeness and differentiation;

  3. An attractive environment for Foreign Direct Investment (FDI) by furniture companies because of plentiful low cost labor and relatively stable environment both socially and fiscally;

  4. The government of Vietnam facilitates incentives for sustainable development of the furniture industry;

  5. The Vietnamese worker is flexible and has a striving work ethic that makes the development of a business an exciting and rewarding activity for those entrepreneurs able to invest in enterprise;

  6. Vietnam has a growing name as a good destination for investment in furniture production, capable of competing with China with much less exposure to risk;

  7. Recent joining the WTO gives Vietnam an adequately predictable regulatory environment;

  8. Partly because of its recent history, Vietnam is the focus of much international development aid and is developing the capacity to effectively absorb the aid;

  9. There is a working export-oriented infrastructure in Vietnam successfully minimizing red tape on both necessary import inputs and exported products;

  10. With furniture manufacture still a sunrise industry in Southeast Asia, ample space exists in the market place for quality producers supplying well-designed furniture to controlled quality and on time;

  11. Vietnam has a long history of stability from the 10th Century through to the latter half of the 19th Century during which arts and crafts flourished leaving behind a legacy that can now be drawn upon for design and decoration. This was further tempered by the French period which enhanced the already developed arts; and

  12. Being a relative newcomer to the market, there is still time for Vietnam to develop a presence in the market through design, quality and business culture.
Source: http://www.vietrade.gov.vn
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