The more difficult it is, the more you have to find ways to adapt.

Hope from positive signals at the beginning of the year

By the end of January 2024, the country's wood exports reached 1.5 billion USD - according to statistics from the Ministry of Industry and Trade, an increase of 72.5% over the same period last year. For wood exporting enterprises, this is a positive signal - showing that the market is recovering.

Sharing with Industry and Trade Newspaper, Mr. Tran Quoc Manh, Vice President of the Handicraft Association, Chairman of the Board of Directors of Saigon Production and Trade Development Joint Stock Company (SADACO) - assessed: This is a positive result in extremely difficult conditions due to war and tensions in the Red Sea causing disruptions in the supply chain of goods. " In difficult conditions, the increase in turnover of wooden products is very encouraging and we hope that this year the export of wood will be better " - Mr. Manh said.

Wood businesses are looking to adapt to market difficulties.

Pointing out the reason, Mr. Manh said that recently the signs of inflation in the US - the largest import market of Vietnamese wood - have become less severe. In addition, the inventory in this country that was accumulated before the pandemic has now been almost sold out and they will turn around to order again in 2024, especially in the third quarter of this year. These signals create hope and strengthen the belief of businesses that orders will return.

Sharing the same view, Mr. Dien Quang Hiep, General Director of Minh Phat 2 Company Limited - also said that compared to last year, the company's orders for the first quarter of 2024 are "temporarily stable". According to Mr. Hiep, although the general market is difficult, Vietnam has a very good foreign advantage, so partners still choose us to buy goods.

As for Duc Thien Company Limited, Mr. Le Ha Trong Chau, Sales Manager of this company, informed that the company currently has orders until June 2024. With current developments, the company expects to achieve an export growth rate of about 20% in 2024.

The more difficult it is, the more you have to find ways to adapt.

In addition to the positive signals, according to Mr. Dien Quang Hiep, this year wood exports still have to face the continuing problems of 2023 such as political conflicts, wars, tensions in the Red Sea, etc. More worryingly, the disruption of transportation related to the Red Sea region is increasing the cost of shipping goods to Europe. "The output of wood products is already difficult, but now it is even more difficult and it is important for businesses to be cautious and calm to come up with effective business strategies," said Mr. Hiep.

In fact, Mr. Hiep's concern is also the issue that wood businesses are concerned about today. Specifically, according to Mr. Tran Quoc Manh, not only have shipping costs to Europe increased, but even the US market has increased by over 200% compared to before (from 1,000 USD/container to 4,000 USD/40ft container) - while both of these markets are key markets for the Vietnamese wood industry. Another challenge is that delivery times are longer than before and return containers are scarce. All of these are putting a lot of pressure on businesses.

However, for wood enterprises, 2024 is the third year of the difficult period. At this time, enterprises cannot say "face difficulties" but must "adapt" to difficulties. Therefore, according to wood exporting enterprises, their current problem is how the factory continues to exist and develop.

Mr. Dien Quang Hiep said that this enterprise has been perfecting its apparatus and finding every way to reduce production costs. Accordingly, despite difficulties, it is still necessary to set aside a certain budget to invest in machinery to reduce labor costs, while at the same time communicating with workers to create consensus and determination to reduce production costs with the enterprise.

Meanwhile, with SADACO Company, Mr. Tran Quoc Manh said that this business does not focus on long-term orders like before, but instead makes short-term orders, making samples according to customer requirements. "Current orders are very different from before, no longer exporting dozens or hundreds of containers in bulk, but instead the business focuses on samples to suit market needs" - Mr. Manh shared.

Focus on opening new markets and increasing trade promotion

In the plan set for 2024, the wood industry sets an export turnover target of 17.5 billion USD, which is quite high, especially in the context of escalating and unpredictable political conflicts, both output and input factors of exports are difficult. In that context, businesses all share the view that one of the urgent things to focus on is expanding new markets, increasing the diversification of traditional and non-traditional sales channels. Therefore, trade promotion for the wood industry through participation in domestic and international fairs and exhibitions is very necessary. "Participating in fairs is a niche to find customers, so even though costs may increase, businesses still participate," Mr. Hiep affirmed.

Like Minh Phat 2, Mr. Tran Quoc Manh advised that the wood export market trend has changed a lot. Therefore, participating in trade promotion will help businesses update new trends, grasp customer tastes to have appropriate business strategies. "Participating in fairs is the best way to promote the brand for businesses, especially in the current market situation. Through fairs, we have found customers and signed contracts afterwards" - Mr. Manh added.

Source: https://congthuong.vn/xuat-khau-go-cang-kho-cang-phai-tim-cach-thich-nghi-304614.html