Narrowing the decline, many wood businesses have orders until the end of the first quarter of 2024

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Specializing in the production of sofas for export to the US market, Ms. Duong Thi Tu Trinh - Deputy Director of Duc Thien Company Limited (Binh Duong) - said that from the beginning of the year to July, the company operated at a standstill, and at times had to cut workers, but now it has re-recruited workers, operating at 50 - 60% capacity. Workers have worked enough days in the month and on average the company exports about 100 containers of goods/month.

“Entering the fourth quarter of 2023, the business's order situation increased again by 20-25% compared to the previous 3 quarters. Currently, the business has enough orders until the end of the first quarter of 2024,” Ms. Trinh informed.

Assessing the signs that the market is brightening again, Mr. Huynh Quang Thanh, Director of Hiep Long Company Limited, said that although it has not returned to the same level as previous years, in the third quarter of 2023, the wood export market has gradually recovered. Therefore, it is forecasted that wood and wood product exports will recover in 2024. Currently, the Company has received a number of orders for the new crop, and customers have asked for quotes and samples.

“The market has bottomed out and according to the rule, when it hits bottom, it will slowly rise. Up to now, we are in contact with a number of customers and the order situation for 2024 is quite feasible. This is good news for the wood industry. By 2024, wood exports will recover,” said Mr. Huynh Quang Thanh.

Thu hẹp đà giảm, nhiều doanh nghiệp gỗ có đơn hàng đến hết quý I/2024

Many wood businesses have orders until the end of the first quarter of 2024.

Mr. Tran Quoc Manh, Vice President of the Vietnam Handicraft Export Association, assessed that the decline in the world market has affected all of Vietnam's export products. However, in the third quarter of 2023, the market has shown positive signs. Export orders for wood and handicraft products have shown signs of recovery. Some businesses have orders reaching over 50% of factory capacity and this trend is gradually increasing. In particular, according to annual practice, the fourth quarter of 2023 and the first quarter of 2024 will be the peak of the wood export industry, so Mr. Manh predicts that export turnover will recover in the near future.

“Hopefully by the end of this year or at the latest early 2024, orders will return to their previous state. This is a bright spot,” said Mr. Manh.

Still facing many challenges

Despite the bright spots, according to Mr. Manh, wood industry enterprises are still facing many challenges as orders are now more competitive and the requirements for design and quality are much higher. For example, customers require recycled wood and accessories, but the quality must be higher. This is a pressure for enterprises.

However, Mr. Manh believes that these difficulties are also opportunities for businesses to renew themselves, from making traditional orders, to shifting to environmentally friendly products, with diverse designs... to be able to compete and dominate the market, so that Vietnam can return to its glorious period of exporting wooden furniture and handicrafts.

Along with production restructuring, regular participation in fairs and exhibitions helps businesses connect with many customers.

Following market trends, it requires businesses that produce and export wooden furniture and handicrafts to improve their capacity by industrialization, many stages are done by machines, and higher productivity. Specifically, if in the past, customers only required a certificate for one stage such as from raw materials to production, now they require all stages in the entire supply chain, from determining the origin of raw materials to production in the factory, to output, consumption system and to customers. Therefore, businesses must ensure cost reduction from the input stage, but still ensure environmental factors.

According to Mr. Manh, many enterprises and craft villages have grasped and converted to environmentally friendly products, however, to meet the world's requirements, enterprises must continue to make more efforts. In particular, it is necessary to focus on technological innovation, perfecting the production management system, improving the efficiency and quality of human resources. At the same time, promoting the use of domestic raw materials to reduce costs and improve product competitiveness.

“In the coming time, focusing on the criteria of good prices, suitable for tastes, quality products and good after-sales policies… is one of the leading solutions to increase orders,” Mr. Manh commented.

According to statistics from the General Department of Customs, the export turnover of wood and wood products in October reached 1.2 billion USD. In the first 10 months of 2023, the export value of wood and wood products of Vietnam is estimated at 10.8 billion USD, down 19.9% compared to the same period in 2022.

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