Study the market

Binh Duong's wood product manufacturing and processing industry is accounting for the largest export turnover of the country's wood industry. The whole province currently has 1,600 enterprises operating in the wood industry (accounting for 40% of the country's timber enterprises). From the beginning of the year until now, the Covid-19 epidemic has significantly affected the production and export of timber, but businesses still have made great efforts to maintain growth. The export turnover of wood products of the province in the first 6 months of the year was estimated at over 1.7 billion USD, up 0.6% over the same period, accounting for 14.5% of the total export turnover, the highest proportion in total export turnover of the province.

Currently, the wood industry in the province is promoting the restructuring of production, the management system to welcome opportunities from the market. In the short term, with the Vietnam - European Union Free Trade Agreement (EVFTA), businesses expect the EU to be a reliable "bright door" for the wood industry. However, businesses in the province need to prepare a lot of conditions to establish business relationships with the EU. Want to do long-term business with European partners must regularly change product models to suit their tastes. To meet the standards in this market, in addition to the factors of price and design, enterprises must have production capacity. Currently, Europe is setting high standards for the products they use. Customers must know the origin of products, materials made by labor standards.

Mr. Phan The Hai, Director of Trieu Phu Loc Company (Tan Uyen Town), said that Europe is a potential market, with economic stability, bringing high value to the product lines, but there are the standard is very strict. To prepare for this market, in early 2020, Trieu Phu Loc Company built a factory with 60% of goods exported to Europe. The company's goal by 2021 will meet 80% of capacity to serve the EU market.

According to Mr. Phan Thanh Vung, Director of Viet Au Company (Nam Tan Uyen Industrial Park), the good signal is that when the epidemic eases stress, some traditional customers have come back with some new customers from Europe. Currently, businesses have proactively sourced raw materials and workers to take advantage of cooperation opportunities when EVFTA takes effect. However, the compliance with strict commitments from EVFTA is a huge "burden" on trade, technical barriers, rules of origin, environment, and labor.

Capture new trends

According to information from Binh Duong Wood Processing Association (BIFA), one thing worth noting about the current market is that although the export output of furniture has decreased sharply, the demand of items such as plywood and plywood uptrend. Affect the US-China trade war, leading to manufacturers looking for new supplies in the Vietnamese market.

Mr. Nguyen Phuc, Vice President of BIFA, said that at present, the demand for acacia wood is huge because it can serve 4 fields: Furniture, plywood, MDF and pellet making. In addition, acacia is also a very suitable crop for Vietnamese soil. Therefore, enterprises have a great demand for wood and plantation supplies, especially acacia and rubber. "If we want to make the wood processing industry a key industry, it is necessary to have the attention of State agencies and scientists to research and produce the most effective crop varieties with specific orientation for planting and exploiting forests to serve the wood processing industry."

Mr. Dien Quang Hiep, Chairman of BIFA said that, with the trend of e-commerce, the business community of Binh Duong wood industry is being delayed 1-2 years later than other countries. Reducing the number of direct stores, increasing the number of online stores, participating in e-commerce networks will be an inevitable trend for businesses. Currently this form accounts for more than 50% of the orders of wood enterprises in the province.