HO CHI MINH CITY: While optimistic about a recovery in wood-product exports, industry insiders also caution about the challenges ahead and say businesses should adopt flexible strategies and enhance promotions to retain their traditional customers and attract new ones.

Speaking at a meeting held to introduce the 2024 Vietnam International Furniture and Home Accessories Fair (Vifa Expo) in Ho Chi Minh City on Tuesday, Tran Ngoc Liem, director of the Vietnam Chamber of Commerce and Industry’s (VCCI) Ho Chi Minh City branch, said exports of wood products declined for the first time in 2023 after two decades of impressive growth.

But there have been positive signs since the fourth quarter of last year, and especially in January, he said.

In January, exports topped US$1.49bil, a 72.5% increase year-on-year and accounting for 29% of all agricultural exports, he said.

With inflation easing in the United States, the biggest importer of Vietnam’s wood products, demand is expected to go up, he said.

Executives attending the meeting said they have export orders for until the end of the second quarter.

But buyers now order smaller volumes than before, and require products to come in newer designs or more product samples since they are also striving to find the right products, they said.

Tran Quoc Manh, vice-chairman of the Vietnam Handicraft Exporters Association, said, “Making product samples would result in higher costs compared to mass production, but we have to get used to it.

“Firms need to coordinate with customers to create new designs to conquer target markets.”

The association also expressed concern about the rising logistic costs and shipping times due to the Red Sea tensions, saying it would adversely impact the industry’s exports, especially to the United States and European Union.

Liem said the market still faces potential difficulties due to complicated and prolonged geopolitical conflicts.

“In the current context trade promotion is extremely necessary.”

VCCI HCM City will organise the 15th Vifa Expo along with the Vietnam Association for Construction Materials and the Alliance Handicraft and Wooden Fine Art Corp (Lien Minh Co) from Feb 26 to 29.

The fair is expected to provide opportunities for businesses to showcase their products and connect with more potential partners, he said.

Dien Quang Hiep, general director of Binh Duong-based Minh Phat 2 Indoor Furniture and Sofa Co Ltd, said businesses could no longer depend on traditional customers and need to proactively seek new export markets and also invest in increasing capacity, productivity and competitiveness.

Fairs and exhibitions are effective promotion channels that help wood-industry enterprises meet prospective partners from all over the world and keep abreast of market trends, he added.

Dang Quoc Hung, general director of Lien Minh Co, one of the Vifa Expo fair’s organisers, said the expo would be held at the Sky Expo Vietnam International Exhibition and Convention Centre in Ho Chi Minh City’s District 12, marking the start of a chain of furniture fairs in Asia.

The event has already attracted more than 600 exhibitors who will set up over 2,000 booths, he said.

 - ANN