Wood sector confronts hard situation
HCM CITY (VNS) - Although Viet Nam ranks second worldwide in wood exports, local consumers say they lack access to Vietnamese-made furniture that is both stylish and reasonably priced, Tin tuc (News) newspaper reported late last week. A customer from "Foreign wood products are diversified, have eye-catching designs, and are updated to follow global trends, but local products are uncompetitively priced, and the styles are all the same," the woman said. Larger enterprises, which have better technology and more capital, focus on exports and the requirements of international buyers such as US and Phan Chi Dung, head of the Ministry of Industry and Trade's Light Industrial Department, said multinationals and foreign-invested enterprises had grabbed 80 per cent of market share of wood and furniture products. Many of the local companies are not competitive because of the lack of capital and small-scale production. Moreover, it is difficult for them to quickly adapt to changing consumer tastes. In addition, the production of raw materials is heavily dependent on foreign imports, leading to higher selling prices. And promotional activities and designs are still limited. Nguyen Huu Toan, director of Toan Thien An Interior Ltd Co, said businesses should have professional design teams and distribution channels, and recognisable trademarks. "Exploiting the domestic market has many advantages, such as stable demand and stable production plans. Companies can adjust samples and designs according to market demand," he added. At the seminar "Viet Nam Economy 2014 and business prospects in the furniture sector" held recently in According to Nguyen Quoc Khanh, chairman of the HCM City Handicraft and Wood Industry Association, a Vietnamese household spends about VND6 million (US$285.7) for furniture products per year. With a growing economic recovery, domestic consumption this year is expected to reach more than $2 billion and will increase in coming years. According to economists, the State needs to issue support policies for local businesses soon, such as preferential tax policies to encourage investment and preferential credit policies. It also should create wood-processing industrial clusters, they said. Creating linkages between local and foreign businesses would help them learn from more experienced manufacturers. - VNS |
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