Vietnam expected to become second largest furniture exporter

In addition, the European Union-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), are to come into effect next year, offering them ample opportunities.

The free trade agreements are expected to improve competitiveness for local interior furniture companies, helping them to penetrate potential markets throughout the world, said Ha Cong Tuan, Deputy Minister of Agriculture and Rural Development, at a seminar on opportunities from EVFTA and CPTPP and the establishment of the world furniture center in Vietnam held by the Handicraft and Wood Industry Association of HCMC (Hawa) in HCMC on December 7.

Tuan said the competitiveness of Vietnam’s furniture companies has increased, as many of them have invested in advanced and automated facilities, alongside improved designs, brands and administration management. Local furniture products can meet the demands of the world market, he said.

Speaking at the seminar, Deputy Minister of Industry and Trade Tran Quoc Khanh said the ongoing trade war between the United States and China has had significant impacts. But if the two agreements, EVFTA and CPTPP, are translated into reality next year, they will also provide a significant impact on Vietnam’s furniture exports.

Then, furniture products labeled “Made in Viet Nam” would enter EU markets, as well as new markets, such as Canada and Mexico, and local furniture companies might receive more orders thanks to having more preferential tax incentives over competitors.

Khanh said if local wood processing companies refuse to purchase illegal timber, while strictly implementing the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (FLEGT), going side by side with consumers in environmental protection and looking forward to sustainable development, the chances to expand the industry will increase.

Pham Phu Ngoc Trai, an economic expert, said there is much demand for wood exports. At present, local wood companies have strong production, but need to invest more in design, noting that most designs have so far been ordered by customers.

Trai cited data on world furniture processing, saying that the total value in the world furniture chain is about US$450 billion, including the value of trade, design, distribution and branding. Further, according to Trai, if local furniture companies take part in brand, design and distribution sectors, the value they receive will be even larger.

Nguyen Quoc Khanh, chairman of Hawa, said that 2019 is the year for local furniture companies to make a breakthrough in the industry. According to Khanh, they are standing before a chance to export, and thus they should expand production with advanced facilities to improve their competitiveness.

At the seminar, many companies requested state agencies to establish a world furniture center in Vietnam to help them better exploit their added values. Tuan, of the Ministry of Agriculture and Rural Development, said it takes time to find a suitable location for the center, adding that the ministry is considering a location in the southern province of Dong Nai for the center’s development.