BIFA endeavors to expand its market

As one of the major export commodities of Binh Duong province, wood and wood products in the province have obtained a steady growth. Currently, in addition to improving quality, members of Binh Duong Furtniture’s Association (BIFA) are actively involving in trade fairs in order to seek more orders.

Experts recommended BIFA to consider returning to the Russian market. Photo: A production line of a wood manufacturing enterprise in Tan Uyen town

The US market is thriving

According to Ministry of Agriculture and Rural Development, the export of timber and timber products across the country from the beginning of the year to the end of Sep 2016 reached about $4.9 billion; including the three biggest markets of US, Japan and China accounting for 68.8% total exports of the timber industry. In recent years, the export of timber and timber products into the US market increased averagely 10-15% / year. Besides, the Japanese market has been an export market with good growth rates, in 3 years 2013- 2015 increased averagely 13%/year. Meanwhile, the EU market has been slowing.

BIFA representative said that so far the US market was still the largest consumer of timber enterprises in Binh Duong. BIFA average monthly export to this market is tens of million dollars. The growth of provincial timber industry was due to the synchronous investment of enterprises. Many companies spent millions of dollar to purchase modern equipment, machinery to meet rigorous requirements of the US market.

Regarding the EU market, although this year there were signs of slowness, especially after the UK left the EU, affecting the timber industry, these impacts are not much. According to Mr. Luu Phuoc Loc, Director of Mtrade Company, the UK imports only small quantities of wood from BIFA, EU members are key partners of BIFA. Currently, the impact of the UK leaving EU on Binh Duong timber industry is negligible. However, provincial timber businesses are not allowed to be subjective and underestimate, but need to actively expand the markets.

Positive signs from the Russian market

Every year, BIFA actively takes part in trade fairs of the timber industry. In addition to trade fairs hosted by Vietnam Furniture’s Association and Southern Furniture’s Associations, BIFA has regularly participated in trade promotion events in Asian, European countries. BIFA also supports its members in joining exchange programs with Furniture’s Associations of Korea, Japan ...

Through surveys and sales approach conducted in Germany, Canada, and Middle East countries, BIFA confirmed, potential of these markets were huge. Meanwhile, Vietnam and Asian - European Economic Union free trade agreement will take effect from Oct 5^th 2016, that opening up many opportunities for provincial timber industry to expand the Russian market. BIFA representative said, in 2015, BIFA had participated in trade promotion in the Russian market, while this economy was still in recession. Thus there were no orders, although BIFA had realized potentials of this market.

Recently, a timber exporter to Russian market said, Vietnam's wood products are highly valued in Russia. Quarterly, this enterprise exports 30-40 containers of wood products to Russian market. The biggest problem is the long customs clearance duration (3-4 months). Demand for exported wood products of this market is now higher than supply. However, the Vietnam and Asian - European Economic Union free trade agreement is expected to eliminate this barrier.

Experts stated that the Vietnam and Asian - European Economic Union free trade agreement would contribute to the Russian economy’s recovery. This is a potential market of key export goods of Vietnam. Therefore, BIFA should reconsider seeking orders from this potential market.

Reported by Phung Hieu – Translated by Ngoc Huynh