According to the Vietnam Wood and Forest Products Association, Vietnam’s plywood export revenue will reach US$1.1 billion in 2022, down 8.3% from 2021.

The United States, South Korea, Malaysia and Japan are the main markets for Vietnam’s plywood consumption in 2022. Of these, plywood exports to the United States accounted for 40% and South Korea for 24% of the total export sales of plywood products of our country.

WHY DOWN?

Vietnam is credited with great potential in the world plywood market due to its rich source of planted forests that provide the necessary raw materials for plywood production. In addition, Vietnam has a fast-growing economy, which leads to an increasing demand for building materials and furniture.

In recent years, Vietnam has also invested in upgrading plywood production facilities, making it more competitive in terms of cost and quality compared to other plywood producers in the region.

Vietnam’s plywood exports have been growing rapidly in recent years, with the export value increasing from US$774 million in 2018 to US$1.2 billion in 2021. However, in 2022, the impact of inflation on major markets has reduced the export value of Vietnam’s plywood products.

With the exception of plywood used in the manufacture of sofa frames, which has been affected since Q1 2022, the remaining plywood products will remain “closed” to orders until Q2 2022. But in the third quarter of 2022, plywood mills started to suffer from the drop in orders.

Mr Vu Quang Huy, head of the Vietnam Plywood Association (under the Vietnam Timber and Forest Products Association), said high inflation and low consumer confidence prompted Vietnam’s two main plywood export markets, the United States and South Korea, to slow imports from July To reduce 2022 By the third quarter of 2022, all importers who bought goods stopped ordering.

In addition, the US Department of Commerce (DOC) anti-dumping case at the end of the third quarter of 2022 had new developments affecting the entire plywood industry exported to this market.

“The impact of anti-dumping lawsuits has made it difficult for Vietnamese plywood exporters to plan for the future and invest in their businesses. Next, the kitchen cabinet product examined by DOC has affected the entire kitchen cabinet industry in Vietnam, affecting plywood products – the starting material for kitchen cabinets,” Vu. Quang Huy pointed out.

Despite the decline in plywood products exports, Vietnam still ranks among the top 5 plywood products exporters in the world.

According to the International Trade Center (ITC), the total global demand for plywood in 2021 is about USD 40 billion, equivalent to over 105 million m3. In 2022, due to unstable factors in the socio-economic situation worldwide, the total global market demand will fall sharply and only reach over USD 32 billion.

The top world plywood producers and exporters in 2022 include: China (US$5.89 billion) with export sales of US$5.89 billion; Indonesia’s exports reached $2.51 billion; Russia exports $1.9 billion; Brazil’s plywood exports reached US$1.2 billion; Vietnam reached USD 1.1 billion.

The top plywood import countries last year include: the United States imported $4.5 billion; Japan imported $1.58 billion; Germany $1.1 billion; Korea $0.84 billion; and the UK spent $0.8 billion to import this item.

RESULT DEPENDS ON THE GLOBAL ECONOMIC SITUATION?

According to the Vietnam Plywood Association, the plywood export market in Vietnam has been “bottom fishing” since the end of the third quarter of 2022 and lasted the last 4 months. The resilience of the Plywood Export Market in 2023 will depend on changes in the global economy situation, market segments and product segments.

For the Korean market, Mr. Vu Quang Huy said that the product line exported to this market is mainly mid-range commercial plywood. In Vietnam, many factories focus on production to serve the Korean market, resulting in fierce price competition, but do not focus on improving quality to create their own niche.

In this situation, diversification of product lines and markets is currently the direction of plywood manufacturers in Vietnam to avoid being dependent on one market.

Currently, many companies are shifting to export plywood to Malaysia, making this market the third largest market for Vietnamese plywood exports.

Especially in film-faced plywood for construction, Vietnam exported heavily to Korean market 4-5 years ago, but is now turning to Malaysian market. Film-faced plywood production in Malaysia declined, their plywood mills faced labor problems, production costs rose, and could not compete with products from Vietnam.

The EU market is also interested by companies, since the lack of about 2 million m3/year of this market from Russia due to the Russia-Ukraine conflict will create great opportunities for plywood mills in Vietnam. However, the technical standards set by the EU, conformity, origin of FSC wood … are problems that many companies in our country do not easily face.

Vietnam Timber and Forest Products Association pointed out that plywood companies still have many internal weaknesses. In other words, not yet grasping the trend and not yet recognizing the risks, not actively looking for ways to avoid risks.

Also, new Vietnamese companies tend to focus on a low-cost strategy rather than product uniqueness. Most Vietnamese companies that export plywood are sold through trading companies, which makes them unable to gather market information and actively reach out to their customers to develop suitable products and find customers.

In the context of Chinese companies in Vietnam, with larger capital resources, cheaper product prices, faster product improvement speed…Vietnamese plywood companies pose great challenges.

Therefore, the Vietnam Wood and Forest Products Association recommends: The plywood industry must adapt to the changing commercial environment. At the same time, companies in the plywood and plywood industry need to improve competitiveness. In addition to developing strategies, analyzing market trends and selecting target markets, companies need to invest in modernizing technologies and new production processes.