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Vietnam Business » Vietnam Business News » Vietnam home market out of reach for wood industry

Vietnam home market out of reach for wood industry

Wood makers and handicraft producers have turned their focus to the local market after the economic crisis slashed export orders, but without a distribution network, a nation of customers is out of reach. At first glance, there doesnt appear to be many obstacles between the Vietnamese woodworking industry and the local customers who should be consuming its products.

Nguyen Phuoc Hien, deputy director of Tan Toan Phat Pottery Company in the southern province of Binh Duong, said Vietnamese were beginning to see their wood products not only as furniture and utensils, but also as décor and ornaments.

Foreign products like Chinese ones could not compete with those made locally, Hien said, as each one was made by hand and contained its own unique characteristics. But the assertion came with a caveat: "We have no distributors on the local market."

Hien was echoing a clear refrain heard by other manufacturers across the industry: handicrafts and wood products need their own distribution network in order to thrive locally.

The Ho Chi Minh City Handicrafts and Wood Association has been discussing the need for an official distribution network since last year, but the talks have borne little fruit.

Noting that the Vietnamese handicraft and wood industrys export turnover topped all of

Southeast Asia last year at nearly US$2.6 billion, Nguyen Van Vy, the associations office chief, said a professional distribution channel at home would be the next important step.

Nguyen Van Nhan, deputy director of NTN Company, which produces furniture and expensive handicrafts in Dong Nai Province, said the firms products had no distribution on the local market.

"An official distribution network will be much more convenient for both producers and the users," Nhan said. "It will bring more products to the market, even expensive ones, as Vietnams living standards have improved."

Ly Huu Quoi, deputy CEO at Tri Quang Wood Commerce and Production, Ltd., also said that the domestic wood-product trade would only work with a distribution channel and store chains, which will require big investment.

The Dong Nai-based company still survives mostly on exports.

A representative from Binh Phu Wood Furniture Company, which only receives 5-7 percent of its orders from local users, said it was "unprofessional" that wood producers were now distributing their own products at home. The exporter, which ships to the US and European markets, said the go-it-alone route was "wasting resources."

But some wood exporters had been able to enjoy profits only by taking more matters into their own hands.

The HCMC-based wood product maker Nguyen Vu Investment Joint Stock Company has seen its sales up recently as the company owns 5,000 hectares of acacia, the main materials in its products.

It also owns all its own machines, so it doesnt waste any money renting or outsourcing, said the company deputy general director Vo Ngoc Than.

Vietnam Business And Financial News Network. Source [thanhniennews.com]

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