Vietnam’s wood processing and forest product export industry has made significant progress over the past decade and remains one of the few sectors achieving a high trade surplus. However, to ensure sustainable growth and transform Vietnam into a global center for high-quality wood production, the industry must pursue innovation, creativity, and strategic breakthroughs.
Existing Limitations and Structural Challenges
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Despite rapid growth over the past 10 years, the wood and forest product sector still faces key challenges:
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Low-quality raw materials from domestic plantations due to premature harvesting and small log diameters; local supply meets only 75% of production demand, with the rest imported.
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Weak distribution and marketing systems among domestic enterprises; limited brand recognition in both domestic and international markets.
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Many companies remain subcontractors for foreign partners, lacking iconic Vietnamese furniture brands.
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Although Vietnam has a large workforce, it relies heavily on unskilled labor, leading to low productivity and a shortage of skilled technicians and craftsmen.
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Increasing environmental and legal requirements on timber traceability and sustainability certifications are driving up input costs, affecting competitiveness.
These limitations show that without coordinated national policies, the sector still operates somewhat fragmentedly and reactively, rather than strategically.
Government Guidance: Integration, Linkages, and Market Diversification
At the Government Conference on Sustainable Development of the Wood Processing and Export Industry (August 8, 2018), Deputy Prime Minister Trịnh Đình Dũng emphasized the need for:
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Stronger linkages between enterprises and forest growers;
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Maintaining traditional markets while expanding exports to new destinations;
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Achieving and exceeding the USD 9 billion export target in 2018;
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Emphasizing corporate responsibility in environmental protection.
Prime Minister Nguyễn Xuân Phúc also reaffirmed that wood processing is one of Vietnam’s key export pillars, generating over USD 8 billion in 2017 — a 2.7-fold increase over the past decade.
However, he stressed the need for objective assessment of existing weaknesses and proposed several strategic directions:
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Deeper integration into global timber markets;
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Leveraging domestic raw materials and advanced technology;
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Strengthening management capacity and technical expertise;
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Developing an efficient supporting industry to reinforce the entire value chain.
Sustainable Development Through Legal and Certified Timber
With the growing global demand for legally sourced and certified wood, Vietnam’s industry has begun forming cooperative models between processors and forest owners to ensure traceable, high-quality raw materials.
As of late 2017:
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732 enterprises had obtained FSC/CoC certification, the highest number in Southeast Asia.
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49 enterprises were certified for sustainable forest management, covering over 226,000 hectares of plantations.
These partnerships not only help businesses secure stable raw material sources but also support small forest owners, ensuring fair prices and sustainable livelihoods.
Typical examples include:
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The FSC-certified acacia plantation model,
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Scansia Pacific’s cooperative support for sustainable forestry, and
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The Woodsland–Tuyên Quang forest-grower linkage model.
Toward a Global Furniture Hub
To remain competitive, Vietnam’s wood industry must:
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Ensure 100% legal and sustainable timber sourcing;
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Invest in modern technology and automation;
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Develop design-driven brands instead of solely OEM production;
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Train skilled human resources for value-added production;
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Strengthen trade promotion and international marketing.
With supportive policies from the Government, including a new directive being drafted by the Ministry of Agriculture and Rural Development, Vietnam’s wood processing and forest product sector is well-positioned to become a leading global production center in the coming years.