Declining exports to major markets and rising raw material prices are posing a major threat to the wood products industry, the head of a wood export company has said.

Doan Van Trang, director of Khai Vy Wooden Products Export Company, said though as a result his company had reduced its 2005 export target from US$50 to $40mil, even that was proving difficult to achieve.

He attributed Khai Vy's export slump to political upheavals in France, its main market. Every year, the company exports $10mil worth of furniture to France. In November, it registered a drop of 20- 30% in exports to France, Trang said.

Besides, two major buyers, France's Carrefour supermarket and Germany's Metro supermarket chain, had cut back on wood furniture imports, he said.

Rising costs Since the beginning of this year, raw timber prices have risen 30% but the prices of finished products remain un-changed, driving many processors to despair.

Tran Quoc Manh, deputy head of HCM City's Handicraft and Wood Industry Association, said if the situation persisted, several wood companies would go bust. Many of them were already working at half-throttle to survive and provide jobs to their workers, he said.

He called on wood products manufacturers to diversify, making furniture for use at home in addition to the ones for outdoor use they currently make.

Pointing out that there was great demand in the US for home furniture, he urged the Vietnamese government to make investments to develop the segment since meeting the large American orders needed a lot of funds.

Vietnamese wooden furniture and handicrafts are shipped to 120 countries and territories, including the US, Japan, and the European Union. Total exports are expected to reach $1.5bil this year.

(Source: Viet nam News)