VIETNAM - After reaching $8 billion in lumber and forest product exports in 2017, Vietnam has set its goal even higher for 2018: $10 billion. 

Lumber and wood products were the sixth largest export of Vietnam over the year, capturing 6 percent of the global market share, reports VietnamNet Bridge. Vietnam ranks fifth in the world in wood product exports and is second to only China in Asia. The country also hopes to raise domestic sales this year, after reaching $1.47 billion in 2017.

"The wood sector should evolve the domestic market to reach $4 billion in domestic consumption and $10 billion in wood and forestry products exports by 2020, according to the action plan for the development of the wood and wood products market in 2014-2020," said Nguyen Xuan Coung, minister of agriculture and rural development.

Wood product exports are already up $1.3 billion - 20 percent - over the first two months of the year. Vietnam's primary export markets are the U.S., China, and Japan.

Vietnam's rise is especially evident in the U.S. and Japan, the country's largest wood importers. In the first three months of 2017, U.S. exports from Vietnam reached $596 million - 17.6 percent higher than the same time a year ago. Exports to Japan grew nearly 7 percent, reaching $256 million, Vietnam Customs reported.

Coung says the country will have to boost forestation, apply scientific innovation, and enhance productivity if it is to meet its goals. A potential difficulty lies within the U.S., says Vietnam officials, as a lower American corporate income tax could boost the domestic industry. Vietnamese officials say they need to avoid sectors or items which are growing in the U.S.

Further boosting Vietnam is that many Chinese furniture manufacturers are relocating their manufacturing operations to Vietnam in an effort to deal with rising domestic labor costs, according to Gao Ziu Zhi, chairman of China's Tianjin Furniture Association.

Zhi says Vietnam offers lower labor costs and tariff reductions brought on by a multitude of free trade agreements. Most of the companies looking to relocate are large-scale and possess major export markets.

Source From: Woodworking Network