Vietnam gearing up to build U.S. business
By Powell Slaughter -- Furniture Today, August 25, 2003
Washington — Already a growing source for the U.S. market, Vietnam has a three-pronged strategy to build furniture exports to America.
The Vietnamese Ministry of Trade is working with Exsero Group, a Washington-based consultant, on programs to attract prospective buyers.
One is a buyer trip for potential U.S. customers to the Ho Chi Minh City Expo, an annual event with about 450 exhibitors that will focus this year on furniture. The show is set for Oct. 9–14.
"Out of the booths registered at this moment, around one-third will be showing indoor furniture and interior decoration products," said Nguyen Dinh Mai, deputy director of the Ho Chi Minh City Service (or department) of Trade, which organizes the event.
Mai said exhibitors will find a range of styles. Vietnam already exports to Europe, Japan and other markets in addition to the United States, so manufacturers are used to gearing product for export customers.
Because of government regulations protecting natural forests, raw materials for furniture come from plantation forests or are imported. Manufacturers use South African woods, U.S. oak and other hardwoods, and Australian and Scandinavian pine.
Before the 9/11 attacks and a slowing economy cut foreign attendance at last year's show to 2,000, the event was bringing in around 3,000 foreign buyers a year.
Mai expects attendance to benefit this year from the focus on furniture, a travel promotion campaign and buyer benefits that include discounts at the Amara Saigon Hotel.
Part two of the Vietnamese effort comes in November, when Exsero is developing a weeklong tour for a delegation of buyers to visit furniture plants in the Ho Chi Minh City area. Part three is a buying trip that picks up at the end of the Ho Chi Minh City leg, to facilities in the rest of Vietnam.
Buyers participating in the first trip, scheduled to begin Nov. 10, may stay on to participate in the second, which will finish Nov. 21. Buyers also may schedule sourcing missions individually.
Vietnam's government is looking to furniture for the U.S. market as an important part of its manufacturing economy, said Nguyen Duy Khien, commercial counselor with the Trade Office of the Embassy of Vietnam in Washington.
"Vietnamese authorities feel we have great potential in this industry," he said. "Vietnamese manufacturers are good at production, and the U.S. companies sourcing there bring strong designs and are good at marketing."
Vietnam developed furniture-manufacturing capability in response to demand created by large hotels built by foreign investment in the past 10 years, said Jeff Dilley, chairman of Exsero. While the country had a wealth of artisan skills, high-quality furniture was not available from mass-producers until then.
"All that construction came from abroad, and they had a demand for superior products," Khien said. "Now, even five-star hotels there have furnishings made in Vietnam by Vietnamese-owned companies."
While Furniture/Today's research showed Vietnam with $63 million in exports to the United States last year, that didn't include components and doesn't tell the full story of the country's furniture capacity.
Khien said Vietnam exported close to $500 million in furniture last year, but most went to other markets, such as Europe. If the world economy stabilizes, he said more plants are likely to expand to increase capacity.
In addition to developing business with large U.S. importers, Khien said Vietnam is attractive for U.S. buyers who don't offer the volume to interest the larger Chinese manufacturers.
"Our biggest challenge is to convince U.S. buyers that Vietnam has a manufacturing base adequate for their needs," he said. "That's why we're working with Exsero to bring buyers to see our plants."
Exsero has been working in Vietnam for 10 years developing business partnerships between foreign and Vietnamese companies. Contact information for the furniture exposition and buying groups can be found at www.exsero.com.
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