Webinar: Positioning the domestic market: Growth drivers of Vietnam's timber industry in the future

1. Background

When talking about Vietnam's timber industry, we often focus on exports. With an annual export turnover of approximately 17 billion USD, exports receive special attention from enterprises (DNs), development organizations, financial investment organizations, etc. State mechanisms and policies for the industry usually focus on promoting production, developing high-quality timber raw material sources, and encouraging export expansion. Information about the industry is often confined to aspects directly related to exports. Overall, the image of Vietnam's timber industry is associated with export activities.

While the export market receives special attention from stakeholders, the domestic market has not received adequate attention, both in terms of policy mechanisms and interest from enterprises, financial organizations, development organizations, etc. To date, information about the domestic market such as market size, timber raw material input sources, output product groups, technological levels of supply chain participants, access to capital, etc., is almost non-existent. Existing information is often fragmented, focusing on risky imported raw materials as inputs for traditional craft village systems.

The lack of adequate attention to the domestic market is not only a significant disadvantage for participants in the domestic timber supply chain, including enterprises, traditional craft villages, forest-growing households, etc., but also negatively impacts exports. The investigation into Vietnam's timber industry under Section 301 by the U.S. Government in 2020-2021 is a prime example. Vietnam's import of tropical timber, also known as risky timber, to serve the domestic market was one of the key reasons leading to this investigation. The investigation had a significant impact on exports, directly affecting the industry's image, even though export products were not related to risky imported timber. In other words, the domestic and export markets are directly linked, with stability and risks from one market directly affecting the other.

From the perspective of enterprises, the lack of interest in the domestic market stems from several fundamental reasons. Firstly, unlike export products which are mass-produced according to fixed designs, products for the domestic market are not uniform, often produced according to specific customer orders, also known as 'tailor-made' products. Producing 'tailor-made' goods does not allow for large-scale production, thus making cost reduction difficult. Secondly, domestic market sales channels are complex and unstandardized, making it difficult for enterprises to sell their products. Thirdly, liquidity in the domestic market is slow; enterprises have to wait a long time and find it difficult to collect payments for their sold products. As some enterprises put it – participating in the domestic market is like 'picking up loose change'. Finally, the domestic market lacks specific product quality standards for items sold. Most consumers cannot distinguish differences in product quality and are primarily concerned with price. This reduces the motivation for enterprises to produce high-quality products.

Currently, several pioneering enterprise models have emerged in the domestic market. Using domestic plantation timber as raw material, these enterprises are pioneering in producing high-quality, environmentally friendly products; many products combine timber with other materials such as composite, fabric, fiber, etc., offering superior durability and resistance to harsh environments compared to products using tropical timber. Using domestic plantation timber to produce products for domestic consumption contributes to promoting plantation timber consumption and improving income for forest-growing households.

In addition to pioneering enterprise models, some craft villages have also undergone fundamental changes, with producers in these villages shifting their raw material inputs from risky imported timber to domestic plantation-sourced timber, such as Laminated wood and boards. This shift in these craft villages has reduced the amount of risky imported natural forest timber previously widely used by 90%. The transition from imported natural timber to plantation timber raw materials also helps reduce product costs, making products easier to consume.

However, pioneering enterprises and craft villages using plantation timber as raw material for the domestic market are currently only models and have not yet become widespread. What key factors are needed to replicate these models in the future? How should mechanisms and policies for the domestic market be adjusted? What are the responsibilities of relevant stakeholders, such as enterprises, industry associations, and small-scale producers in craft villages? These questions will be discussed at the webinar "Positioning the Domestic Market: Growth Drivers of Vietnam's Timber Industry in the Future".

2. Objectives

The webinar aims to identify the role of the domestic market in the sustainable development of Vietnam's timber industry in the future. Specific objectives include:

• Conduct an initial assessment of the domestic market's current status regarding aspects such as its role, size, and operational methods.

• Explore the current state of several pioneering enterprise models currently operating in the domestic market.

• Discuss some advantages and challenges in organizing and operating the domestic market from the perspectives of market, institutions, raw material inputs, and product outputs.

• Discuss some solutions to promote the market in the future.

3. Agenda (120’)

• Time: 14.00 – 16.00, Thursday, August 6, 2026

• Format: online via Zoom

• Participation link: https://zoom.us/j/96422367595?pwd=quHdcNlqiR0JYTbzHYM9IcLbc0GapT.1 (Meeting ID: 964 2236 7595 | Passcode: 060826)

• Detailed agenda: please see at link

4. Organizing bodies

• Vietnam Timber and Forest Product Association (VIFOREST)

• Ho Chi Minh City Handicraft and Wood Industry Association (HAWA)

• Forest Trends

• EUDR Forestry Network