{"id":1074,"date":"2022-09-23T15:28:33","date_gmt":"2022-09-23T08:28:33","guid":{"rendered":"https:\/\/pacificcapital.vn\/?p=1074"},"modified":"2022-09-23T15:28:35","modified_gmt":"2022-09-23T08:28:35","slug":"motivated-from-exporting-to-the-us-will-vietnamese-wood-enterprises-make-a-profit-breakthrough-in-2022","status":"publish","type":"post","link":"https:\/\/pacificcapital.vn\/en\/motivated-from-exporting-to-the-us-will-vietnamese-wood-enterprises-make-a-profit-breakthrough-in-2022\/","title":{"rendered":"Motivated from exporting to the US, will Vietnamese wood enterprises make a profit breakthrough in 2022?"},"content":{"rendered":"\n

The export turnover of wood and wood products (W&WP) to the US increased 2.5 times compared to 2018, the compound growth rate reached 25.04%\/year.<\/h2>\n\n\n\n

Since 2018, following the escalation of the US-China trade war, the US has applied anti-dumping duties (183.36%) and anti-subsidy duties (from 22% to 194.9%). wood products from China. This has pushed the US market to actively import Wood and Wood Products (G&SPG) from the Vietnamese market to replace the Chinese supply. After 4 years since the above event took place, Vietnam’s W&WP export turnover to the US increased nearly 2.5 times from 3.6 billion USD to 8.8 billion USD and with a compound growth rate reaching 25, 04%.<\/p>\n\n\n\n

\"Motivated<\/a><\/figure>\n\n\n\n

In 2021, despite being affected by the Covid-19 epidemic, Vietnam’s W&WP export turnover still reached 14.12 billion USD, up 17.6% over the previous year. The US maintains the position of the number one export market of Vietnam’s wood industry in 2021, with a turnover from this market reaching $ 8.8 billion, accounting for 59.5% of the total export turnover of the whole wood industry. In 2022, although inflation in the US restrained growth, W&WP export value in the first 8 months of 2022 still reached $6.2 billion, down 2% over the same period.<\/strong><\/p>\n\n\n\n

According to data from the General Department of Customs, it is estimated that the export value of W&WP in August 2022 reached US$1.35 billion, up 65% compared to August 2021. Generally, in the first 8 months of 2022, the export value of W&WP is estimated at 11.07 billion USD, up 6.2% over the same period in 2021. In the US market alone, the total export turnover of W&WP in 8 months reached over $6.2 billion, down 2% over the same period, accounting for 56% of the total export turnover of the wood industry.<\/p>\n\n\n\n

\"The<\/a><\/figure>\n\n\n\n

Impact from the decline in home sales in the US<\/strong><\/p>\n\n\n\n

In general, from the beginning of the year to now, home sales in the US have had 7 consecutive months of decline in the market, from a high of $ 6.5 million in January to a low of $ 4.81 million in July. This decline in home sales stems from the Fed raising interest rates to curb inflation in the US market since the beginning of the year (0.25% to 2.50% in July). This increase in interest rates indirectly led to mortgage interest rates to buy homes in the US (peaking at 5.8% with a 30-year home loan \u2013 according to Freddie Mac).<\/p>\n\n\n\n

With a higher interest rate at the moment, the US market has seen a decline in home sales, leading to the demand for wooden furniture products in 2022. In the coming time, the Fed will continue to maintain its view of raising interest rates. If interest rates are kept at a high level to control inflation, the demand for wood products here may continue to decrease, negatively affecting export companies from Vietnam.<\/p>\n\n\n\n

\"Motivated<\/a><\/figure>\n\n\n\n

High profit growth<\/strong><\/p>\n\n\n\n

Currently, Phu Tai Joint Stock Company (PTB) and An Cuong Wood Joint Stock Company (ACG) are the two largest enterprises in the wood industry on the floor. The two enterprises above, currently focusing on the US market in their export strategy, both recorded good business results in the first half of 2022.<\/p>\n\n\n\n

\"The<\/a><\/figure>\n\n\n\n

The positive business results of Phu Tai in 2021 are thanks to the strong growth of wood business, revenue from the wood segment accounts for 53% of the company’s total revenue. In 2022, the company targets revenue and pre-tax profit of VND 7,250 billion and VND 790 billion, up 11% and 21% respectively. Phu Tai’s wood revenue continues to grow thanks to trade agreements and high demand for furniture in the US.<\/p>\n\n\n\n

In the first 6 months of 2022, Phu Tai achieved a revenue of 3,617 billion, up 20% over the same period of which 1,948 billion dong was contributed from the wood business, up 7%. In particular, Phu Tai’s wood export revenue accounted for 47.87% of total revenue, equivalent to VND 1,710 billion. Profit after tax of the parent company reached VND 296 billion, up 33.3% over the same period.<\/p>\n\n\n\n

Unlike PTB, An Cuong Wood is currently focusing more on the domestic market when export revenue is only VND 306 billion, equivalent to 16.3% of total revenue. The US and Canada are the two main export markets of ACG. In which, the US market accounted for 51% of ACG’s export revenue.<\/p>\n\n\n\n

In early July, An Cuong Wood successfully signed a strategic cooperation contract with Sumitomo Forestry America – a real estate corporation with a market capitalization of more than 3 billion USD in the US market. Accordingly, An Cuong Wood will become the sole strategic supplier of this group in the US market from 2022. This can help expand opportunities to promote the company’s name in foreign markets and revenue growth from export activities of the company. The partnership is expected to contribute an additional $20 to $30 million to ACG’s annual revenue.<\/p>\n\n\n\n

Business results in the first half of 2022, An Cuong Wood Joint Stock Company recorded a revenue of 1,914 billion VND, up 12% compared to the first half of 2021. Profit after tax reached 279 billion VND, equivalent to 17% growth. ACG’s gross profit margin in the first 6 months of this year reached 29.2%. Export gross profit margin is gradually improving with an increase of 3.6 percentage points to 9%. Export is also a new business for ACG and is in a period of rapid growth.<\/p>\n\n\n\n

ACG’s revenue growth is expected to accelerate in the second half of 2022, as the second half of the year is usually ACG’s peak season. Many projects of long-term corporate customers such as Vinhomes, Novaland, Keppel Land, Nam Long, … are in the process of being completed, so domestic furniture orders have increased.<\/p>\n\n\n\n

The US Department of Industry and Trade (DOC)’s investigation of trade remedies evasion with wood products imported from Vien Nam is expected to have a negative impact on W&WP exports to the US in the second half of the year. The US Customs and Border Protection will continue to stop the liquidity of tax evasion wood products in particular and reduce the liquidity of imported wood products from Vietnam in general. However, DOC also supports Vietnamese wood exporters with a self-certification mechanism, helping large enterprises (such as ACG, PTB, …) to ensure the quality of exported products. maintain business.<\/p>\n\n\n\n

According to management, ACG does not export plywood and the value contribution of plywood in the company’s cabinet products is small. Therefore, businesses are not affected by tax investigations by the US Department of Commerce in requiring Vietnamese manufacturers to prove that wooden cabinets and plywood are not transshipped or made semi-finished products from the US. China.<\/p>\n\n\n\n

Tan Viet Securities (TVSI) believes that ACG’s revenue growth rate is forecasted at 15%\/year in the period 2022-2025 with supporting factors from the domestic market such as (1) growth potential of the real estate market; (2) the rapid rise of the middle class and high urbanization rate and (3) the trend of using industrial furniture in interior design. In addition, the company’s export promotion to familiar markets such as the US and Canada. Exports are forecasted to contribute 20% of revenue by 2025.<\/p>\n\n\n\n

Ha Linh\/Market Lifestyle<\/p>\n","protected":false},"excerpt":{"rendered":"

The export turnover of wood and wood products (W&WP) to the US increased [\u2026]<\/span><\/p>\n","protected":false},"author":1,"featured_media":1075,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/pacificcapital.vn\/en\/wp-json\/wp\/v2\/posts\/1074"}],"collection":[{"href":"https:\/\/pacificcapital.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pacificcapital.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pacificcapital.vn\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/pacificcapital.vn\/en\/wp-json\/wp\/v2\/comments?post=1074"}],"version-history":[{"count":1,"href":"https:\/\/pacificcapital.vn\/en\/wp-json\/wp\/v2\/posts\/1074\/revisions"}],"predecessor-version":[{"id":1077,"href":"https:\/\/pacificcapital.vn\/en\/wp-json\/wp\/v2\/posts\/1074\/revisions\/1077"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pacificcapital.vn\/en\/wp-json\/wp\/v2\/media\/1075"}],"wp:attachment":[{"href":"https:\/\/pacificcapital.vn\/en\/wp-json\/wp\/v2\/media?parent=1074"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pacificcapital.vn\/en\/wp-json\/wp\/v2\/categories?post=1074"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pacificcapital.vn\/en\/wp-json\/wp\/v2\/tags?post=1074"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}