Wood Coating Market – The Whole Picture Of Vietnam Market 2024

Vietnam Wood Coating Market Analysis According Pest

The wood coatings market, in particular, is also attracting many new opportunities. As new doors of opportunity open, various challenges are also on the horizon. While international orders have gradually recovered in the early quarters of 2024, Vietnam continues to face numerous challenges. Specifically, import-export taxes across countries remain high and are expected to rise further in the future.

Political Factor – Internal and External Incentives

1. Government Laws and Encouragement Policies

Vietnam has stringent laws for controlling product quality, especially for items that involve chemical use. To protect public health, coating companies must ensure VOC levels are within limits and obtain specific ISO certifications before their products can enter the market. There are also strict regulations concerning the concentration of heavy metals.

2. Economic Exchange Policies

As a developing economy, Vietnam enjoys various economic incentives such as tax exemptions within Southeast Asia and other economic alliances. Vietnam is also actively participating in FTAs, ASEAN, and APEC. The Vietnamese government continuously optimizes policies to attract foreign investment, with a strong emphasis on boosting the wood coatings industry.

3. Incentives for the Wood Coatings Market

Government incentives for sustainable and environmentally friendly products are on the rise. This compels business owners to carefully select materials and produce safe products. Moreover, this serves as a catalyst for innovation and sustainability. Additionally, competitions that encourage creativity are held to foster innovation in the industry.

Economic Factors – Highly Anticipated Growth

1. Economic Growth

For the wood paint industry, in Q1/2024, Vietnam recorded a comeback in the sector. The export volume of wood paint reached 2.57 million tons and is expected to grow by 5% during the period from late 2024 to 2029. The wood industry in Vietnam reached USD 3.4 billion in the same period of 2024. The resurgence of the wood industry also provides a boost for the paint industry.

• Interior Paint: Accounts for 35% of the market share, making it the largest segment.
• Exterior Paint: Accounts for 25% of the market share.
• Wood Stain and Wood Varnish: Each accounts for 15% of the market share.
• Primer: Accounts for 15% of the market share.

2. Consumer Spending

Increases in wages and urbanization are factors leading to higher demand for improved quality of life. Consequently, consumers are focusing on spending on smart, high-quality, and safe products. This has led to a gradual rise in demand for premium products, marking a period of innovation in the paint industry.

3. Rising Raw Material Costs

Vietnam faces rising costs in all areas. This is partly due to inflation and efforts to improve the quality of life for its citizens. As of the first three months of 2024, raw material costs have shown no signs of decreasing. Among these materials, the prices of solvents and adhesives have been increasing significantly.

4. Rising Labor Costs

In addition, labor costs have also increased. Overall, labor costs in Vietnam are still lower compared to other developing countries. However, the continual improvement in skills among Vietnamese workers has led to increasing demands for wages that match their capabilities. There is also a shift of investment from Vietnam to India, where labor costs are significantly lower. Notably, many foreign investments have redirected to this populous country.

5. Intense Global Conflicts – Significant Cost Increases

The challenges do not end here; new difficulties arise. Vietnam is facing increased costs from multiple fronts. Following conflicts such as the Ukraine war and the Red Sea conflict, many shipping costs have surged by 50-80%. For instance, shipping surcharges to the US and Europe increased from USD 1,500 per container to USD 4,500 per container in mid-Q2, causing many businesses to struggle (Hawa – Wood Magazine/2024). Additionally, companies are dealing with a lack of empty containers and extended shipping times due to congestion in the Suez Canal.

6. Logistics Development

Recently, in June 2024, the construction of the Can Gio International Transit Port has been accelerated, marking a new milestone in the logistics industry. This development is a ground breaking strategy to reduce transportation time and costs while boosting the country’s economic growth.

 

Social Factor – Health and creativity are two of the most pressing concerns.

1. Customer Priorities

In 2024, prioritising health has become paramount. After four years of the COVID-19 pandemic and other health crises, public awareness of health has significantly increased. In the paint industry, the shift from traditional paints to low-odor, safe, low-VOC, and environmentally friendly paints has accelerated. Besides health, aesthetics are also a crucial factor. Therefore, the quality of final coatings and a diverse palette of colors are major selling points for customers. Paint companies are focusing on these aspects to better attract and retain their clients.

2. Urbanization

The acceleration of urbanization has increased the demand for new construction and infrastructure improvements. This is particularly true for high-end hotels and resorts, where wood and wood-based interiors and exteriors remain among the most popular materials in the industry.

3. Craftsmanship Culture – Innovative Creativity

The skill of artisans from traditional craft villages is always admired. This year, wooden toys for children have created a new trend. This trend has also driven the development of high-safety paint products such as BIOMASS. The DIY (Do It Yourself) culture is particularly strong among young people, especially Gen Z. Reality shows continue to boost creativity and cost-saving measures. As Gen Z is at a stage of seeking experiences and self-expression, this culture aligns perfectly with their interests. Wood paint provides a colorful medium for them to fully unleash their creativity.

 

Technology Factors – New Technology Was Born in Wood Coating Market

• Innovations in Coating TechnologyAdvances in technology, such as UV-resistant exterior coatings and nanotechnology, have enhanced durability. Additionally, there are coatings made from recycled materials and raw resources. For example, in February 2022, Synthos, a Polish paint company, launched a bio-based acrylic wood paint to the market.
• Growth of Multimedia and E-CommerceThe rise of multimedia and e-commerce has allowed the wood coating industry to reach more potential customers. The market is expanding, and shipping times have been reduced with the advent of intermediary outsourcing.

Wood Coating Market 2024 Conclusion

Biochem – For A Green Future

Address: No 66, Street No 1, Block 1, Tan Phong Ward, District 7, Hochiminh City, Vietnam

Tel: (+84-28) 3620 4207 | 3620 4208

Fax: (+84-28) 3620 4206

Website Biochem: www.biochem.vn

Website Biomass: www.biomasscoating.com

Email: contacts@biomasscoating.com