In 2019, two Tennessee hardwood lumber companies embarked on a U.S. Department of Agriculture (USDA) trade mission to Vietnam. Their goal was to expand and diversify market opportunities in the wake of declining sales due to trade restrictions with China.
Vietnam is a major market for the hardwood industry. Unlike China, where most hardwood products are manufactured and stay within the country, Vietnam moves products through its manufacturing structure with final destinations in Europe, Asia and the United States. It’s a natural place to look for opportunities to expand.
“Vietnam over the last several years has been very aggressive in developing their markets for American businesses,” says Rance Frye, CEO of Fidelis Forest Management. “They have been proactive in developing their infrastructure within the country, including their banking and port systems. Companies in Vietnam can bring in products more easily and cost efficiently.”
Frye had never been on an international trade mission before but was pleased with the result.
“I learned more in a week than I could have learned in six or eight months hammering away at it on my own,” says Frye, who appreciated the business-to-business meeting opportunities organized by the USDA Foreign Agricultural Service and Tennessee Department of Agriculture.
Hugh Clark, president of Clark Lumber Company, agreed. He came back from the trip with orders in hand and expects more to follow. Clark says as American tastes have changed, international markets have become much more important to the survival of the hardwood lumber industry. And although trade disputes have brought about significant challenges, Clark is not ready to give up on the business.
“We like the industry we’re in because we are using a natural resource that is replenishing itself faster than we are harvesting it. So that’s a good position to be in,” Clark says. “We would really love to have a little more marketplace for our product, but we’re going to try to survive this thing.”
The two lumber company representatives joined about 80 other representatives on the trip to Ho Chi Minh City. The trade mission was one of several opportunities in 2019 for Tennessee agribusinesses to seek new market opportunities in places like Europe, Canada and East Asia. The top potential markets for hardwood products include Vietnam, Canada, Mexico, the United Arab Emirates and Germany.