Naturally inclined to turn towards the United States, Quebec companies sometimes look much further afield, including as far as Vietnam. Second in a series of five texts.
Forest products are one of Quebec’s main exports to Vietnam. In return, wooden furniture is among the top exports from Vietnam to Quebec. There is obviously a link. But it’s not as simple as it seems.
When we arrived that day in Giang Đien, in Đong Nai province, about fifty kilometers northeast of Ho Chi Minh City, workers were finishing decorating a large Christmas tree-shaped structure before It’s not too hot. The star atop the iron tree would shine over an estate larger than 16 soccer fields on which were vast concrete-walled, tin-roofed buildings housing Scott’s Furniture Factory. Luu, its offices, its warehouses and the scooter parking lots of around a thousand employees.
Inside, the atmosphere is less aggressive than one would have imagined. The hum of ventilation pipes blowing away wood dust largely drowns out the noise of the machines by which workers transform planks of wood into all sorts of pieces to be assembled into chairs, tables and other furniture . Calm and focused, the workers move slowly and precisely, the men wearing baseball caps and the women wearing traditional Vietnamese conical hats.
On the long wall of bundles of wooden planks which rise almost to the roof and which are waiting to be transformed in turn are printed in large letters the letters “DZD” with a red maple leaf or “DV” with the mention ” Made in Canada ” in green. DZD stands for the Compagnie de bois franc DZD in Saint-Jérôme, Quebec, while DV refers to the company Bois francs DV, which is located in Fassett, near Montebello, in the Outaouais.
“We import 99% of our wood,” explains Scott Luu, 42, a small man with a round, shaved head, an easy smile and modest success. “It comes from almost everywhere: New Zealand, South America, Canada, the United States, Europe… And we export 100% of our production, almost only to the United States, but also a little elsewhere, such as in Costco stores in Canada. »
Wood occupies a privileged place in trade between Quebec and Vietnam. In 2022, it came in fifth place among Quebec’s main export products to Vietnam, while furniture and other wooden products arrived in the top ranks of goods sold by Vietnam on the Quebec market, reports Institute of Statistics of Quebec.
These statistics can, however, be misleading, warns Geoffrey Lavallée, a 53-year-old Quebecer who set up, with his partner of Vietnamese origin, a local company (Les Bois Viet Can) acting as intermediary between Quebec wood exporters and their Vietnamese buyers. In fact, he says, this Quebec wood sold in Vietnam comes largely from Ontario or elsewhere in Canada, but mainly from the United States. It only passes through Quebec to be sawn and dried before being shipped.
As is often the case in Asia, business relationships in Vietnam are built little by little, through patience and personal contacts, explains Geoffrey Lavallée. “About twenty years ago, I didn’t want to do business in China because I didn’t like their ways of doing things. I found them too harsh in their relationships, always trying to extract an extra penny from you and always ready to leave you stranded without warning. The Vietnamese take longer to decide and pay you, but they are loyal in business. »
In this universe, the dollar is king and master, the reference unit is the container, holiday purchases are planned seven months in advance and the moods of the global economy can be costly. And we sometimes witness strange phenomena, such as the transformation in China of birches cut in Russia into “Chinese birches”, to avoid trade sanctions imposed in the wake of the invasion of Ukraine.
The impact of trade wars
The big start for the Vietnamese furniture industry came when the United States lifted its embargo on Vietnamese exports in the mid-1990s. At the time, the country didn’t really have any large factories in the sector, remembers Scott Luu, and entire villages were placed with manufacturing orders.
The US-China trade war, with its US tariffs on Chinese exports, has provided another major boost to Vietnam’s industry, says Simon Pan, managing director of a flooring company engineering in Tân Uyên, about thirty kilometers north of Ho Chi Minh City. This triggered a large exodus of Chinese companies, particularly in Vietnam, but also in other countries in the region.
When asked what kind of international standards he must meet in order to sell his furniture abroad, Scott Luu responds: “My quality standards are those of my customers, Costco and Disney. More than half of my sales are children’s furniture. Expectations in this area are very high. There is no room for error, and we don’t want any scandal, environmental or otherwise. »
My cabin in Vietnam
Vietnamese manufacturers don’t just import wood to process it and then ship it back abroad, says Nguyen Giang Nguyen, deputy general manager of a company in Biên Hòa, Đồng Nai province, which is one of the largest wood distributors in Vietnam. “The Vietnamese are very traditional when it comes to choosing their furniture and the layout of their homes. They like that they are made of wood. »
However, if the Vietnamese economy is still recovering from the shock inflicted by the COVID pandemic, it should eventually be able to count on a constant increase in demand from its own growing middle class.
With this in mind, Nguyen Giang Nguyen’s company had the idea of taking advantage of the slowdown in business to develop a new project. Seeking to capitalize on the desire of a certain class of Vietnamese to afford second homes in nature, she designed models of wooden chalets ready to be assembled, one of which, in hemlock and oak, is supposed to be inspired by the “Canadian cabin”. Erected under trees alongside a “Japanese pavilion” and a “Chinese cottage” at the back of a large lumber yard, our Canadian cabin is the smallest model of the three. All brown, it is made of plank walls with large windows, is covered with a gabled tin roof and is surrounded by a large wooden patio. It vaguely resembles a very large cabin or a very small fishing camp. “We haven’t sold any yet. They are a little expensive,” admits Nguyen Giang Nguyen.
The land of all possibilities
All this excitement in the wood and furniture industry in Vietnam could be snuffed out suddenly by the return of Donald Trump to the White House, fears Simon Pan. “It would be just like him to extend his trade war against China to all Asian countries, including Vietnam. »
But for the moment, the fantastic momentum that Vietnam has taken in this area makes Geoffrey Lavallée dream, who has just given himself a new office, hired a new employee and rented a new, larger storage space for the wood that he brings from Quebec.
He is thinking in particular of finding a Vietnamese company that could manufacture furniture for him that he could then export to Quebec. “I would like that, to do the complete value chain. I would like to be able to walk into a Brault et Martineau store, see a kitchen set and say: “I made that with wood from home.” »
These reports were financed thanks to the support of the Transat-International Journalism Fund.The duty.