Vietnam – an important wood-sourcing market for IKEA suppliers

Giafar Safaverdi – Managing Director of Supply Area South East Asia

How does IKEA evaluate and position Vietnam in the current IKEA supply chain?

Vietnam is recognized as a strategic sourcing destination in IKEA’s supply chain. The country’s robust manufacturing capabilities, favorable policies for importing-exporting, and logistics advantages make it an essential contributor to our global purchasing and supply chain.

What does IKEA expect when participating in the Vietnam International Sourcing 2023 event?

IKEA seeks to share our sustainable sourcing practices following People & Planet Positive, the IKEA sustainability strategy, which covers the entire IKEA value chain. Furthermore, we anticipate gaining insights from fellow participants and aim to embrace Vietnam’s role as a sourcing destination with its manufacturing capabilities.

As the world’s largest private retail furniture business, has IKEA been sourcing materials from Vietnam in recent years? If so, what are your observations about furniture products originating from Vietnam?

We have been present in Vietnam with our sourcing footprint since 1993 and we continue to grow our supply partners base in the country until now. Globally, we have continuously worked with our supply partners throughout the years to make great and safe products for our customers regardless of where they are made. Our supply partners in Vietnam also share the same culture and value in creating home furnishing products that are well- designed, functional, affordable, and sustainable.

What are the criteria for selecting suppliers at IKEA? To become a partner of IKEA specifically, and home furniture retailers in Sweden in general, what criteria must Vietnamese businesses meet?

We cannot comment for other furniture retailers but we can share from our side. For IKEA, our suppliers and service providers are key to creating a better everyday life for the many people. Together, we explore new ways to run and grow our businesses in a socially and environmentally responsible way, collaborating on challenges and being partners for positive change. We choose suppliers that share our values and ambition to become people and planet positive. We have IWAY – a supplier code of conduct at the core of our business. IWAY is the IKEA way of responsibly sourcing products, services, materials and components. It sets clear expectations and ways of working for environmental, social and working conditions, as well as animal welfare, and is mandatory for all suppliers and service providers that work with IKEA. Our code of conduct enables decent and meaningful work for every worker in the IKEA value chain and contributes to positive change in local communities.

Currently, Vietnam is emerging as one of the largest global markets for wood export. What are your expectations for wood sourcing from Vietnam when participating in the Vietnam International Sourcing 2023?

Vietnam is an important wood-sourcing market for IKEA suppliers. It offers a high volume of acacia – dark-colored wood species originating from FSC-certified plantations, which is well suited to our outdoor furniture products. Soon, we will look into Rubberwood as the potential available sourcing material as well. For several decades we have worked alongside different partners in Vietnam to improve forest management. Wherever our suppliers source wood from, to minimize the risk of wood entering our supply chain that does not meet our own requirements, including legal requirements, we require our suppliers to only source FSC-certified wood-based materials. We hope through this platform we can emphasize building and sharing knowledge to improve wood sourcing practices, and by that enhance local livelihoods, climate resilience, and sustainable forest management to embrace any changes in different markets.

The EVFTA has brought significant opportunities for Vietnamese goods in Sweden and Europe. What advice do you have for Vietnamese businesses to effectively utilize this agreement, and expand their presence in the Swedish and European markets?

The EVFTA has been instrumental in promoting Vietnam’s exporting capabilities. Manufacturers should focus on upholding high product standards and understanding the preferences of global customers to build on the given advantage. Building strong distribution networks and emphasizing sustainable practices will help in making the most of this opportunity.