Thu, 08 Oct 2009
From: The Jakarta Globe
By Dian Ariffahmi
Eco-labeling and better quality control have put Indonesian furniture makers in position to grab some of China’s share of the European Union market, the industry association said on Wednesday.

All members of the Indonesian Furniture Industry and Handicrafts Association (Asmindo) that export to Europe had passed EU eco-labeling requirements, Asmindo chairman Ambar Tjahyono said.

This would improve the reputation and marketability of their products, and likely enable them to capture market share from Chinese firms, he said.

“European countries will be our next main target for exported furniture. They believe that our products are not produced from illegal logging materials” and had a better opinion of the quality of Indonesian furniture compared to that from the country’s main competitor, China, he said.

The response to Indonesian furniture had been positive during an Asmindo-government road show in Italy and Spain, which resulted in many new commitments for orders, he said.

Meanwhile, European buyers were skeptical about the quality and safety of Chinese furniture, he said.

China exports around US$500 million a year worth of furniture to the European Union and this represented a significant opportunity for Indonesian manufacturers, Ambar said.

“Many of the complaints that I heard about Chinese furniture products were about the materials that they used in their furniture, which could cause skin reactions,” he said.

Europe and the United States are traditionally the two largest markets for Indonesian furniture. However, demand from those markets is expected to decrease dramatically this year due to the global downturn.

Sae Tanangga Karim, Asmindo’s executive director, said furniture exports for this year were projected to total only $1.6 billion, down 18 percent from $1.95 billion in 2008. This was despite the industry targeting new markets in the Middle East and Eastern Europe, he said.

“Until the third quarter we booked around 30 percent negative growth on furniture exports. However, we expect the decline will ease to only 10 percent in the fourth quarter in line with the global market recovery,” Ambar said.

Currently eco-labeling on furniture products sold in the EU is voluntary. However, it is due to become mandatory by 2011.



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