Furniture exporters face another bad year<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
It is estimated that Indonesia's furniture exports this year will
\nplunge to US$1.04 billion from $1.8 billion last year.<\/p>\n
The chairman of the Indonesian Furniture Club, Yos S.
\nTheosabrata, told The Jakarta Post on Thursday the prospects for
\n2003 were even gloomier, with export value projected to decline
\nto below $1 billion.<\/p>\n
He said that, ironically, the falling exports were occurring
\nat a time when overseas demand for furniture was quite strong.<\/p>\n
Yos said local furniture makers were unable to take advantage
\nof the growing export opportunities because their products were
\nbecoming less competitive, mainly due to excessive levies imposed
\nby provincial governments and rising labor wages.<\/p>\n
He added that the smuggling of illegally cut logs from
\nIndonesia to China also harmed exports, with furniture makers in
\nChina benefiting from the cheap illegal logs and undercutting the
\ncompetitiveness of Indonesian furniture.<\/p>\n
For example, he said, Meranti timber, which is the most
\npopular raw material for furniture makers and grows only in
\nIndonesia, is cheaper in China than it is in Indonesia.<\/p>\n
The availability of cheap timber has helped China take over
\nmuch of Indonesia's overseas markets.<\/p>\n
The main export markets for Indonesian furniture are the U.S.,
\nEurope and Japan. These destinations account for at least 80
\npercent of the country's furniture exports.<\/p>\n
\"Many buyers have postponed placing orders for Indonesian
\nfurniture because China offers cheaper prices with the same
\nquality wood,\" Yos said.<\/p>\n
He also said that over the last two years, the local furniture
\nindustry had been burdened with various fees imposed by
\nprovincial administrations recently empowered to manage their own
\neconomic affairs.<\/p>\n
The fees vary from province to province, but Yos said the
\nhighest fees could account for some 50 percent of total
\nproduction costs.<\/p>\n
The association is also critical of the recent increase in
\nprovincial minimum wages, which it says harm the profitability of
\nthe furniture industry.<\/p>\n
Yos fears that if the government continues to increase the
\nminimum wages amid an unfavorable business climate, the industry
\nwill collapse costing thousands of people their jobs.<\/p>\n
Illegal levies during shipment is another obstacle that
\nincreases costs for the industry, he said. The association, which
\ngroups furniture makers, traders and bankers, has long complained
\nabout this problem.<\/p>\n
Furniture makers, particularly those that ship their goods
\nthrough Tanjung Priok port in Jakarta, are forced to pay illegal
\nlevies to corrupt public servants and hoodlums. These levies can
\naccount for up to 10 percent of the production costs.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/furniture-exporters-face-another-bad-year-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}