Low rupiah no boon for furniture makers<\/p>\n
Suherdjoko, The Jakarta Post\/Jepara<\/p>\n
The plunge of the rupiah against the U.S. dollar has not
\nsignificantly affected the furniture industry in Jepara, Central
\nJava.<\/p>\n
This stands in marked contrast to surges in the dollar in 1998
\nand 2000, which provided huge windfall profits for the Jepara
\nfurniture industry.<\/p>\n
\"In the past few years, buyers have been purchasing furniture
\nin rupiah so that the rise of the U.S. dollar will not have much
\neffect on our earnings,\" said Afiatun, the owner of the Jati
\nMakmur furniture company.<\/p>\n
Instead of reaping higher profits from the rupiah's slide, the
\nfurniture manufacturers are likely to see lower profits this time
\naround, said Afiatun. \"The price of timber and transportation
\ncosts have increased over the past few years, thus reducing our
\nprofit margins,\" said Afiatun.<\/p>\n
Furniture producers had planned to increase the price of their
\nproducts on the back of raising production costs, but none of
\nthem dared to do so as they were now facing stiff competition
\nfrom China and Vietnam, said Afiatun. The two countries had
\nexpanding furniture industries and were able to produce good
\nfurniture at low cost, she said.<\/p>\n
Afiatun's firm normally ships between 10 and 12 containers of
\nfurniture each month to various overseas countries, with each
\ncontainer filled with furniture worth between US$18,000 and
\nUS$20,000. \"The business is in the doldrums. This month we only
\nsent two or three containers. We expect orders to increase in
\nSeptember, however,\" Afiatun explained.<\/p>\n
Meanwhile, the chairman of the Indonesian Furniture
\nAssociation's Jepara branch, Akhmad Fauzi, said that the plunge
\nin the rupiah would likely lead to an increase in exports.
\n\"Overseas buyers will avail of the opportunity to buy more
\nfurniture. With the same U.S. dollar, they can buy more
\nfurniture. However, the windfall profits will be fleeting,\" said
\nFauzi.<\/p>\n
The furniture industry is big business in Jepara and employs
\nmost of labor force in the regency, which has a population of
\nabout 900,000.<\/p>\n
The industry exported some US$140 million worth of furniture
\nto various destinations last year. However, Akhmad complained
\nthat the business had been slow over the past two years. \"Between
\n1998 and 2000, we dispatched some 1,200 containers a month.
\nCurrently, we are only sending between 400 and 500 containers
\nabroad each month,\" said Fauzi.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/low-rupiah-no-boon-for-furniture-makers-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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