'Business almost dead'

Jamuna Nair, Contributor, The Jakarta Post, Jakarta

Carpets may sometimes evoke thoughts of the airborne transportation of handsome princes or their more corpulent fathers as they fly across the starry skies of the Arabian nights.

However, on a more down to earth but no less fascinating observation, a carpet is a network of interwoven fibers that transforms magically into an item that is simply a joy to set foot on.

However, make no mistake, carpets in the real world also fly across the globe - like when they are placed inside a plane.

Carpets, known to have originated from Egypt and Central Asia around 2000 B.C., were once hand-woven by skilled artisans for aristocrats to adorn table tops or hang on walls as exquisite tapestries, but today these underfoots are churned out in factory proportions to satiate every discerning taste and function.

It was this worldwide demand that spawned the carpet business in Indonesia that has since snowballed into a multibillion dollar industry comprising, on a conservative estimation, about eight manufacturers and 350 retailers offering an array of handtufted, machinetufted, machine woven or handknotted floor coverings.

However, the carpet industry, which saw its heyday in the 1990s along with the period's general economic growth, is today facing its worst setback -- again paralleling the current unfavorable economic conditions.

The financial crisis that began in 1997 and the ensuing years of political instability, which crippled the economy and left the local currency weak and vulnerable, has left its gloomy mark on the carpet industry.

Sinde of Antik Gordyn, a small carpet and curtain retail store on Jl. Kedoya Selatan, West Jakarta, bemoaned the current state of affairs because he had been receiving fewer orders from offices for his wall-to-wall carpets. A dealer of both imported and locally made carpets, he said his customers today were more price-conscious.

"Many of my customers are now buying cheaper and thinner locally made carpets, and adding more cushioning!" he added.

"Absolutely," was the emphatic response of one of the owners of New Sanggah Indah, a carpet retail store on Jl. Pintu Air in Central Jakarta when asked if the economic downturn had affected his carpet business.

He said cash strapped households and companies generally placed carpeting on the back burner.

"Companies may decide not to use any carpeting at all for their offices and neither is it top priority when furnishing a house," he said.

And to add salt to the wounds, the Sept. 11 terrorists attacks in the U.S. and the vociferous nationwide anti-American demonstrations that followed in Indonesia have only served to compound an already grim scenario for the industry, particularly for retailers of imported oriental carpets and rugs.

Sales of these exquisite handknotted and handwoven pieces from Afghanistan, Iran, Pakistan, India, Turkey and China, which come with a whopping price tag of between US$ 100 and US$ 5,000 (not for the faint-hearted or tightfisted!), rely heavily on the higher income groups or expatriates.

One such retailer of these oriental masterpieces, Ayub Chaudhry of Raja Carpets, says sales have slumped because many expatriates have left the country, and that those who chose to stay are not coming out of their homes to go shopping.

"I can say that since Sept. 11, it (the business) is almost dead," he said regretfully.

Although Chinese-made handknotted carpets, which take on the style and design of their Middle Eastern counterparts, are cheaper because of the lower material and labor costs, Chaudhry says it is hard to sell any kind of oriental carpet in today's economy.

"We are trying to convince people not to stop buying these carpets and do something to save this industry".

Stephen Hadiutomo, president director of P.T. Indonesia Carpet Manufacturers (ICM), the pioneer and largest manufacturer of custom handtufted woolen carpets in the country, said the company had seen orders from its customers, including luxury hotels, banks, oil companies, embassies and affluent households, dwindling since the onset of the 1997 financial crisis.

Stephen said ICM was currently focussing on its biggest overseas markets, namely the United States, Australia and Singapore, for its luxuriant wall-to-wall carpets and area rugs, which are made of pure New Zealand wool, and range in price from US$ 196 to US$ 300 per square meter.

Another carpet manufacturer, also the largest in its category and who has not been left untouched by the monetary crisis, is P.T. Classic Prima Carpet Industries, the largest manufacturer of machinetufted wall-to-wall carpets and area rugs in the ASEAN region. The company however, caters to the lower end of the market.

"Our products are predominantly made of polypropylene because most consumers in Indonesia go for lower end items," said P.T. Classic marketing director Harkrishan Bedi.

P.T. Classic, which exports its products mainly to ASEAN countries, Japan and the U.S., had its heyday in the 1990s - like most others in the carpet industry.

"In the 1980s, there was not much domestic demand (for carpets), so that forced manufacturers to export their merchandise. The local market picked up in the early 1990s and it (business) was good until early 1997," explained Bedi. The company's carpet prices have since fallen, Bedi contended.

"We are dependent on the construction industry. If there is more office space, more carpets will be required."

Nonetheless, tough times call for more creativity, or simply put, Plan B.

For example, to get through the lean times, Chaudhry with his new Pakistani/Indian takeaway restaurant next to his carpet store on Jl. Panglima Polim, South Jakarta, is putting to test Lee Iacocca's father's advice to his famous son that when times are bad, go into the food business, as quoted by the former chairman of Chrysler in his autobiography, said the owner of Raja Carpets.

Like Chaudhry, Erman Kadir, who trades handknotted oriental rugs, and handwoven dhurees and kilims in his store, Aladdin, on Jl. Fatmawati, also in South Jakarta, has also ventured into the food business to supplement his income. And like Chaudhry, Erman has vowed never to leave the carpet business although he had diversified. Through the thick and thin, the "show must go on" he asserted.

Auctioning to cut losses is also not an option for these retailers who are passionate about their work and proud of their merchandise.

"Never. We are selling regular carpets and not commercial quality carpets where the quality of the wool is not good and they are produced commercially," Chaudhry underscored.

Of course putting all of one's eggs in one basket is a sure recipe for disaster, which is why PT Classic has been prudently sowing its seeds elsewhere too.

"We are now focussing on floor carpets and option mats for the automotive industry. We have been producing such carpets but we are going more into it now," said Bedi.

As for Sinde at least, he can fall back on his curtain business, which he has been running alongside his once lucrative carpet trade.

But it is not all gloom and doom 365 days of the year for the carpet business. Festivities and holidays have faithfully (though now to a lesser degree) come to the rescue of flagging sales figures.

"It is strange, but we have received more pre-Christmas orders from America and Australia this year," said Stephen who has not raised the prices of his carpets since 1997.

"Sales pick up during the Muslim New Year," said Bedi.

And the New Singgah Indah owner finds the flood of weddings after the Muslim fasting month of Ramadhan makes for rich pickings!

On the flip side of the coin, Jakarta is also a happy hunting ground for carpet shoppers.

According to the chairman of P.T. Classic Deepak R. Chugani, carpet shops on Jl. Fatmawati and Jl. Pintu Air offer the best bargains for broad loom (wall-to-wall) carpets, and by the same token, those located in Mangga Dua shopping complex and Tanah Abang shopping area are havens for area rugs.

"Mangga Dua and Tanah Abang are the biggest markets for rugs in Indonesia. Carpets are cheap over there as they (the traders) make small profit margins but sell in big volumes," he said.

If one yearns to own a locally-made "oriental carpet" but thinks it cannot be afforded, take heart, for you can buy them for as little as $5 per square meter.

So what does the future hold for the fraying carpet industry?

Bedi was optimistic.

"When the economy turns around, hopefully in the next two to three years, the carpet industry will definitely see good times again because hotels and offices have been postponing their refurbishment's for the last four or five years. So the industry is in for a boom," he said confidently.

And so be it.