RI niche in world furniture market remains small

By Berni K. Moestafa

JAKARTA (JP): In spite of an almost unlimited supply of wood and rattan, Indonesia has so far only managed to carve a less than two percent share in the global furniture trade.

Foreign buyers and local producers attribute Indonesia's failure in fully exploiting the export market to ignorance about their consumers.

The European market changes rapidly and Indonesia cannot rely on outdated designs if it wants to compete, Steward Kingston, a buyer from England, said.

"Each time I visit an exhibition here, I see the same old products on display," Kingston said during a visit to the 1999 National Merchandise and Commodities Export Show last month.

"Customers look for furniture that suits their lifestyle," he said. "It's like fashion in that it constantly changes."

Another importer, John Henderson from Scotland, says meeting consumers' tastes is vital in staying ahead of the competition.

He suggested the government send a delegation of Indonesian furniture makers to the Milan Fair in Italy in April.

"You'll see great designs over there and your people could learn a lot from the fair," John said.

He cited China as an aggressive competitor in the global furniture trade, sending delegations to international fairs, copying designs and having the finished product out within three months.

Djallal Kamal, the chairman of the Indonesian Furniture and Handicraft Association (ASMINDO), says Indonesia accounts for less than two percent of the world market, trailing even many other Asian countries such as Malaysia.

"In terms of design and fabrication we have yet to tap the international market," Djallal said.

Indonesia's main export markets are the United States, Japan, Belgium, Britain and Germany.

Djallal described Indonesia's furniture export sector as a "sunrise industry" because of its small contribution to the world market in spite of its immense potential.

The financial crisis of 1997 however bucked the upward trend, something industry leaders expect to be temporary.

Revenues from furniture exports tumbled to US$312 million last year from US$726 million in 1997, according to ASMINDO.

The plunge in the rupiah's value, which should have made Indonesian products competitive abroad, did not appear to have had any major impact.

In volume terms, exports last year amounted to 180 million kilograms, down from 355 million in 1997.

Prior to the crisis, furniture exports had enjoyed a long period of boom, with revenues reaching US$884 million in 1996, compared to US$115 million 10 years earlier.

Exports include rattan products like baskets and chairs, and wooden products like furniture and jewelry imitations.

Hartono, head of ASMINDO's raw material and marketing section, admits that Indonesia has not made any substantial efforts to approach its consumers overseas.

"We haven't conducted market research yet," Hartono said.

Most traditional carvers have little understanding on how to produce furniture that meets international standard, he said.

For instance, he said, Europeans are built differently from Indonesians, thus they need chairs that can hold their weights.

"Traditional carvers simply don't think that far," he said.

Market research, and training the manufacturers, however, takes time and money, "something we can't afford now," he said.

Another barrier is the difficulty in producing furniture that contains technical components such as joints and fittings.

The furniture industry is not backed by a strong local supply industry, and some of the components have to be imported, he said, adding that most manufacturers could not afford the investment to produce the components.

Most manufacturers do not have a kiln and drying facility to reduce the moisture content of furniture, an essential process for furnitures bound for drier climates like Europe, Hartono said.

"Using this process, furniture arriving in Europe won't crack because of the dry climate," he explained.

He suggested the government promoted the development of a furniture support industry that will reduce the investment requirements of local manufacturers.

PT Indovation, a furniture maker based in Semarang, Central Java, which exports to Europe, underlines the need to maintain high standards to succeed in foreign markets.

Indovation marketing manager Henk Lever said 25 percent of Indonesian furniture bound for Europe arrived in a cracked condition because of the high moisture content.

Sometimes buyers receive products that differ from those they had ordered, he said.

The problem with traditional carvers is that they make each item of furniture individually, so that a standard was difficult to achieve.

Indovation tries to eliminate these problems by imposing tighter standards on its products. "We try to produce on an industrial basis but give it the look of handmade finishing," Lever said.

The company also has a representative office in Europe.

"We notice the market's taste over there and then we translate it into production over here," Lever said.

Lever said business has slowed down a little bit this year and the industry had accumulated large stocks, because the commodity was oversold during the currency crisis.

"Carvers in Jepara thought the tree reached heaven," he said meaning that carvers thought demand was endless. "But it isn't true. They oversold."

Nevertheless, he believed the industry has bright prospects.

In Europe the average age of indoor furniture has dropped from 10 years, to only five to six years, he said.

A larger market for Indonesian furniture awaits outside Europe, he said. "In the United States, there is one language, one money and one television -- say 200 million people sharing the same idea."