RI rattan furniture 'uncompetitive'

JAKARTA (JP): Rattan furniture makers could lose most of their Japanese buyers, the major importer of Indonesia's rattan products, if they cannot lower production costs.

The Ministry of Trade and Industry's directorate general of international trade, Djoko Moeljono, said Friday Indonesia could no longer compete with Malaysia, the Philippines and Vietnam, which also exported rattan furniture to Japan.

"Japan, the largest importer of our rattan products, says our exporters sell their products at much higher prices than those countries, even though the quality and design are the same," Djoko was quoted by the Media Indonesia daily as saying.

Indonesia exports about 32 percent of its rattan furniture to Japan. Last year, the volume of the rattan furniture exports to the country reached 100,000 units, about 0.7 percent of the market.

"Rattan furniture is very popular in Japan but the competition is growing," he said.

Japan's importers were turning to other countries because Indonesian rattan products were much more expensive, he said.

Djoko attributed the high prices to high production costs.

He said high production costs were caused not only by high labor costs and low productivity but also by inefficient processing.

Most rattan makers used outdated technology, he said. "This makes production very costly," he said.

Djoko said besides outdated technology, the quality of Indonesian product designs were not as good as those from other Asian makers.

Rattan makers should not hijack workers from other makers but improve in-house training, he said.

Another weaknesses was that the quality Indonesian exports was often not as good as was claimed, he said.

"Some Indonesian exporters have apparently made large promotions abroad, but could not actually meet the demand. This caused customers to lose their trusts in producers," he said.

Rattan furniture exports were worth US$360 million last year.

Exports will increase this year with extra supply from PT Cipta Niaga which has just started making rattan furniture.

Cipta Niaga expects to sell about $250,000 of rattan furniture this year.

Rattan product export growth is declining by 20 percent a year, but the value of exports is still increasing every year. (das)