U.S. slowdown hits Indonesia's furniture exports

JAKARTA (JP): An association warned that the country might not be able to reach its target revenue of US$1.8 billion from furniture exports this year due to the economic slowdown in the United States.

M. Djalal Kamal, chairman of the Indonesian Furniture and Handicraft Industries Association (Asmindo), said on Thursday that the country's furniture exports, especially low-end furniture products, to the United States had been declining over the past six months due to the economic slowdown.

Low-end furniture products account for 70 percent of furniture exports to the U.S., which is Indonesia's largest furniture importer, Djalal said.

"If Indonesian companies are unable to find a breakthrough, we will not reach the furniture export target of $1.8 billion this year," he told reporters on the sidelines of a seminar on the prospects of Indonesian furniture exports to the U.S.

He said one possible breakthrough was for the country's furniture makers to enter the U.S. middle and high-end furniture market, where demands are still strong.

He also said so-called ethnic furniture still sells well in the U.S. despite the economic slowdown.

Henny Priyono, marketing director of InterAsia Furniture and Craft Agency (IFCA), a consultancy firm specializing in furniture, explained that U.S. demands for middle and high-end furniture products were valued at US$40 billion, or 80 percent of the country's annual furniture demand of $50 billion.

During the seminar, Henny announced that Asmindo and the Indonesia Forestry Society (MPI) had formed a strategic alliance with IFCA and North Carolina, the U.S.-based coating and chemical company Lily Industry Inc. to improve the country's furniture products as part of efforts to enter the U.S. middle and high-end furniture market

According to the Central Bureau of Statistics (BPS), Indonesian furniture exports to the U.S. reached $361.1 million during the first 10 months of last year. Total exports during the same period was $1.2 billion.

Exports to European countries, including the Netherlands, Germany, England, Belgium, totaled $473 million in the same period.

Japan imported $151 million of furniture products during the same period, or about 12.6 percent of the country's total furniture exports. (05)