Modern inputs boost furniture export

DOT Desk
Export growth of furniture has increased to 15–20 per cent year on year due to the use of modern technology, innovative design and quality, 15 per cent cash rebate on export furniture, cheap labour compared to other sourcing countries. These factors have helped achieve double-digit export growth for a couple of years, say industry insiders, reports The Independent.
The furniture sector obtained export earnings of USD 28.92 million in (July-November) in the current fiscal year 2018–19. This was up from the USD 18.87 million recorded for the same period in the previous financial year 2017-18, thus showing a robust growth of 53.26 per cent. Selim H Rahman, president of the Bangladesh Furniture Industries Owners’ Association (BFIOA) explained the reason and told the Independent that China, which is a global furniture manufacturer, has been striving to produce furniture at an affordable cost because the labour cost has gone up.
Secondly, China has transformed their manual industries into high-tech industries and a huge untapped opportunity has been created for Bangladesh, said Rahman who is also the Managing Director of Hatil Complex.
When asked, he said that Bangladesh exports furniture to countries such as those of the Middle East, India, Canada, Nepal, Bhutan, Malaysia, Belgium, the US and other European countries. The products have become famous because of their fine quality and innovative design, he added.
He also said that Hatil Furniture exported products worth around $150,000 to the Bhutan, Middle East, Canada, and Nepal every month.
“Hatil started exporting furniture to Malaysia from this year and our export growth is increasing at a rate of 20 per cent per year,” he added.
Describing the local market size, he said that the domestic furniture market has been growing at a rate of 15-20 per cent a year.
When asked, about the local market size, he said that the local furniture industry was growing fast because of rising purchasing capacity of consumers; researchers are applying adequate marketing strategy to understand the needs, demand and affordability of the consumers.
Bringing new design, using modern technology and manufacturing innovative product have driven the demand of the furniture to the local market, he said.
Replying to a question, he said that there was no statistical data but the local market size would be approximately Tk 3–3.5 thousand crore, he informed.
Describing the challenges, he said, raw materials such as wood, hardware, finishing materials, and other stuffs were being imported from abroad. “We pay on average 55–60 per cent import duty on raw materials, which increases the production cost of the final product.”
Bangladeshi furniture-makers import the raw materials, manufacture the products and export the finished goods. Hence, the import duty has an effect on export, he said.
“We want bond facilities that are given to export-oriented industries for importing raw materials without paying any duty or taxes. Availing the bonded warehouse facility is essential for export-oriented industries, as it enhances their export and price competitiveness,” he added.
Karim Mojumder, organising secretary of BFIOA told The Independent that China, Malaysia, Vietnam and Thailand were the biggest furniture sourcing countries in the world but their production cost had gone up because of government policies and rising labour costs.
So, it creates an opportunity for Bangladesh to grab the international market, said Mojumder, who is also managing director of Nadia Furniture Ltd. He also said the government should reform the import tariff policy to enable the furniture industry to survive and compete with global competitors such as Vietnam and Indonesia.
“Moreover, we import 90 per cent of the raw materials. This has to be reduced in the near future,” he added.