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Alby Lim

Managing Director,
Airegold Sdn Bhd

What challenges do furniture players in Muar face now?
The biggest problem is talent retention and this is caused by the Malaysian labour law. Foreign labour permits must be renewed every three to five years and some cannot be renewed at all. This means that we must keep training new staff. Since skilled workers cannot stay very long, manufacturers stick to making furniture that is easier to produce by hand. Those with intricate or high-end details are too tough to achieve without skilled and experienced labour.

Factories in Muar typically employ 100-200 workers. If the policy to double-up their levies is enforced, we will be looking at a ballpark of RM 500,000 lost to labour cost. To some factories, this amount is nearly their entire annual revenue, so they might as well choose to shut down or declare bankruptcy.

What are your views on its industry’s performance today?
The bedroom segment in particular is the least affected. As costs of raw materials, labour and greening efforts have gone up in China, Malaysia has become a lot more competitive, in terms of solid wood bedroom in simpler designs. Higher-end dining furniture, however, sustained bigger impact. Mid-end and promotional furniture producers have better chance of survival.

Where do you think Muar’s furniture industry will be in five to 10 years?
This is why there can be very little development for Muar in terms of product segment. Almost everyone is manufacturing promotional items. Nothing much will change in five to 10 years’ time unless the government recognises that we are a very labour intensive industry. Then labour policies will have to be relaxed to support our needs.

However, factories will grow to offer more varied products by adding production lines. Others will partner with sub-contractors for product variety. At Airegold for example, we have forayed into using imported American solid oak for a new rustic range of furniture. We used to focus on contemporary styles using rubberwood. The latest collection is tailored for the east European markets, which has made up for much of the 70-80 percent drop in our UK orders.

Ng Chong Lim

Managing Director,
Perabut Chip Hong Sdn Bhd

What challenges do furniture players in Muar face now?
The labour policy is not supportive of foreign workers. On the other hand, local workers are not willing to take up this job. Without foreign workers, this industry will perish. Our business had dropped by 30 percent but labour force decreased by 40 percent. This policy will not work and it is hurting the industry.

There has not been much development this past two years in Muar. Muar companies are still very focused on rubberwood. This is actually a weakness. It is difficult for us to be flexible. Eastern Europe has woods like pine and beech varieties that are very easy to import. But using imported wood makes us less price competitive so this is impossible.

Currency differences deter us from buying highly advanced machinery. High-end Italian furniture can be made using very automated equipment costing about US$500,000. But with this same amount we can only import a CNC machine. So we can't really invest in this area to make higher-end products.

But the world market and consumption of furniture is very large. There is still enough market pie for Muar’s furniture. Muar supplies to only a small portion of this demand so it really depends on how you position yourself. Italy’s factories cannot achieve our volume, which supplies to a very big market of middle-income homeowners.

What are your views on its industry’s performance today?
The furniture industry’s growth is tied to the economy globally. All businesses are affected. Ours dropped by about 30 percent.

We have a better outlook now as compared with some months ago. There have been more orders coming in but this might be because buyers’ warehouse stock has finally been cleared and they need new shipments to put on retail floors. The improvement may only be temporary since the labour problem is not resolved.

Where do you think Muar’s furniture industry will be in five to 10 years?
With our raw material supply and current facilities, it is likely that we will still stick to what we are doing now, even in five to 10 years’ time. There might be changes, but they will not be very significant. In Muar, we will still go for volume – it is the red sea, not blue sea strategy. To have this volume, we need speed. We are more akin to the Proton than Mercedes.

One of the small changes may be a shift to using more MDF and veneer since it is cheaper and more consumers prefer this option now. However, there are not many veneer suppliers here, given that Muar traditionally specialises in rubberwood furniture. But there are definitely market opportunities for this segment.

Chew Weh Lit

Managing Director,
Instyle Sofa Sdn Bhd

What challenges do furniture players in Muar face now?
Companies here need to upgrade themselves technically and in terms of infrastructure so as to reduce costs and increase productivity and product quality as well as shorten delivery lead-time. Once these are achieved, I am sure there will be positive development in the industry.

What are your views on its industry’s performance today?
As the economy recovers, the propensity to spend will increase. This will lead to a sudden shortage of supply. As long as manufacturers can meet this surge in demand, they will see many opportunities.

Where do you think Muar’s furniture industry will be in five to 10 years?
Twenty years ago, manufacturers called the shots and set the prices. Today, things are different. Manufacturers have to compete against each other to meet buyers’ prices. Producers must cut costs and avoid wastage of raw materials, so that they can offer value products.

Lim Poh Teot

Executive Director,
Jaycorp Bhd

What challenges do furniture players in Muar face now?
Foreign workers are blamed for the social unrests recently. But as their employers, we are even more concerned about their discipline because a delinquent worker will cause our production to be interrupted. We monitor them so closely so that we are alerted first hand if they don’t turn up for work so they wont have a chance to make trouble.

It is not that we don’t want to employ local workers but the reliability is not there. Unlike foreign workers, they are harder to control and generally prefer not to work in furniture factories.

Insurance companies have been too conservative and reluctant to cover the industry. Without insurance, the owner cannot sleep well. And in order to have full coverage, owners have to pay high assessments and increase operation costs. The government should step in and work on this matter.

What are your views on its industry’s performance today?
Today, the challenge comes from Vietnam and China. Industry players have to keep abreast with international development, improve their designs, R&D as well as material innovation.

Where do you think Muar’s furniture industry will be in five to 10 years?
We cannot run away from productivity. Materials only make up 35 percent of total costs. We can’t keep relying on manual labour. Automation is the way to go.

Like all industries, we started as OEMs. Later on, we have to develop and move to have our own brands. We have to go through R&D in this process.

In Muar, many are still OEMs. We haven’t come to a stage where they aggressively push for their own brand. But at least 60-70 percent of the manufacturers here are going for their own designs as ODMs now.

Collin Law

Managing Director,
Wegmans Furniture Industries Sdn Bhd

What challenges do furniture players in Muar face now?
There are some unhealthy price wars going on between manufacturers in Muar, including those in other parts of Malaysia. You may find the cheapest wooden furniture in Muar and not anywhere else. What I can see is that some wooden dining chairs produced here are the cheapest in the world. This is not a good trend, as margins will become very thin. There is enough market for these products but this is not the game that Wegmans plays.

We also need more VAT rebates. After all, price is still very important. With the cost of foreign labour possibly doubling, we have to make our products more price-competitive. Tax rebates can also help us in our branding efforts. Booth design in overseas exhibitions for example, reflects our brand image and this requires more money than the grants we currently tap on.

Many here use rubberwood in their furniture. There is a market for US imported hardwoods such as walnut and oak. We also have this range. But not many in Muar are willing to do this. It is difficult for the few of us to grow in this segment this way. Only when there are more people using this material then can we be more competitive. We can even consolidate our orders and get better prices from suppliers.

What are your views on its industry’s performance today?
The industry is showing signs of recovery. Orders are coming back. The economy has already hit rock bottom and can’t get any worse. I feel that we can see the light now. Things are really not as bad as imagined, that we would have to endure two to three years without business.

Muar’s cheaper bedroom sets are still selling very well. Lower-end furniture is generally doing better and in the US too. Even for Wegmans, which is more design centric, there is also certain market demand, which is not bad. We need to continue to exhibit internationally to be known and remembered.

Where do you think Muar’s furniture industry will be in five to 10 years?
The younger and more modern generation of furniture entrepreneurs have to pay more attention to product innovation, reasonable pricing, good quality and on-time delivery. We don’t have to offer the cheapest price but we can offer a reasonable one. We need to have shorter delivery lead-time so that everyone can save costs in inventory. Those with these qualities will survive.

In Muar, most companies are OEMs. Some like myself will slowly move away from this though we still have to make adjustments for buyers from around the world.

Chua Ser Liang

Managing Director,
Instyle Furniture Industries Sdn Bhd

What challenges do furniture players in Muar face now?
The only challenge is labour supply. Furniture is a labour intensive industry. This industry hinges on labour supply, without which we cannot survive.

Today, conditions are tougher as competition is stiff. There is an oversupply of furniture and it is increasingly difficult to compete on price.

Banks are still afraid to support this industry. But in one to two years, they will change their minds because there are no other industries to develop.

What are your views on its industry’s performance today?
Business outlook now is definitely better than last year. Everything is on track now. As Chinese factories can no longer offer the best quality at the best price, demand for their products have reduced and buyers are looking to Malaysia.

Where do you think Muar’s furniture industry will be in five to 10 years?
There will be a bright future and many opportunities, especially with China’s rise. China is very interested in investing in Southeast Asia and can help us improve our infrastructure with their huge foreign reserve funds.

Secondly, as its population grows wealthier, the country will demand more furniture both from local and imported source. Malaysian exports can cater to this need.

Ng Jui Nam

Managing Director,
Soon Her Sing (M) Sdn Bhd

What challenges do furniture players in Muar face now?
The only problem we face in Muar is the shortage of labour. We need the association’s help to be the vanguard and voice our problems to the government. We can’t do it alone as individual companies.

What are your views on its industry’s performance today?
Now we need to be more focused and roll out better products so as to gain a foothold in the world market. In the past, furniture was not so competitive a market. We need to have better quality, more competitive prices and on-time delivery in order to compete globally.

In terms of development, we have better design sense now. More companies in Muar are beginning to move towards ODM.

Where do you think Muar’s furniture industry will be in five to 10 years?
Muar will still be the base for dining, office and rubberwood furniture. It is important to specialise in order to succeed in Muar. In each category, there are very few manufacturers who will diversify. Just like when foreign buyers want to buy solid rubberwood furniture, they come to Muar, not Sungai Buloh.