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Bowlman Shifts Focus To Europe

Johor, Malaysia: With the declining US market, Malaysian exporters have been looking towards alternative markets to make up for the shrinking demand. Johor-based Bowlman Furniture Sdn Bhd is one of them.

Established since 1979, the company used to manufacture solid rubber wood indoor furniture mainly for the US market including Canada. “We used to focus a lot on the these markets. They accounted for up to 50 percent of our total exports. Now with the economic crisis, we have to expand our business and make adjustments to shift our focus to Europe,” said the company’s director, Wicey Tan.

These adjustments include modifying the collections that were previously designed for the US markets. “Our bedroom collections, such as the cabinets and wardrobes, are revised to better suit European tastes, especially for the Scandinavians, Eastern Europeans, Germans and French,” Tan said.

He added, “American and Canadian buyers put more emphasis on price while the Europeans are more demanding in terms of quality”. He also observed that while the Americans’ tastes are more traditional, Europeans generally prefer contemporary designs with clean lines in lighter colours such as oak.

Despite these differences, Tan does not foresee much difficulty in this shift of focus. “We already have some existing European customers whom we have been supplying to and our products are sold worldwide. We can adapt to the change,” Tan said. In fact, he hopes to increase Bowlman’s exports to the region by 25 to 30 percent.

According to Tan, the company has been preparing for this move by attending exhibitions in Europe. “From there, we learn about the market trends and draw inspirations on how improve and develop our designs,” he explained.

Tan is also confident that his company is in good shape and form to meet demands from both the US and Europe: “We have our own material supply and processing plants such as saw mills and kiln-dry facilities. This way, we can have more control over our production costs and quality. This gives us the ability to offer more competitive pricing and better quality control.” Bowlman owns a production site totalling 174,000 sq ft (16,165 sq m) with more than 200 workers.

FITEC Confident Of Export Targets

Kuala Lumpur, Malaysia: According to a report by Bernama, the Furniture Industry Technology Centre Sdn Bhd (FITEC) is confident that Malaysia will be able to achieve its target of RM10 billion in furniture export, even in light of the current economic slowdown.

“People need furniture on a regular basis, whether in their houses, offices or hotels, and it is an ongoing business. Moreover, amid the economic uncertainties, people are still willing to spend money on good designs,” said Sarimah Mohamad Sabudin, FITEC’s CEO after launching the Women’s Furniture Day 2009. Sarimah also said that demand for Malaysian furniture in Europe and Middle East was growing fast.

Malaysia Furniture Makers Want Reduction In Worker Levies

Johor, Malaysia: According to a report by The Star, furniture makers have asked the government to rethink the move to double the levy on foreign workers in the industrial sector. They say that it will impact the already struggling furniture industry negatively.

“The government should instead reduce of abolish the levy for foreign workers in the furniture industry if it wanted the sector to sustain growth. We regret to say that the second stimulus package would not boost growth in the furniture industry. In fact, it will hurt it more with the increase in the levy for foreign workers. We understand the government needs to reduce the number of foreign workers in the country but not this way,” said Desmond Tan, President of the Malaysia Furniture Entrepreneur Association (MFEA), commenting on the RM 60 billion (US$16.72 billion) stimulus package announced by Malaysia’s Prime Minister cum Finance Minister Datuk Seri Najib Tun Razak.

Tan said the furniture industry relied heavily on foreign workers, as not many Malaysians were willing to work in the production lines. He also mentioned that the industry exported over RM 8.7 billion worth of products last year and had set a target of RM 10 billion next year. “With the double levy regulation, we cannot reach the target,” said Tan.

Thai Govt Urged To Spur Domestic Consumption

Bangkok, Thailand: The Thai furniture industry has urged the government to spur domestic consumption on the back of facing intense export competition from regional rivals.

Speaking after opening the Thailand International Furniture Fair (TIFF) 2009, commerce minister Porntiva Nakasai said that the Thai government is paying close attention to the furniture industry because of its importance to the economy. The furniture industry in Thailand employs more than 300,000 workers.

In addition, furniture exports contribute billions of baht to Thailand’s GDP annually. In 2008, Thailand exported furniture worth THB 44.78 billion (US$1.26 billion) to its three main markets of Japan, US and the UK. However, in January 2009, the sector saw a decline, exports amounted to just THB 2.41 billion (US$70 million), well down from previous year’s figures in the same period. This is mainly due to the poor performance of the world’s economy.

“The sector’s strategy to boost furniture exports involved penetrating niche market segments such as project contractors, as well as exploring new markets such as China, the UAE, India and Russia. Exporters should also take advantage of free trade agreements, use a variety of materials, maintain a high quality workforce and products and focus on design to thrive,” said Porntiva.

“We expect furniture exports to grow by 35 percent this year. However, manufacturers will encounter fierce competition from rivals in China, Vietnam and Malaysia, where furniture can be produced more cheaply. Therefore, the government should act to increase domestic consumption,” said Arak Suksawasdi, President of the Thai Furniture Industry Association.

Malaysia Furniture Makers Resilient Despite Slump

Kuala Lumpur, Malaysia: The country’s furniture producers showed surprising resilience in 2008. Growing two percent despite the economic challenges on the back of the American housing market slump, the industry posted sales of RM 8.72 billion in 2008 (US$2.4 billion) – according to a report by The Insider.

However, 2009 will be tougher for the industries as more economies slow down around the world. January’s manufacturing statistics indicates that the year will be a real challenge: furniture output is down by 37 percent.

China is already feeling the pressure due to the flagging demand from the US – China is the world’s largest furniture exporter. Some of the Chinese furniture plants are reportedly running at half capacity.

Orders for Malaysia-made furniture have fallen as well: exports are expected to decrease by 10 to 20 percent this year. Merlyn Kasimir, Chairman of the Malaysian Furniture Promotion Council said, “This is reasonable, considering the economic situation.” Luckily, Malaysian furniture makers have been diversifying their markets prior to the economic onslaught. As a result, Malaysia has been less affected – its reliance on its main market, the US has gradually been reduced to 20 percent.

Some exhibitors at the recent Malaysia International Furniture Fair 2009 (MIFF) also expressed similar sentiments, saying that the US was not a major market for them anymore. “Business is down but it’s a question of how much. The UK and US are not export markets for our office furniture, which is sold to more than 10 countries. Africa holds a lot of potential,” said Thon Pang Kai, an Export Executive for Willy Steel.

Malaysia Wants More Exports To India

Kuala Lumpur, Malaysia: Malaysian wood manufacturers have identified a potential market for their products – India. According to a report by Bernama, the stable market that India provides is attractive for Malaysian wood exporters.
With demand from major economies like Japan and the US falling, Malaysian companies such as Kedah-based Consistent Pattern Sdn Bhd – a leading rubberwood producer – is trying to enter the demand-driven Indian market to promote their wares.

“Our major buyer is Japan. We export about 90 percent of our wood to them. But due to the crisis, the market is slowing down and we do only about 60 percent to Japan now and another 20 percent to the US. We are trying new markets like India because India is a large market with growing demand for eco-friendly hardwood,” said Joanne Ng Loo Suan, Marketing Manager for Consistent Pattern.

The company has been exporting about 10 containers monthly of its wood-based products, like furniture parts and components to India. With the shrinking demand from its major buyers, it aims to increase its exports to the Indian sub continent.

“We are looking at increasing to about 30 percent growth in 2009 for the Indian market. The company is trying to establish distributors in each state like Delhi, Mumbai and Chennai to expand our business there,” said Ng

Vietnam-Mid East Trade Over US$2b

Hanoi, Vietnam: Bilateral trade between Vietnam and the Middle East Countries in 2008 has reached US$2.03 billion. This is a 70 percent increase from 2007 figures, as reported by the Vietnam Economic Times.

“In total, Vietnam sent US$1.27 billion of goods to the Middle East countries in 2008, a 82 percent increase from 2007,” said Nguyen Cong Hien, Vice Head of the Market Department of Africa-Western Asia-South Asia of Vietnam’s Ministry of Industry and Trade.

Vietnam's major export earners to the Middle East countries include seafood, coffee, pepper, cashew, computers, electronic components, rubber, and wood furniture while it imports mainly oil and gas, petrochemical products, fertilizers and iron and steel from the oil-rich region.

The significant growth in trade between the two sides in the past two years was attributed to the shifting trade and business activities of the Middle East countries to countries in Asia, including Vietnam.

The Ministry has set out an action plan, its target is to increase the country’s bilateral trade with the Middle East region to US$3.1 billion by 2010 and to US$9.6 billion by 2015