Bangladeshi Furniture exports grew 30.29 %

Furniture exports grew 30.29 percent to Tk 154 crore in the nine months through March due to an increase in demand for wooden and crafted furniture in the United States, Japan and European countries, industry insiders said.

Visitors are seen at a stall at a three-day furniture and interior decor exposition at Ruposhi Bangla Hotel in Dhaka 27.04.2012

The sector earned Tk 204 crore from furniture exports in fiscal 2010-2011, up from nearly Tk 197 crore in the previous year, according to data from Bangladesh Furniture Exporters Association (BFEA).

“The main reason behind the export growth is that we have low-cost labour, which lowers our costs of production,” said KM Akhteruzzaman, chairman of Bangladesh BFEA. “So we can offer high-quality products at competitive prices.”

Moreover, there is increasing demand for hand-carved wooden furniture in the US, UAE, Saudi Arabia and Qatar. They prefer furniture designs that follow Victorian styles, hand-carved and heavy furniture, which is the dominant production style of carpenters in Bangladesh, he said.

“Our local carpenters have excelled in carving on wood, especially teak.”

Furniture is one of the most rapidly growing sectors in Bangladesh constituting approximately 85,000 enterprises and carpentry households across the country. Annual growth in terms of turnover is around 19 percent a year.

At present, the size of local furniture market stands at Tk 10,000-12,000 crore a year, according to BFEA.

The industry currently employs about 30 lakh people directly. It is one of the most labour intensive industries in Bangladesh, having a capability of absorbing even unskilled labourers.

Previously, Bangladesh only exported wooden furniture to neighbouring countries such as India and Nepal. In the last three years, the volume of furniture export, both wooden and steel, increased al lot.

Akhteruzzaman said the furniture market could be further expanded, both at home and abroad, by blending technology, skilled manpower, quality raw materials and designs.

Seventeen members of BFEA export furniture. Otobi, Akhtar, Hatil, Brothers, Partex, Navana, and Furnitec are the major players. Apart from these member companies, there are some more companies that export furniture to the neighbouring countries.

However, furniture makers and exporters now face the adverse impacts of high duties on the import of raw materials, which is holding them back from expanding the industry further.

In addition, declining sources of the local supply of wood and a lack of technical expertise are forcing the sector to play a trivial role in the national economy, said industry insiders.

“We need support from the government to take the sector to a higher level, which would help us contribute more to the economy,” said Ferdous Ahmed, managing director of Furnitec, a major player in the local market. “We now have to pay over 90 percent in duties on the import of raw materials, which ultimately increases production costs. This eventually reduces the competitiveness of our products than that of our regional competitors.”

“We often face difficulties in meeting the buyers' price targets, although our exports have grown manifold in recent years,” added Ahmed, also the secretary general of BFEA.

Industry insiders said most of the raw materials for wooden furniture, including teak and adhesive and painting products, have to be imported from Malaysia, Canada and China.

In addition, the sector also suffers from a lack of technical knowledge, which makes the sector dependent on traditional methods that consume time.

“The government should take the necessary steps to help the sector grow fast. Most small entrepreneurs suffer from a lack of capital, while the bank interest rate is still too high,” said Akhteruzzaman, also the managing director of Akhtar Furnishers Ltd.