Visitors look at furniture on display at the 2013 International Furniture and Craft Fair Indonesia (Iffina) held at the JIExpo in Kemayoran, Central Jakarta, on Monday. The Industry Ministry says furniture exports are likely to increase by 10 percent this year on the back of a market rebound in traditional markets like the US and Europe, as well as growing demand from emerging markets such as South America and Africa. (Antara/Fanny Octavianus)
Indonesia expects to see furniture exports surge by up to 10 percent to US$2.15 billion this year, mainly on the back of stable demand in key markets, continuing the recovery already seen in the past year, a trade official says.
The Trade Ministry’s director general for national export development, Gusmardi Bustami, said that a stronger demand for local furniture was still expected to come from the two biggest shipment destinations, the United States (US) and the European Union (EU).
“Demand will likely be driven by the replacement of furniture products amid stagnant growth in the housing and hotel industry in the US, for instance,” Gusmardi said on Monday after the opening ceremony of the sixth International Furniture and Craft Fair Indonesia (Iffina) at the Jakarta International Expo compound in Kemayoran, Central Jakarta.
Last year, furniture exports climbed by 10.36 percent to $1.95 billion as demand rebounded in the US and European markets, such as in Germany and the Netherlands, after a 10.16 percent slump in 2011 amid global economic downturn.
Exports to the US were valued at $599.3 billion last year, up 12.9 percent from a year earlier, while shipments to Germany and the Netherlands settled at $185.78 billion and $217.05 billion, up 102.13 percent and 127.13 percent respectively.
To help support this year’s target, the government would also encourage exporters to seek out abundant opportunities in new markets, particularly in Asia, including China, India and Pakistan, Gusmardi said.
“Indonesia can fulfill the demand for quality furniture in China as its population correlates to stronger purchasing power,” he said, adding that local products could also find ways into India and Pakistan as they would likely suit consumer tastes in both markets.
Apart from this, a large number of potential orders for Indonesian furniture could also stem from emerging economies, to which local exporters are orienting their market diversification moves, such as South America and Africa, according to Gusmardi.
Speaking after the event, Industry Minister MS Hidayat said that to push up export values considerably, the government would continue its support for local furniture manufacturers to ship finished products instead of exporting raw materials.
The Trade Ministry has totally banned exports of raw rattan since 2011 as part of its efforts to develop the downstream industry and produce value-added furniture domestically, which in turn will raise export figures significantly.
Exports of rattan furniture rose by 31.23 percent to $210.38 billion last year, after growing by only 3.75 percent to $160.31 billion in 2011.
“We have an absolute advantage over other countries, which is our tropical wood. We only need innovative designs to make our furniture marketable in the global market,” Hidayat said.
Separately, the Indonesian Furniture Entrepreneurs Association’s (Asmindo) Ambar Tjahjono voiced his optimism that exporters could meet the government’s export target this year, buoyed by the improved demand in key markets and new purchase orders from new markets, such as India.
“We are seeing enthusiasm from buyers as reflected by the figure of buyers that rose by around 30 percent to 4,000 this year,” he said, citing that buyers from India had tripled to 150 during the annual expo.
Ambar said local exporters would work on non-traditional markets such as South America and Africa, but remained focused on existing and prospective markets in Asia, such as China, Malaysia and South Korea.
The four-day expo, featuring 525 domestic as well as overseas exhibitors, aims to generate $400 million in transactions, up by 25 percent from last year, as it draws worldwide visitors.
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Topic: Government seeks 10% increase in furniture exports to $2.15b (Read 2118 times)