The Furniture Sector in Pakistan: Export performance and ... - TRTA i

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5.3 Export services as they should be – expressed views • They should voice their following interests to the government - Reduce loan rates - Control quality of raw material, so that no diseased wood is used - New trees to be planted - Transportation rates issue solved - Government to give incentives to exporters to reduce the trend of using Chinese material which is selling at cheaper price and better quality - Tax rebates and incentives - Recognition as an industry - Use of latest technology • Furniture exhibitions and fairs to be organised at international and local levels on regular basis in America, UK, Germany and Dubai. Every exporter should take part in it. The government should make a committee. In 3–4 months make all necessary arrangements. Booking should be done before time. These exhibitions should be organised every year. Warehouses should be built in these countries. It will cost PKR 4 – 5 million. Funds required in total would be PKR 10 million. In Exhibitions space for setting up stall should be increased. Transportation charges of the furniture to the country where exhibition is to be held should be taken care by EPB/TDAP. • Make efforts for promotion of companies, so that companies are identified at international level and the perception of foreign buyers of Pakistani furniture is changed. • Foreign delegates should be invited to Pakistan to share their knowledge with local people. • Set up training institutes where knowledge on latest skills is imparted with the help of the government, Chamber of Commerce and Industries and APFEA. Duration of the plan would be one year. Cost of this proposal would be approximately PKR 2 billion and total funds required would be PKR 5 billion. • An implementation cell should be set up, which should make efforts to get contacts numbers and address of foreign importers and then they should be passed on to the exporters to promote trade. • Consultancy on modernising techniques. EPB/TDAP and Ministry of Production should come forward. These services should be provided two days in a week. • Lectures on world competition and market status 5.4 Other export services – Malaysia as example Export services being put into offer for Malaysia’s furniture sector deserve to be presented here. Pakistan can draw conclusions about which similar services would assist its furniture exports in a maximal way. 92 International Trade Centre
The lessons learnt here could be repeated elsewhere in other developing nations where the furniture industry has good growth potential. Major drawback is usually the sustained flow of wood raw material. Industrial master plans In the early 1980’s, Malaysia was a large exporter of commodities, primarily sawn timber and plywood. In realising the potential earnings of the wood-based sector, the government embarked on an industrialisation strategy, which focused on the export trade and later on value-added products. The 1 st industrial master plan (1986 – 95) The First Industrial Master Plan (1986 – 1995) was aimed at enhancing down-stream wood processing activities. The government provided numerous fiscal incentives and policy instruments aimed at spurring such activities, particularly amongst upstream activity players. Annual growth rate was in the range of 40%. The 2 nd . industrial master plan (1996 – 2005) The export oriented growth continued into the Second Industrial Master Plan, but the focus had shifted towards manufacturing of greater value added furniture. The third industrial master plan is currently in the making Against the need to create a skilled local workforce, the government established the Human Resource Development Fund (HRDF) in 1993 and subsequently the Human Resource Development Council (HRDC). Both these initiatives were aimed at producing skilful local workforce for the furniture industry. Employers were required to make a mandatory contribution of 1% from the payroll to the fund, which is then used for training of the workforce. Nevertheless, the effectiveness of the development programme has not been up to the mark: Reasons are the reluctance of employers to send their workers for training due to limited contractual obligation and the non-relevance of the training programmes offered. Export restrictions on sawn wood The government policies, such as imposition of export levies on rubber wood sawn timber and the limited export volume quota imposed, forced many upstream players to move into downstream processing. Further, financial resources were made available to new entrants to encourage the expansion of the industry. It must be noted that in Malaysia, the banking sector was imposed a minimum lending quota by the Central Bank, which should be made available to the furniture industry on an annual basis. Government policies The role of the government in the development of the Malaysian furniture industry is very significant and cannot be downplayed. Conducive political climate is a boost for investors and the manufacturing sector as a whole. International Trade Centre 93
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The Furniture Sector in Pakistan
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Acknowledgements The report was pre
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Abbreviations AFTA AHEC AKTRIN APFE
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Table of contents Acknowledgements
Page 9 and 10:
Box 3.1 Multilateral discipline of
Page 11 and 12:
Executive summary This study sets t
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the extent possible maintain or imp
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1 Background and objectives 1.1 EC
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2 Furniture sector in Pakistan 2.1
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On the buyer’s side, there are gl
Page 21 and 22:
According to the websites of import
Page 23 and 24:
Global demand for furniture in main
Page 25 and 26:
suppliers, both domestic and other
Page 27 and 28:
Table 2.3 Pakistani furniture expor
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Figure 2.4 Distribution structure f
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freight rates have increased and do
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Price The prices of local machinery
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Indonesia has also announced a ban
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industry itself should support effo
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various counterparts, the supplier
Page 41 and 42:
Box 2.7 UK Timber Trade Federation
Page 43 and 44:
Figure 2.5 Simplified example on ch
Page 45 and 46:
At least 70% of the wood used in ma
Page 47 and 48:
Scope of joint ventures There exist
Page 49 and 50:
• With FAO’s Forest Products an
Page 51 and 52: The contact information of many of
Page 53 and 54: Box 2.10 USAID initiative in the fu
Page 55 and 56: Opportunities Major opportunities m
Page 57 and 58: pressure on the price. There appear
Page 59 and 60: Pakistan does not export this furni
Page 61 and 62: 3.1.3 Functional scope The function
Page 63 and 64: Current status of efforts to libera
Page 65 and 66: 3.2.2 Information flow-upwards, i.e
Page 67 and 68: Commission (EC/EU) has established
Page 69 and 70: Figure 3.3 Relevant intensity of WT
Page 71 and 72: Box 3.2 Regional Trade Agreements (
Page 73 and 74: Trade Related Aspects of Intellectu
Page 75 and 76: Agreement on the application of san
Page 77 and 78: country or materially retards the e
Page 79 and 80: Relevance of the furniture sector T
Page 81 and 82: 3.4.2 Other countries’ access to
Page 83 and 84: Table 3.2 Top 10 buyers of the Paki
Page 85 and 86: Arabian market. Here again, there i
Page 87 and 88: • Material from China is being us
Page 89 and 90: 4.2 Obstacles and shortcomings - im
Page 91 and 92: Raw material recovery Raw material
Page 93 and 94: • Consistent policy for supportin
Page 95 and 96: A short-term but maybe a costly mea
Page 97 and 98: 5 Export services in Pakistan 5.1 E
Page 99 and 100: 5.1.3 Federation of Pakistan Chambe
Page 101: • Pakistan International Freight
Page 105 and 106: 6 Conclusion and recommendations 6.
Page 107 and 108: 6.2 Critical success factors • A
Page 109 and 110: 6.4 Global value chains 6.4.1 Poten
Page 111 and 112: Benefits All timber tends to be air
Page 113 and 114: • Optimise cutting; • Calculati
Page 115 and 116: 6.6.5 If we had US$100,000: A techn
Page 117 and 118: • To modernise such a laboratory,
Page 119 and 120: Annexes Annex A — Sources of info
Page 121 and 122: • Federmobili information on the
Page 123 and 124: • National Home Furnishings Assoc
Page 125 and 126: International Trade Centre 115
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