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

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• Create and maintain a roster of specialised consultants on wooden furniture manufacturing, trade and design available for the industry from abroad. • Widen the existing design institute network out of Gujrat, Peshawar and Karachi. • Arrange direct technical assistance to enterprises to capture the emerging export opportunities. This could include market orientation tours, design networks, workshops, development of business skills (including negotiation skills with big buyers), etc. • Facilitate systematically efforts by the industry to know its customers and have direct access to them rather than continuing reliance on (too many) intermediaries. An internationally targeted furniture exhibition and joint export campaigns could be part of such an effort if the country has a critical mass of suppliers. • Initiate the building of Permanent Exhibition Halls to key furniture clusters inside Pakistan or in big markets like the UAE for more efficient showcasing for visiting buyers. The concept should combine furniture with matching accessories from Pakistan (exhibit an interior style, rather than just furniture). 6.1.3 Relevant government authorities • Stem the widely suspected “insider” wood exports of forestry officials. • Award furniture industry with policy priority because of multiple economic, social and resource valuation benefits (high value added, high employment, and potential location in disadvantaged areas). • Improve the existing public domain databases related to furniture industry (on markets, products, standards). • Help furniture industries to respond to emerging issues, such as changes in wood sources, certification and labelling requirements for exports, and non-tariff barriers to trade (overcome trade impediments). • Provide support for the sector by means of an enabling policy environment, i.e. investment incentives, trade promotion activities, freight subsidy, and temporary export restriction of raw materials (logs, sawn timber), which can spur the growth of an export oriented furniture industry. • Create an export levy collection system on logs and sawn timber, use funds for financing value-added processing investments by furniture industry, or improve wood planting and forest management. • Channel public funding into common support services (training, design, investment support, tool maintenance, etc.), with the aim of rationalising the manufacturing base and making it competitive in the long run. • Promote foreign investment as means to boost technology transfer and export capability. • Allocate industrial zones or premises that have been left idle to the furniture industry. These recommendations have not yet been taken to the level where responsibilities, actors, costs and timing would be explicit. This needs more analysis still. 96 International Trade Centre
6.2 Critical success factors • A focused furniture sector strategy would help in allocating resources to where success can be reached. • Pakistan will not be competitive in mass furniture segments. Authenticity and material knowledge should be made to work for the competitiveness of “niche” or “ethnic” furniture for the higher end of the market. Good example: the Philippines. • Good value for price, timely deliveries and proper after-sales service are needed for keeping competitive at the special niches like antique/traditional ethnic furniture markets. • New furniture collections will have to be created at shorter intervals in order to keep pace with market opportunities. • Creating original designs and attractive branding are necessary for moving to higher price points. Design should provide real added value to the product. Brand should be the flag to catch the attention of buyers. • Avoid using wood raw material that comes from illegal or unsustainable sources, as products thereof are subject to trade barriers and retailer resistance. The following social safeguards can be added here • Avoid the reputation of inferior social conditions and child labour (not really an issue due to strictly regulated labour rules in Pakistan). • Refer to the ILO basic working condition convention on occupational health and safety measures as a guideline. As far as the social or labour conditions are concerned, no buyer’s local code of conduct can be imposed on a developing country producer as a mandatory measure. No such mechanism exists by international law. On the other hand, many of buyers’ groups and large retailers set similar “voluntary” agreements on a bilateral basis: their main interest is, however, not to become under the stigma of retailing “sweat-shop” products. 6.3 Elements of success Pakistan should look at other successful role models when figuring out a certain set of success elements for developing the furniture industry and trade. Peninsular Malaysia is one of the world’s leading exporters of furniture from the tropical region, greatly thanks to its success in rubber wood development. Important lessons could be learned from the Malaysian experience, even though success factors cannot be repeated as such. Even in Malaysia this has not been the case in Sarawak and Sabah, which have not yet joined the Peninsula’s success story in adding value to their timber. One disclaimer is, however, that even Malaysia has been over-using its domestic wood resources in the past. Easy money was made by exporting logs and sawn wood to the big Asian markets. Only the last ten years have raised the country to the main league of furniture exporters. International Trade Centre 97
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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
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Box 3.1 Multilateral discipline of
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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
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According to the websites of import
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Global demand for furniture in main
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suppliers, both domestic and other
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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
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Box 2.7 UK Timber Trade Federation
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Figure 2.5 Simplified example on ch
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At least 70% of the wood used in ma
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Scope of joint ventures There exist
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• 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 and 102: • Pakistan International Freight
Page 103 and 104: The lessons learnt here could be re
Page 105: 6 Conclusion and recommendations 6.
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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