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

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concept of training the workforce how to improve their efficiency. Skill development centres should be set up in all regions of the country to counter the situation. Price According to the exporters of Chiniot, Gujrat and Peshawar, labour rates are reasonable. While in Rawalpindi, Gujranwala, Karachi and Lahore, the rates are high. 2.1.5 Growth in the sector In 2002-04, exports increased by 30 to 40%, but in the following years, their growth has decreased despite an increase in the in-country demand. While the global furniture industry has increased by 10%, the Pakistani industry’s growth rate is more than 10%. 2.1.6 Reasons for fluctuations in imports/exports Reasons for fluctuations in exports At least 50% of the exporters felt that the exports of furniture have increased in the last five years due to various reasons such as companies making efforts on their own, the role of TDAP, the increase in dollar rates and the demand of handicrafts and traditional furniture increasing in other countries. Nonetheless, the rest of exporters think that exports have decreased because of: All Pakistan Furniture Exporters Association (APFEA) not being registered, no association working for the promotion of exports, strict customs checking (breaking of the inspected furniture), no modern technology being used, Sheesham getting expensive and extinct and the rising transportation rates. In certain situations, transportation rates increase tremendously in the presence of a very poor infrastructure. Reasons for fluctuations in imports Imports have increased in the last five years, especially from China, due to Sheesham getting extinct locally, import duty decreasing and the prices of imported materials decreasing. Chinese competition in the domestic market is very strong owing to the much lower prices they can offer. 2.1.7 Price structure of the industry Price structure in the last 5 years of local/imported components According to the exporters, prices have showed an upward trend in the last five years. The prices of imported components have also showed an increase. With regard to valuable hardwood timbers that could replace Sheesham, the future prices are expected to climb and availability is not getting any better. Recent news indicates more concerns about the tropical timber business in Asia. Prices for Southeast Asian timber products continue to soar to new highs driven by acute shortages, higher power and fuel costs and dearer interest rates. These are coupled with recent actions of Malaysia to stop the issuance or renewal of licences for timber concessions. 24 International Trade Centre
Indonesia has also announced a ban on the use of natural trees for wood processing by 2014. Additionally, the export ban on logs and rough sawn wood has brought about an additional level of bureaucracy that is hindering Indonesian exports. A stabilising factor is that buyers are increasingly seeking cheaper alternative supply sources. (ITTO Market Information Service, 2006) Price structure in the last 5 years of export/local sales More than 50% of the exporters say that the prices of local sales have increased. While 23% say they decreased and another 23% say they are stable. 43% of exporters say export sales increased, whereas 36% say they stayed stable. Exports have increased considerably in the last five years. The higher end products i.e. products with carvings, better quality of material used, etc. fetched better prices. Domestic home furniture is being exported more than office furniture. It is fetching better prices for it is being made according to the requirements of the customer. 2.1.8 Annual turnover Estimated annual turnover of industry is US$160 million Manufacturers account for 95% of the total market, while the remaining 5% are manufacturerscum-exporters. Top 10 to 15 furniture companies account for 80% of exports. The main furniture regions of Pakistan are: Peshawar, Gujrat, Chiniot, Lahore and Karachi. According to the order of exporters’ size, Karachi comes first followed by Lahore and Peshawar, while Chiniot and Gujrat have good concentration of manufacturers and traders. Large-sized companies are mostly located in Lahore and Gujrat, while small- to medium-sized companies are situated in Peshawar, Chiniot and Gujrat. 2.1.9 Rules and regulations affecting the sector Furniture standards The objective of standardisation is to ensure that all furniture available in the market is safe to use and of solid and strong construction. Therefore, standardisation is helpful in facilitating market conformance, including from developing countries. However, there is also a risk that standards may become a constraint for market access or put small producers at a disadvantage when the requirements are particularly difficult to meet. Manufacturers normally use the standards voluntarily in their product development, process control and marketing. Having a common language on test methods, dimensions, safety and strength characteristics is considered a major benefit. There are over 140 furniture-related standards and labelling requirements in the United States and Canada alone. Most standards are voluntary but some are regulated by the state or federal laws. One example of the toughening state-level health standards is in the text box below. International Trade Centre 25
Page 1 and 2: The Furniture Sector in Pakistan
Page 3 and 4: Acknowledgements The report was pre
Page 5 and 6: Abbreviations AFTA AHEC AKTRIN APFE
Page 7 and 8: Table of contents Acknowledgements
Page 9 and 10: Box 3.1 Multilateral discipline of
Page 11 and 12: Executive summary This study sets t
Page 13 and 14: the extent possible maintain or imp
Page 15 and 16: 1 Background and objectives 1.1 EC
Page 17 and 18: 2 Furniture sector in Pakistan 2.1
Page 19 and 20: 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
Page 29 and 30: Figure 2.4 Distribution structure f
Page 31 and 32: freight rates have increased and do
Page 33: Price The prices of local machinery
Page 37 and 38: industry itself should support effo
Page 39 and 40: 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 and 102:
• Pakistan International Freight
Page 103 and 104:
The lessons learnt here could be re
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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