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

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No training institutes and centres are set up All of the manufacturers said that no training centres were available. One or two centres are working, but no effective services are being offered by them. The manufacturers stress the importance of having such institutes in the country. The furniture industry is in dire need of trained and creative individuals. No financial incentives given by the government The government is providing no finance facilities. For the few facilities available, the process of documentation is discouragingly cumbersome. The government should also introduce new subsidies as the old rebate and subsidy facility has ended. The MoC freight subsidy is still there, but it is not generalised – it is only for specific destinations. Furniture is a high-value item, therefore freight rates are also high. Thus, for an importer it tends to be expensive. A supportive regulatory subsidy should be introduced. New investors are not coming in because of the high cost of setting up business. Government takes no steps to promote exports of furniture No longer-term steps are taken by the Government. TDAP and SMEDA are working on it, but no concrete results have come forward. They gave examples of exhibitions and seminars organised by TDAP, but they are not at all effective. By comparison, the following describes how the Egyptian furniture industry delegation takes a long-term view on attending the Las Vegas furniture show. (Furniture Today e-daily, 27.07.2006.) Box 2.9 Egyptian furniture screens Las Vegas show The promoter of an Egyptian furniture show brought industry representatives to the July show here to assess participation in future events. Expolink, which also promotes the Furnex show in Cairo, hosted the visit to the Las Vegas show July 23-27 to help companies learn more about the event and the opportunities to lease space for the July 2007 show. Expolink said the same group also plans a similar study tour of the High Point show in North Carolina. Officials from as many as 25 Egyptian manufacturers came along, including manufacturers of residential case goods and upholstery, as well as kitchen, office and other contract furniture. Some of the companies already plan to show in Las Vegas in 2007, so they took a preview of the venue An Egypt-based upholstery and case goods manufacturer said the trip helped his company and others learn about the US market and how American producers are serving the needs of retailers and consumers. It distributed CD catalogues to show potential customers the high quality and craftsmanship that the Egyptian companies can produce in furniture, gifts and accessories One Egyptian company already operated a stand in Las Vegas with upholstery and occasional furniture. As a first time exhibitor, they had a line of mostly traditional sofas, chairs, consoles and chests. They hoped to attract US wholesalers as well as containerdirect customers. The company now sells about 15% of its line to the United States but hopes to grow that business, said the company’s representative Source: Furniture Today e- daily (2006 editions) 36 International Trade Centre
Scope of joint ventures There exists a definite scope for Joint Ventures. When foreign companies will share their expertise and resources with Pakistani companies, the quality of furniture would improve and exports would experience a major boost. Total export product trend needs to be changed. Standard contracting furniture would need to be produced. Dubai, Abu Dhabi, Doha, etc. have a billion dollar investment to build thousands of villas and housing schemes popping up. Wood is imported from China, Malaysia and Europe. If a container goes from Karachi, the shipment would reach in two days (US$200 freight). From China shipment reaches in twenty days and freight is US$1,000-1,200. Pakistan has a competitive advantage, but it doesn’t have industry. To produce standard furniture, Pakistan can have joint ventures from the Middle East for home as well as office furniture. The government will have to create a favourable environment. The concept of “Furniture village” would be a major investment for foreign investor to come in. The labour cost is low. The government should give land, utility facility, etc. Innovation New designs are being copied and used but the latest technology is not being used. Others think that there is a lot of latent creativity, but due to lack of resources they can’t make use of it. There is a dire need of new designs in order to survive in the competitive trading system. Government rules and regulations The majority thinks that no favourable policies exist for them. The severe inspection that is done by the Customs by tearing down and breaking furniture should be stopped. Designs are copied; there should be restriction on this as well. Labour law needs to be improved. Different government departments visit the manufacture to make inspections. The government should work under one-window operation. Labour rights should be safeguarded. With training centres, proper general training should also be given to them. A lot of international donor agencies would come forward and start giving donations. 2.2 An overview of existing studies, strategies and policy papers 2.2.1 Overview of existing studies This section records the experience of ITC and sister organisations of the United Nations on furniture sector development. Among the international organisations, the furniture industry falls into the agenda of, e.g.: • UNIDO (United Nations Industrial Development Organisation), • ILO (International Labour Organisation), • ITTO (International Tropical Timber Organisation), • FAO (Food and Agricultural Organisation of the United Nations), and • Economic Commission for Europe (ECE): Timber Committee. International Trade Centre 37
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 and 34: Price The prices of local machinery
Page 35 and 36: Indonesia has also announced a ban
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: At least 70% of the wood used in ma
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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