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

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ITC has already collaborated with all of them in analyzing the global furniture industries and trade. In addition, some of WTO’s agreements are relevant to the sector, and deserve attention in the latter parts of this study. More specifically, the following essential references of ITC can be pointed: • Project Tropical Timber Products: Development of Further Processing in ITTO Producer Countries produced a joint ITTO-ITC publication on the same title in 2002. This is a global (29 tropical countries) assessment of the current state of the further processed wood products industry and its export trends in 1989-1998. • Conclusions: The study assesses the 29 ITTO producer countries in terms of their participation in the international trade of value-added wood products, their competitiveness in the marketplace and the future opportunities in major markets. It explains how the countries could find their competitive advantages and pull out the suitable industrial manufacturing strategies that match their opportunities. The broad product range covered (furniture, windows, doors, flooring, other joinery and mouldings), contributes to the widening of the knowledge of further processing of tropical wood both in the supplier countries and consumer countries. • In 2005, the International Wooden Furniture Markets study report was published, again as a joint venture between ITTO and ITC. This was a sequel to the 1990 publication Wooden Household Furniture: A Study of Major Markets. • Conclusions: The report provides detailed market information on the world’s eight leading furniture markets: the United States, Japan, Germany, the United Kingdom, France, Canada, China and Belgium in addition to the Netherlands and Luxembourg and the major furniture markets of Spain, Italy, Denmark, Sweden and Egypt. • This report also outlines a strategy for developing the wooden furniture sector in tropical countries. It predicts that the overall balance of furniture-making will move in favour of the southern hemisphere and China, where a green ‘wall of wood’ is maturing in the plantation forests. Remaining natural forests will continue to provide unique raw materials for the finer furniture industry. In order to make full use of the opportunity created by the coming availability of the plantation resources and the high-value niche markets for natural hardwoods, the report suggests what developing countries should do to overcome hurdles such as the changing economics of logistics, low productivity and efficiency, inadequate quality control and management systems, and the often low level of skills. • The value-added processing of wooden furniture in tropical countries will be developed step-by-step based on local conditions. Manufacturers should move from standardised, simple products towards originally designed products with higher value, and ultimately to branded products. It is hoped that this process can be accelerated through concerted local efforts and international partnerships. • With ILO, the ITC collaborated on project development for modernisation of Indonesia’s traditional furniture cluster, and the rubber wood development project. The rubber wood’s prominent role as a new furniture material was strengthened after the report was distributed among about ten leading rubber wood growing countries of the world. Malaysia, however, was pointed out to have an advantage over the others due to consistent support towards rubber wood processing (see later on their success factors). 38 International Trade Centre
• With FAO’s Forest Products and Economics Division, ITC collaborated in a study titled Analysis of Important Factors in Successful Production and Marketing of Plantation Timber Products. It also assessed the furniture industry’s potential for using planted wood species. • Conclusions: The production of large-sized logs from the natural forests of tropical producer countries will continue to decline, particularly in Asia. The primary and further processing industries have already started to adapt their manufacturing methods, technologies and designs accordingly. Smaller-dimension logs will be increasingly used, based on fast-growing plantations (rubber wood, gmelina, acacia, eucalyptus, teak, pine, mahogany) and secondary natural forests. • The establishment of plantation has moved more recently away from government-led programmes into private sector activity. The role of incentives has generally declined, and a healthy macro-economy is thought more frequently to render direct incentives useless after the initial start-up phase. But their role has been crucial in most of the successful plantation programmes up and running today and many countries still apply them for new planting. It is more important to re-orientate incentives for the benefit of farmers and other smallholders, who almost categorically face problems in reaching any value-addition or financial security in their plantation investments. • Most common fast-growing plantation species available for industrial processing suffer from quality handicaps vis-à-vis competitive natural timbers. These call for immediate improvements in wood drying, jointing and edge-gluing technologies, and wood preservation and finishing. Product and market development needs to be focused at engineered and value-added wood products in order to recover the costs of intense primary processing. • When considering plantation woods for specific applications, some key qualities need to be assessed in terms of appearance (colour, grade quality, surface finishing), for engineering (density, strength, stiffness, hardness), and with regard to drying and machining characteristics (planning, moulding, CNC routing, sanding), to name a few. It is essential to apply this information to the whole production process: product design, selection of appropriate materials and tools, selection of most suitable manufacturing methods, and recommendations on intended service (end-uses) and environmental conditions. • CBI and SIPPO are the government import promotion agencies of the Netherlands and Switzerland. In the recent years, CBI has maintained programmes for both wood products and furniture. Both programmes have produced annual market reviews and marketing guides, and some countries have also been enrolled to specific export promotion programmes in practice. The list of eligible countries includes all LDCs (least developed countries) in the world. CBI reports are good sources of down-to-earth, practical tips on how to approach European importers and how to do business with them. They also give well-thought prep-up tasks and things-to-do lists before entering into furniture fairs, sales missions, contract negotiations, etc. This report is a recommended reading for any prospective furniture exporter into Europe. (Contact info in Annex 1) • ITC’s Market Briefs have also covered furniture in the past. These are usually displaying the market size, characteristics and major importers to approach. International Trade Centre 39
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 and 46: At least 70% of the wood used in ma
Page 47: Scope of joint ventures There exist
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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