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

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There are some specialised consultancy companies who publish regular market information on furniture. Perhaps the best known among them is the Italian CSIL (Centro Studi Industria Leggera). Their reports are sold on a multi-client basis and they are regularly updated. Global, regional and country-specific studies are put for sale. CSIL is Europe’s leading furniture research institute, and the Centre produces a free newsletter on the furniture industry and markets worldwide, called “World Furniture online”. CSIL also produces a wide variety of furniture industry market reports that could be useful for the Pakistani furniture industry. The particular strength of CSIL reports is in understanding the whole furniture trade and distribution system in each country. The most recent report “World Furniture Outlook 2006/2007” is out right now. ITC could make it available for the Pakistani furniture industry to update the global outlook presented in this report. In the United States, Furniture Today publishes periodical market surveys and furniture trend and style data on the daily online magazine. The contents are rarely containing any detailed statistics or precise market research data. Mainly qualitative analysis is available from Furniture Today. It is useful for those who wish to attend in the US major furniture fairs, because the web-magazine provides useful information on pre-fair events and after-fair followups. Some useful customer studies and supplier listings are provided on an annual basis (e.g. top-retailers, top-manufacturers, etc.). Special themes are explored like bedroom, kitchen furniture, or children’s furniture. Generic consumer behaviour information and surveys on spending in furniture is also a feature in Furniture Today. Good retail contact networks can be established through this channel. AKTRIN Furniture Information Centre is a US-based consulting firm exclusively dedicated to the forestry, furniture, and other secondary processed wood industries. The company maintains offices in the USA, Canada, Germany and Mexico. Their consulting services are offered by a subsidiary company: AKTRIN-Dossenbach Associates. Services range from market research to engineering and technical advice. Over 100 market research reports have been published by AKTRIN. Freedonia Group, Inc. (USA) provides market and industry studies into 18 industry segments, including furniture and fixtures. Freedonia Focus reports are market and productoriented business trend-tracking reports, while Freedonia Industry Studies look more broadly at the industry outlook. Datamonitor is a multi-sector supplier of market survey data, also including furniture and home furnishings. It is headquartered in London, but it operates also in New York, Frankfurt and Hong Kong. Industry panels and consumer interviews are their primary mechanisms to collect data. Market segmentation, prices and competition aspects are also analysed in Datamonitor’s reports. Some other well-known names in the furniture markets research business are: • Furniture Industry Research Association (FIRA) in the UK • International Furniture Research Group (IFRG), Malaysia/international • AMA Research in the UK • Schuler and Partner (HOMAG) in Germany • Titze Unternehmensberatung GmbH in Germany • URS Forestry, Australia 40 International Trade Centre
The contact information of many of these sources is given in Annex 1: Sources of Information and Useful Websites. The following chapters are drawn from the previous work undertaken by ITC sector work on Wood Products and Furniture, and from selected literature and studies compiled for this project. Some selected key issues from reference literature are presented here to support this report: 2.2.2 About clustering and networking • The international market outlook studies indicate that wooden household furniture fashions will remain volatile: what is “in” this year may vanish the next year. The basic problem is that while investments should be planned long-term, furniture markets and fashions live on a faster lane. New collections will have to be created at shorter intervals in order to keep pace with the market’s tastes. This essentially calls for the flexibility of production, which can be best achieved through networking among firms. • The world’s wooden furniture manufacturing can demonstrate many types of successful networks and clusters. Most of the eminent exporter countries to the international markets have undergone an evolution of their own in organising a competitive national furniture-manufacturing base (e.g. Italy, Germany, Denmark, Brazil, Malaysia, etc.). • Approaches and practical industrial development patterns are varied, and simply mimicking an existing structure in another place is not enough. This is why some industry restructuring and relocation into furniture zones and “imposed clusters” have not borne fruit. Organic growth and subtle political support mechanisms appear to have enabled some of the leading clusters to become sustainable and truly beneficial to the industry as a whole. A dynamic industry is always required to inhabit such clusters. Furniture clusters have found widespread acceptance in almost every major furniture exporting country. Nevertheless, there is a lot of differentiation in their basic philosophy to suit local conditions. Table 3.3 below illustrates the main differences between the furniture clusters in Italy, Denmark, Taiwan and Malaysia. Table 2.4 Comparison of furniture clusters Criteria Italy Denmark Taiwan Malaysia Total employees < 10 < 15 < 30 < 50 Skill level High High Multi-Skilled Medium to Low Product mix Low Low Low Medium to High Technology Medium Medium Medium to Low High Investment Low Low Medium High Supply flexibility High High High Low Geographical proximity Good Good Good Good Supporting industries Good Good Good Poor Government intervention Low Low Low High Supporting services Good Good Good Medium Marketing expertise Low Low Medium to Low High International Trade Centre 41
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 and 48: Scope of joint ventures There exist
Page 49: • With FAO’s Forest Products an
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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