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

4.2 Obstacles and shortcomings – importers’ opinions
The importers’ views have been collected through the vast network of the international
consultant
4.2.1 Obstacles at country level: Global commonalities
In targeting development policies at SME furniture companies, certain commonalities can be
found among the majority of developing countries. The main issues to be addressed are usually
centred on the following obstacles:
• Access to the international markets tends to be a problem as producers may be
unfavourably located; far from the main consumption centres and suffer from costly
transportation.
• Access to raw materials at competitive costs becomes a problem as SMEs are at a
disadvantage because of their small size. This can become a hindrance to organising the
flow of raw materials from domestic, non-transparent timber markets controlled by
various intermediaries, and often leads to timber shortages just when exports are
growing.
• Access to knowledge and technology is a major problem area. SMEs tend to fall
behind because of their strong reliance on traditions: e.g. they may be using high-value
timber for secondary uses, simply through force of habit and thus gain revenues far
below the timber’s real potential.
• Access to capital is difficult to find at competitive rates because domestic bank
finance is scarce, interest rates are generally high and collateral requirements are strict.
• Access to designers is limited, therefore the exporters rely on simply selling items “as
they are”, copying new models or producing according to the buyer’s designs.
• There are shortages of skilled labour and in-house training (apprenticeships, on-thejob
training, etc.) is usually considered too much of a burden.
• Managerial skills are poor and opportunities to develop them outside the SME
companies are rare.
• Lack of intellectual rights protection is a vital element in the encouragement of
creative design activities. If authorities fail to put such a protection scheme into a
widespread use within the industry, it hinders the development of original designs within
the industry.
A Pakistani view expressed by APFEA, etc. is mirroring the above-mentioned international
experience:
• Support to market promotion is inconsistent. Participation in trade fairs tends to be
supported occasionally by the Export Promotion Board, but no long-term roadmap for
winning systematically new markets is developed. This makes the visits to a couple of
fairs just a routine promotional trip, where only initial contacts are made with
prospective, non-committed buyers. The crucial follow-up in the form of a proper sales
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