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

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mission or attendance in the next important venue is usually missed due to lack of funds and commitment to long-term presence. • Valuable Sheesham wood is becoming scarce and difficult to obtain. It is much preferred for its beautiful colour and grain, but much sought for by rogue middlemen and cut-to-size processors for exports. (But the Furniture Survey respondents did not unanimously share this opinion.) A viral disease and over-logging is decimating the resource. Public premises order Sheesham wood for secondary purposes (school desks, etc.). Optimisation of its true value would be needed. • Technological level of many furniture workshops is backwards, i.e. on the lowest. 1- 2 technology categories by international comparison presented in this report. • Absence of common support services. The sector is largely devoid of cost-efficient provision of common support service (tool maintenance, training, etc.). Everything is done at furniture workshop level. This leads to losses in skilled furniture maker’s productivity and sub-optimal allocation of scarce human resources. Air-drying of wood is still the norm, and no business model is developed yet to use contract-kiln operators. • Extremely tight financial situation of furniture companies. Pakistani entrepreneurs face high utility costs in their operations, and these are unlikely to level off in the current geo-political conditions. This makes capacity upgrading costly and risky. No really attractive concessionary loans or other financial incentives exist to date, except maybe the Long-Term Export Finance line. SME “soft” credit lines have not been developed by the banks. • Design trend is static. Currently Pakistani furniture is rather restricted to traditional, ethnic and mughal styles. Modern and contemporary furniture is developed with great difficulty, if ever. Yet the furniture industry aims at higher exports, but eccentric designs probably cannot deliver beyond niche markets. • Skill development is not formalised. The profession is handed down to the next generation with only on-the-job training in the family workshop. Modern techniques and their cost-saving potentials are wasted. Skills development in collaboration with foreign furniture industries is sporadic at best. Differing views on the availability of skilled workers between regions was observed in the survey. The ‘most scarce carvers’ situation seemed to be in Rawalpindi, Gujranwala, Karachi and Lahore, where the relative cost of labour was also deemed higher than elsewhere. • Customs examinations and export procedures are handled with unnecessary difficulty and even animosity to exporters who badly need a basic service from the customs. • Import duties on foreign consumables and equipment. A proper import duty drawback system would alleviate producers’ problems in acquiring proper tools, equipment and operating supplies. It is unclear how the system works today in Pakistan. The country is not close to Singapore, which is the regional centre of machinery and fitting/hardware suppliers. 4.2.2 Shortcomings at company level These comments are made on the basis of documentation received from Pakistan, and from literature and previous studies. 80 International Trade Centre
Raw material recovery Raw material recovery rate needs to be better monitored. It is not only affected by drying defects or fungal diseases of wood, but also if over-sized stock of wood is used, if the log form is difficult to saw, or if basic machining is of inferior quality. Kiln-drying Air-drying in the open is commonly used in dry and warm countries. It yields well-seasoned wood with a relatively long drying period (easily 6-24 months depending on country/condition/type of timber). The downside is that it locks up capital idle for that period, and makes it difficult to respond to new market opportunities quickly enough. Production planning can be very difficult if drying periods are lengthy or unpredictable. It is imperative to use timber that has attained the equilibrium point of moisture content, preferably below 10%. This will help avoiding structural weaknesses of furniture and chairs, and other excessive rejects during production. Less customer reclamations will be received as a consequence. Tool maintenance and its impact on quality Tool maintenance is a crucial part of the wooden craft profession, because it enables efficiency and consistent quality in the work. There is reportedly some degree of negligence in this aspect in Pakistan. Tool maintenance often seems to be the responsibility of an individual worker rather than the company. It has to be remembered that the raw material characteristics also influence tool wear. As wood density and extractives content rises, greater amounts of processing time, energy and tool wear are consumed. Tool material, tool design and tool geometry are the principal criteria to be watched. These may have to be changed if the common wood raw material is replaced by another type of wood. Design Much of the value of furniture is made in the design phase. Manufacturing or carving is supposed to transform a drawn design into a functionally and/or aesthetically performing product. Proper design training is non-existent. Design capacity in Pakistan is declared as being very fragile and mostly based on ancient traditional ones (sold “as they are”), or copied designs from buyer’s photographs or magazines. Usually detailed design or technical drawings are not deployed to convey the design onto wood components. Clear and uncomplicated are the words currently used to describe the wooden household furniture fashion. Rustic or country designs have fallen out of style in the last couple of years. Asian themes appear to be appreciated, what may be a positive notion for Pakistan. But reddish, shiny lacquer finishes are a past trend to a large extent. The interpretation of such current design trends should be expedited in Pakistan, if a modernization of furniture trends is sought for. International Trade Centre 81
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The Furniture Sector in Pakistan
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Acknowledgements The report was pre
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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 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: 4.2 Obstacles and shortcomings - im
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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