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

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Function also continues to influence design at market as LCD/plasma TVs are incorporated into home entertainment and bedroom pieces. Taller dressers offer better viewing of the TV from the bed. Home entertainment centres are made with taller TV carts to raise the unit to a better viewing height and allow more storage underneath. Finishing and lacquering Finishing tends to be a common bottleneck for furniture coming from developing countries. The quality of final polishing of carvings needs to be improved, as well as the consecutive painting and lacquering. It should be understood that these work processes are none less important than the actual carving. On the contrary, a bad finish can lower the value of the product, and downgrade unnecessarily the carver’s skilled input. Too much variation in blending the colours, paints and solvents is routinely observed. These should follow controlled standard procedures for uniform quality. Matte finishes are currently well accepted in decorative small furniture items (so-called occasional furniture). But in larger household furniture items the situation is more mixed. Antiquated or natural (visible grain patterns) surfaces have been in fashion in the recent years, and this trend has certainly not been marked by all producers. The shiny or satin lacquered surfaces are still the common norm in many producer countries, but pretty much out-dated in the overseas markets. Closely linked with the former observation is the technical inadequacy of some key equipment. For instance, if the compressors used for spraying the lacquer is too weak, no proper finishing quality can be achieved. Brush-painting consumes more lacquer and should be avoided. Human health is a growing concern in wood lacquers, and it should be taken seriously into account by exporters to Europe, for example. Access to market information Broadly speaking, Pakistani furniture firms suffer from a poor access to up-to-date market information. Non-systematic gathering of such info leads easily into inability to assess its reliability and put it into proper use. Therefore, the importance of a continuous flow of market information flow cannot be emphasized too much. Its collection and dissemination is an activity of its own, which requires external resources and dedicated staff to be beneficial for the industry. 4.2.3 Solutions for each obstacle and shortcoming with explanations Solutions needed from policy-makers The following checklist contains action elements for policy-makers who are supposed to convey government support to furniture sector. The recommended policy initiatives need to be designed to strengthen exports of the furniture industry by improving the trade environment, lowering costs and improving efficiency. To be effective, these initiatives need to be viewed as an integral part of the country’s overall economic policies and structural reforms. The government policy framework should ideally ensure the following: 82 International Trade Centre
• Consistent policy for supporting sustainable and legal raw material procurement. Planners of forestry should make sure they understand the long-term needs of the downstream processing enterprises. • Transparent log market where all the domestic users can access material in a fair competition. To counter the wood mafia, there should be a model scheme. Currently in Pakistan there are lo of middlemen involved in the process. This is a symptom of a badly working round wood market. Lumberyards should be built of international standards which have their own process wood, season it and make wood according to Industry’s needs into dry or sawn timber. • Catalytic tax concessions or similar fiscal incentives to facilitate upgrade of the industry’s capacity. Now only freight subsidy is sometimes allowed as a weak subsidy. At the same time, one must remember to keep possible subsidies on WTO acceptance limits. • Consistent and transparent export regulations (cut down red tape and inefficiency). • Rationalisation of import tariffs on raw materials and equipment. Pakistan badly needs some operating supplies from abroad (hardware, fabrication and foam, etc.). A duty drawback system is a common way of encouraging necessary imports. Technology upgrading is almost impossible without some form of tax rebate. • Improvement of transportation, communication and information infrastructure. Enabling environment is needed to stimulate growth of industry. • Strengthening of institutional infrastructure for support services demanded by industries (associations, research and development institutes, education and training, export promotion offices, testing and Standardisation, certification and labelling, verification body of legality, etc.). The private sector should always assume the primary actor’s role in putting the policies into a maximal use. The government’s role in supporting export marketing tends to be subtler, and the private sector cannot be made dependent on it. Solutions proposed for companies This part tries to provide guidance for Pakistani companies on very practical level. Raw material recovery Improve the current basic processing and apply wood-saving measures. Avoid wasting the true potential of valuable woods in secondary applications. Utility woods serve best the institutional public sector market segments. Manufacturers should negotiate with such buyers on a contractto-contract basis what grade of wood is actually fit for their purpose. Russia (mostly softwoods, some hardwoods), New Zealand (radiata pine), and East Europe (temperate hardwoods) are not easily tapped by Pakistan to supply the deficit of hardwoods. The US’ hardwood export promotion body (American Hardwood Export Council, AHEC) is currently targeting China for exporting more temperate hardwood sawn timber for furnituremakers. This could be a potential source also for Pakistan in the future, particularly because International Trade Centre 83
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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
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Table of contents Acknowledgements
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Box 3.1 Multilateral discipline of
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Executive summary This study sets t
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the extent possible maintain or imp
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1 Background and objectives 1.1 EC
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2 Furniture sector in Pakistan 2.1
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On the buyer’s side, there are gl
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According to the websites of import
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Global demand for furniture in main
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suppliers, both domestic and other
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Table 2.3 Pakistani furniture expor
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Figure 2.4 Distribution structure f
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freight rates have increased and do
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Price The prices of local machinery
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Indonesia has also announced a ban
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industry itself should support effo
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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 and 90: 4.2 Obstacles and shortcomings - im
Page 91: Raw material recovery Raw material
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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