Despite making a profit from furniture exports due to the wealkening of the US dollar against the rupiah, the domestic furniture industry felt the impact of weakening purchasing power due to economic slowdown and low absorption of the state budget (APBN). After holding the National Leadership Meeting (Rapimnas) of Indonesian Furniture and Handicraft Association (AMKRI) 2015 in Jakarta, Tuesday (August 4), Secretary General of AMKRI, Abdul Sobur, suggested that this year, sales of domestic furniture is estimated to reach IDR 10 trillion.
“Of IDR 10 trillion, it turned out that in January – June 2015, it has decreased by about 20 percent over the same period the previous year. Even through during the Lebaran, there was an increase in sales of around 8 percent. As an illustration, the number of furniture and handicraft entrepreneurs of domestic origin is currently around 40 percent. Practically, between 55 to 60 percent of market share in the country is dominated by imported furniture and furniture products. Of a market share of about 60 percent, the majority or 90 percent of the products are originating from China, and the rest is occupied by products imported from Europe and America, he explained while accompanying Rudi Halim as AMKRI elected Chairman for the period of 2015-2018.
Overall, AMKRI still is targeting exports at USD 5 billion in the next five years. This is important considering the furniture and handicraft industry is the future for Indonesia, because it has enormous development potential, both I terms of raw materials, human resources, and market uptake. In fact, during the first half of this year, exports grew only 1 percent of the growth expectations which should reach percent this year.
Sobur described the condition of furniture and handicraft exports in the first half from January to June, growth is relatively small, only 1 percent. When compared ‘apple to apple’, the condition is relatively the same, because in the same period last year, export value reached USD 920 million. while the condition this year up to June, exports reached USD 232 million. However, we are still optimistic that there are still five months until the end of this year.
In 2014, export growth reached 4 percent, and this year exports are targeted to grow 10 percent. Even though the global economic conditions in Western and Eastern Europe weakened. Exports of rattan-based products to destination countries Russia and Ukraine decreased. Likewise for exports of rattan products to Western and Eastern Europe, exports experienced a decline of about 6 percent. While, exports of wood products to the United States grew 5 percent.
“In terms of raw material, exports originating from timber is still high at about 65 percent, and the rest include rattan raw material at 12 percent, and other raw materials so that overall growth is about 1 percent from the previous year. For new export destination markets, it will try to enter China as a nontraditional market, which is potential to be explored. It is not easy to other the Chinese market, because the country already reached a turnover of above USD 55 billion, while our exports are still below USD 2 billion.
To enter the Chinese market, with the market in China which has reached USD 80 billion, we can enter gradually. AMKRI is optimistic to reach exports of USD 300 million to China, by trying to exports products which are not manufactured in China, such as carved teak wood and handicrafts that use specific timber. In addition to China, we will try to enter the Middle East market, which is not large, 4 – 5 percent, but the market is stable. A number of countries targeted are United Arab Emirates, Qatar, Kuwait and Saudi Arabia. Because we have relatively never been there, we expect exports to reach USD 200 million, bringing a total of USD 2.5 billion. The important thing is that we are optimistic that in 5 years it will reached USD 5 billion. “he said. (E)
Business New - August 7, 2015