|Industry AnalysisFurniture Sector of Pakistan|
|Course: Analysis of Pakistani Industries
Assignment: Secondary Research
Furniture Sector Pakistan
- History dates back to as long as 20th century, the furniture design is a combination of eastern and western style, due to the shared history with British.
- There are ancient traditional values attached to the furniture in a house in our society. Items like, the old ‘charpais’ (string beds), inlaid ‘door jambs’, handcrafted ‘almaris’ (cupboards), ornate ‘jhulas’ (swings) and grandfather’s wooden ‘kursi’ (chair), wooden ‘takht’ (divans), and so on, have values attached. Moreover, due to the tradition of gifting furniture when marrying off daughters, the furniture craftsmen were always deemed as a significant part of the society.
- Considered as a non-organized Small Scale Cottage industry.
- The export of furniture which was worth US $3.46 million in 1995-96 decreased to US $3.33 million in 1997-98.
- A growing trend towards contemporary furniture and posh furniture brands started in 1983 with the establishment of first brand ‘Vogue’ by Neelam Mawaz.
- According to the PTDA, there are about 700 manufacturing units in the country.
- These units are operating on the basis of single shift/300 days per annum.
- 8,000 people (approx.) are directly and indirectly attached with this occupation
- Strong historical background of craftsmen
- The leading furniture making areas of Pakistan are Gujrat, Peshawar, Lahore and Karachi and Chiniot.
- Wooden furniture forms 95% of the total furniture market in Pakistan.
- The British retail chain Harrods sells some Pakistani furniture at its outlets.
- Chiniot in Pakistan is well known throughout the word for its beautiful wood carvings and brass inlays. Its furniture is better in quality than that of other areas of the country.
- This industry, combined with the handicraft industry, is employing about 50,000 people.
- The demand for Pakistani furniture has been rising constantly. It has bright prospects to export more than $1 billion worth of furniture annually in the international furniture market.
- The share of wooden furniture around the world is 77% followed by metal furniture 17% and plastic furniture at 6%.
- Italy is the world’s biggest exporter of furniture followed by Germany and Canada. United States is the biggest importer of wooden furniture followed by Germany and France.
- Pakistan’s world share is insignificant despite craftsmanship.
- Chipboard: imported chipboard is used in manufacturing bedroom sets, which sell the most.
- Polish chemicals materials
- Color paints
- Hard ware
- Forests in Pakistan cover about 2% of the total area.
- The best wood used in Sheesham/ Rosewood. 80 % of Pakistani furniture market is dependent on it.
- Shisham (Dalbergia sissoo) is also commonly known as “Tali” in different areas of Pakistan and internationally it is known as “Indian rose wood” and Bombay black wood.
- It grows almost everywhere in plains of Pakistan.
- It varies considerably in size according to locality. Under good conditions it reaches a height of 25m with a bole early straight, clean, cylindrical having an average length of about 6m and diameter upto 1.5m.
- The average time that Sheesham takes to grow is 50 years.
- Reserves of Sheesham have decreased by 50 % in the last 5 years.
- Alternative use of Sheesham; low value added or firewood by timber mafia.
- Due to decreased supply, the prices have gone up.
- Swati and Peshawari furniture is made from oak, deodar and partial wood, the wood-carvers of Azad Kashmir and some parts of the Frontier province use walnut wood.
- Furniture markets are getting wood from timber markets, forest department and private farms.
- Other types of wood used in manufacturing furniture are: . Teak wood . Walnut wood . Keekar wood.
- Pakistan has been gifted with valuable craftsmanship e.g. Carved Sheesham tables are the specialty of the craftsman of Chiniot (Punjab)
- The workers are usually unaware of the procedural standards and quality control requirements of the international market.
- Wood seasoning facility center is available in Pakistan
- The labor required for manufacturing process is easily available on daily wages, per unit basis and permanently employed.
- The tools usually used are outdated and obsolete. They are locally made. Most of the work is performed through manual labor.
- Training: Lack of educated, certified and professionally trained work force.
- R&D: People do come up with innovative ideas and designs but no proper R&D facilities are available.
- There is a constraint of technology i.e. improvised machinery in the region due to their high import price.
- Few creative personnel are employed in the furniture industry due to lack of local demand and payoffs.
PRODUCT MANUFACTURING PROCESS
Wood is cut into different sizes of blocks and slabs. If the wood purchased is not seasoned then these blocks/slices are seasoned through different processes, namely:
- . Condensation
- . Boiler System
- Vaccum system
- Seasoning through putting the wood slices under normal environmental temperature for considerable duration.
Before start of manufacturing of any furniture product a desired design is selected. Selection of elegant design is important to ensure attractive finished product.
The seasoned wood blocks are cut into desired shape and slices according to the requirement of design. The slices of wood are molded into the desired shape according to the design. Once the different pieces are carved & molded than these parts/pieces are assembled or fixed together to give the shape to the final product.
Assembled product is grind to make the surface smooth. Once the surface is smooth, finishing material is applied to make the surface ready for paint or polish. After the base is prepared final finishing is applied depending on requirement in term of paint/polish. Upholstery of fabric is carried out according requirement of design.
- Most of the local demand comes from hotels, restaurants, and public facilities.
- Other demands include office furniture market which consists almost entirely of metal furniture,
- Furniture items produced in Sindh comprise of ordinary chairs, tables, and other items like doors and windows and sold internally because of the simplicity of design and heavy weight.
- The market is divided into home use and contract markets. The contract market constitutes those units that deal with supplies to hotels, restaurants, offices and public facilities.
- More than 80 percent of the furniture demand in the country is met by the Chinioti furniture.
- With the rapid increase in the development of new housing schemes, the increased demand of wooden furniture is anticipated
- All Pakistan Furniture Exporters Association is established.
- The major buyers of the Pakistani furniture are the UK, USA, Sri Lanka, the Gulf countries like Dubai, Saudi Arabia, Oman, Kuwait, etc.
- The United States buys mostly bedroom furniture. UK and the Gulf countries import kitchen furniture and office furniture.
- The demand of wooden furniture in the International market is increasing
- Gradually at an annual average rate of 4 percent (Statistical Division of Pakistan).
- Most players in the furniture market seem to be unaware of social compliance and environmental issues worldwide.
- Karachi leads in terms of exports, followed closely by Lahore and Peshawar.
- Pakistan’s exports kept increasing by 10 percent annually until 2007-08. However, the past decade can be considered as an opportunity lost for the nascent industry.
- A few years back, an exhibition on furniture was conducted by then commerce minister Razzaq Dawood in Europe which attracted the attention of many Asian art craft lovers, and furniture manufacturers back home got hefty orders which could not be met owing to scale limitations.
- Lack of these attributed to sudden decline in exports during testing times. In FY08, Pakistan exported furniture worth $12 million, while the amount fell to $9 million in 2009 and further declined to around $8 million in 2010. There are many other reasons for this decline too.
- On a global level, the image of Pakistan in the furniture market is bad. Foreign firms do not trust Pakistani companies because the latter often fail to meet quality standards. Resultantly, these firms end up getting fewer orders. The government itself pays little attention to the problems faced by this industry. The fact of the matter is that there is a dire need to formulate a holistic plan of action to first make this industry sustainable, and later to help it foster and gain recognition on an international level. Otherwise, it’s curtains for this industry.
Supporting and related industries
- Policy makers. Easy access of credit, tax holidays on expansion, frequent road shows and visits to international exhibitions, along with assistance from government officials for marketing furniture in Europe are some of the initiatives that can benefit the industry.
- There are several other reasons for this industry’s current drawback. To start with, the cost of transport associated with the industry has increased manifold due to a significant rise in the fuel prices. The cost of labor too has increased without an increase in its quality. Even in this era of technological progress, at least 98 percent of manufacturers are using traditional methods in the furniture industry. The latest technology, hence, is not being used at all.
- Pakistan’s wooden furniture industry has a great export potential, and in quality is inferior to none. The domestic market is very vast and varied. However, Japan’s import market has great potential, too. No tariffs are levied on the furniture or its components. The largest obstacle to imports of furniture into Japan is size. Western furniture is often rejected because it is too large for the Japanese consumers.
- Traditionally, Japan’s furniture market has been heavily dependent on the so-called box furniture. This type of market, however, is gradually fading away. Instead, the focus of home-use furniture demand is shifting to furniture sets for reception rooms. The increasing adoption of western housing and interior designs will further accelerate this trend. Many single-family dwellings and condominiums come with built- in furniture – such as walk-in closets. The Japanese consumers have a traditional attachment to wood. They dislike the presence of knots in the furniture surface, and expect manufacturers to perform careful finishing to all parts. Hence, products that emphasize the beauty of the wood grain will be an important key to success.
STRATEGY, STRUCTURE AND RIVALRY
- The furniture industry has recently gone into aggressive marketing strategy in order to increase exports.
- 95% of the furniture industry is dominated by wooden furniture manufacturing.
- The two main types of wood furniture industry are cottage and small scale industry. They use obsolete machinery and emphasis on manual labor.
- Wooden furniture is manufactured in Pakistan by a large number of cottage industries, spread over rural areas, small towns and cities.
- Today, a large quantity of wooden furniture is manufactured in Pakistan at the cottage level. The environment and conditions being favorable, the wooden furniture industry holds out a bright scope for further expansion.
- A number of families in Hala, Kashmore, Khanewal and Dera Ghazi Khan have stuck to the traditional workmanship, despite sharp, fluctuations in the taste of customers.
- The wood carvers’ skills are predominantly visible in furniture making, apart from carving wooden ceilings, wooden panels, doors and windows.
- The oldest single style evolved, has been evolved in the NWFP, where craftsmen design massive pieces, beds, desks, chairs, stands, lamps etc.
- Swati furniture has basically broad sets, heavy legs (chairs) and geometric floral designs, carved in various styles of woodwork. It has been developed in the Peshawar valley.
- Jacquard work is a popular traditional craft of Sindh. The articles, such as table lamps, chairs, and sofa sets, produced by the lacquer industries of Hala in Hyderabad district and Kashmore in the Jacobabad district, are very popular. There was a time, when villagers used lacquer work furniture only- bed legs, low chairs, in the modern homes of the rich in cities.
- Furniture items produced in Sindh and parts of Punjab are more cottage industry based and for domestic use only.
- Exporters are suffering manifold problems while local manufacturers are facing challenges due to heavy imports of furniture. Chinese furniture has also hit the local industry by 70 percent and the sales of locally manufactured household furniture have gone down by 30 percent.
- Timber production on the other hand has gone down drastically because of unchecked deforestation.
- About sixty percent raw material used in furniture making is imported from China. Imported item mostly used in furniture making are chipboard, hardware items and glass.
- Exports of furniture have gone down since 2007 due to political and economic turmoil coupled with load shedding. It is observed that no importer has entered the Pakistani market and no one is ready to book orders by browsing through designs at company web-sites.
- For a good start, the government should immediately introduce and implement a reforestation plan that is focused on replanting and sustenance of the ever depleting rosewood. A minimum of ten trees should be planted for every tree cut, and a heavy penalty should be placed on cutting these trees prior to their maturity period, which is approximately fifty to sixty years.
- To cut down the local wastage of this precious wood, a ban on its use for minor, less profitable purposes is necessary. This may include banning the use of rosewood to make school furniture. To meet such type of demand, research should be carried out on finding alternatives for rosewood. Acacia, for instance, is one such alternative. It can be used as a perfect substitute if it is properly seasoned.
- Also, to make furniture goods more competitive at the international level, the government should revise its taxes and duties on this industry. Allocating idle industrial zones and premises to the furniture industry will also help in boosting its exports. Furniture testing facilities should be set up to guarantee quality exports that would boost the confidence of international buyers. But most importantly, the government needs to give this sector a most favored industry status. Resultantly, the cost to consumers will fall, thereby stoking demand. This will lead to more demand which will enhance this industrial base, and potentially enhance furniture exports further. The potential for growth of the industry exists. With the right policies and will, this sector has every chance of excelling, despite the general economic conditions of the country.
SOURCES FOR SECONDARY RESEARCH: