By Irene R. Sino-Cruz
CEBU CITY — Vietnam has overtaken the Philippines in the race for the global furniture market, said an industry group in this central Philippines city, a main source of furniture for export.
Vietnam’s share of the global market rose to 0.78 percent in 2012, beating the Philippines’ share of 0.54 percent, the Cebu Furniture Industry Foundation Inc. (CFIF) said in a report.
China remains as the world’s top supplier of furniture, with 11.9 percent.
Malaysia, Indonesia and Thailand follow and all have bigger market shares than the Philippines.
The CFIF cited several factors for the drop in Philippine furniture exports, including limited government support, increasing competition from Asian neighbors, dwindling supply of designers, design piracy, increasing cost of primary raw materials, lack of adequate capital among smaller producers, and unwillingness to invest in plant equipment.
CFIF president Michael Basubas said the industry was in an unfriendly environment. He said, for example, that the proposed Customs Brokers Act pending in Congress would effectively increase costs for exporters, and requirements imposed by the Philippine Drug Enforcement Agency (PDEA) on importation of chemicals used by furniture exporters made it difficult for the industry to operate.
The CFIF has also asked the government to come up with regulations to ensure that materials produced locally will meet international standards.
Competition is becoming tighter, it said, because exporters in neighboring countries get substantial government support.
They also get Filipino designers to improve their design capabilities, it added.
Philippine furniture exports peaked in 2002 at $316 million. They fell to $278 million in 2003 and rose in 2004 to $294 million and in 2012 to $304 million.
In 2012, Cebu accounted for 40 percent of total furniture exports although only 20 percent of furniture companies in the country are based here.
The Cebu furniture industry employs 80,000 workers directly and 140,000 indirectly through related industries.
The CFIF has come up with various programs to make the industry more competitive and to make Cebu the “design destination in Asia.”
It also encourages furniture exporters to put up their own websites for use in marketing.
Last year, another report on the Philippine furniture industry recommended that the industry target midrange to high-end markets to avoid competing on price with China, Vietnam and other low-cost producers.
It also recommended reviewing marketing channels to address the desired markets, and developing both local and export markets to have more flexibility in pricing exports. With INQ7.net
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