Furniture export earnings in July, the first month of FY2019-20, show a growth of 9.68 percent, thanks to rising local investments, exploration of new markets, innovative designs and quality, affordable labour force and modern technologies, said industry insiders.
These factors have helped the country achieve a double digit growth for a couple of years in succession, said industry insiders.
According to the Export Promotion Bureau (EPB), the furniture sector recorded export earnings of USD 5.10 million in July in FY 2019–20. This was up from USD 4.65 million recorded for the same period in the previous fiscal year, thus recording a robust growth of 9.68 per cent.
Selim H Rahman, president of the Bangladesh Furniture Industries Owners’ Association (BFIOA) and owner of Hatil Complex, told The Independent that Bangladesh had started exporting their products to new markets such as India, which is eventually helping to increase export earnings.
Moreover, Hatil has installed automatic machineries and invested over Tk. 200 crore to renovate its factory at Savar. The machineries include automated robotic systems to increase its manufacturing efficiency and enrich Hatil’s global popularity, said Rahman. However, these machineries help to double its production, rather than increase job cuts, added Rahman.
Hatil has been exporting furniture to different places in India for the past two years. “We are currently exporting our products to West Bengal and Punjab in India. From May, we are going to open showrooms in Kashmir, Patna and Srinagar among other places,” he added.
Rahman said given the advantage of short distance, it’s convenient for Bangladesh to export products to India.
“Another reason for India importing products from us is because they don’t have to pay import duty, whereas they have to pay 10 percent duty if they import products from China,” he said.
Rahman explained that China used to be the highest furniture-sourcing country in the world. “Now, it has shifted from labour-intensive to high-tech industries because their labour cost has gone up. This has opened up opportunities for Bangladesh in this sector,” he added.
Also, more and more brands were investing in the sector to avail of the 15 percent cash rebate declared by the government on export of furniture. “So, it’s high time for us to invest more in this sector,” he said.
The BFIOA president said around 15 to 20 full-fledged furniture factories were coming up every year.
Bangladesh exports furniture to Middle East countries, India, Canada, Nepal, Bhutan, Malaysia, the US, Belgium and other European countries.
The products have become famous because of their fine quality and innovative designs, said Rahman.
Hatil Furniture exports products worth around USD 150,000 to Bhutan, the Middle East, Canada and Nepal every month, he added.
Rahman said the domestic furniture market has shown an annual growth rate of 20 percent. “The local furniture industry is growing fast because of the rising purchasing capacity of consumers. Researchers are trying to understand their needs, demand and affordability,” he added. New designs, modern technology and innovative products have jacked up the demand for furniture in the local market, he noted.
Asked about the local market size, Rahman said though there is no statistical data, it would be approximately Tk. 4–4.5 thousand crore.
The Hatil chairman said furniture is no more a luxury product; it has now become an essential product all over the world and the government should formulate a policy keeping the global changes in mind to boost exports in the sector.
Describing the challenges faced by furniture exporters, Rahman said: “Raw materials are still being imported. On an average, we pay 55–60 percent import duty on these materials. This hikes the production cost and consequently the final price of the product is increased.”
He added: “We need more investment in backward integration sector of furniture so that raw materials could be sourced 100 per cent locally and the cost could be reduced as well.”
Furniture is the highest labour-intensive sector after readymade garments and if the government can provide proper policy support, it will be the second highest export earning sector, said Rahman.
He said inadequate infrastructure, poor port management and long lead time were other impediments to attracting orders from the EU and the US markets.
According to industry insiders, the global furniture market is worth Tk. 23,000 crore and China meets 60 per cent of the demand.
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