RI SEES BETTER PROSPECT FOR FURNITURE EXPORTS

by Andi Abdussalam

Jakarta, March 17 (Antara) - Indonesia's furniture exports have been declining since the 2008 economic crisis but this year the world economy is getting improvement that will support Indonesia's furniture exports to destination countries.          Indonesia with its big tropical timber potential was able to export US$2.2 billion worth of furniture before the 2008 economic crisis, but now its total furniture exports account for only about US$1.6 billion.          In line with the improvement of the market overseas, Indonesia now hopes it would regain its past furniture export glory, setting a furniture export target at US$2 billion this year.          Indonesia expects to see furniture exports surge by up to 10 percent to US$2.15 billion this year, mainly on the back of stable demand in key markets, continuing the recovery already seen in the past year, the Trade Ministry's director general for national export development, Gusmardi Bustami was quoted by the Jakarta Post as saying.            He said that a stronger demand for local furniture was still expected to come from the two biggest shipment destinations, the United States (US) and the European Union (EU).          In the meantime, Industry Minister MS Hidayat was quoted by Antara as saying early this week that the recovery of the world economy would support Indonesia's furniture exports. He therefore set the country's furniture export target at US$2 billion in 2013.          "I think the country's timber industry will experience a high growth because the market is  improving and is returning to normal. Furniture exports are now expected to reach over US$2 billion," Minister Hidayat said after opening the International Furniture & Craft Fair Indonesia (Iffina) 2013 here last Monday (March 11, 2013).          Now, the global market has continued to show a recovery process. Indonesia's traditional markets for its furniture products in Europe, including East Europe, the United States, Japan and the Middle East, have become increasingly improved.          With that condition, Indonesia hopes its furniture exports would increase to a level equal to that before the economic crisis that hit the world in 2008.          According to Minister Hidayat, Indonesia's total furniture exports account for about 1.6 billion US dollars. Its main export destination countries are the United States, France, Japan, Britain and the Netherlands.          "Before the financial crisis in 2008, our furniture exports reached about US$2.2 billion. They then dropped to about US$1.5 billion. Now, they have been recorded at US$1.6 billion and are showing an upward trend. We hope our exports will reach US$2 billion this year," he noted.          The minister said that the Indonesian furniture exports in 2012 reached US$1.41.  The furniture exports were supported by increase in rattan-based furniture exports. The exports of rattan-based products have drastically increased reaching 41 percent from US$143 million in 2011 to US$202 million in 2012.          He also pointed out that in furniture industry development potentials, Indonesia had unrivaled excellence with other countries.          It has abundant tropical timber production. But to become unchallenged timber furniture producer, Indonesia has to be creative and innovative in furniture designing.          Indonesia must have innovation and designs that make its furniture marketable for consumers in the world market. Innovation is not only useful to increase market competitiveness but also for expanding the development of furniture industries in the downstream areas in the country.          "We need innovation in designing products so that they would be marketable. I think we should cooperate with foreign consultants or designers so that all of our furniture products would be marketable," Hidayat said.          On the same occasion, Forestry Minister Zulkifli Hasan said Indonesia's furniture industry should have already become the most advanced in the font-line of furniture industry because it is supported by a number of geographic benefits.          "There is no reason for furniture industry in Indonesia not to grow and develop well. Indonesia has excellence. We have many different tree species that could be planted and be harvested soon. We have sengon tree (Paraserianthes falcataria), for example, which could be harvested in five years while in other countries it is harvestable after 100 years," he said.          However, the forestry minister said that the country's furniture industry could face illegal timber trade in the future.          "The challenge of the country's furniture industry in the future is innovation and illegal timber trade," the minister said.          He said the government had designed a timber legality verification system (SVLK) through Forestry Minister's Regulation No. 38 / 2009 in an effort to face illegal timber trade in the future.          The system is good for providing assurances on the legality of Indonesian timber and for increasing the competitive edge of the country's timber and furniture products.          The system is also expected to prevent illegal logging, improving the people's prosperity and encouraging sustainable forest management. The current trend in the world showed that almost all countries have begun applying timber legality system.          "Almost all countries in the world have agreed to protect natural timber through a timber legality verification system, particularly because at present the climate change continues to take place," the minister said.          Several countries which become destinations of Indonesia's timber exports such as the United States, European Union, Japan and Australia have adopted the system. "European Union for example has as of March 2013 applied the European Union Timber Regulation (EUTR) for all timber product imports," the minister said.          Therefore, the government through the forestry ministry continued to encourage the application of the legality verification system, including by furniture industry and other wood-based handicraft cottages.          "We hope the system would help them. Other countries already have that system. Small industries in the application of the system could be helped with subsidy," the minister said at the opening of the the International Furniture & Craft Fair Indonesia (Iffina) 2013.          In the meantime, the Indonesian Furniture Entrepreneurs Associations (Asmindo), said it has set a target to concluded a transaction of US$400 million in the Iffina fair.          "Our target in the  fair this year is to conclude transactions worth US$400 million, up from that of last year which were worth US$300 million," Asmindo Chairman Ambar Tjahyono said.          He said that Asmindo expected to increase its transactions because its members had been using latest technology in their production process such as the use of machines and woodworking process.          "The increase is about US$100 million and we hope the fair this year would serve as one of the best exhibitions," he said.***3*** (T.A014/b003/B003) (T.A014/A/A. Abdussalam/Bustanuddin) 17-03-2013 13:48: