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Furniture exports still show signs of growth thailand.com recently sat down with Sanpakit Thavornwong, manager of the Thai Furniture Industries Association (TFA). Read through the interview transcript to find out more about Thailand's fast growing furniture industry. thailand.com: What is the current situation of Thai furniture exports? Sanpakit: Despite the general gloomy situation of Thailand's export sector, the furniture industry is one of the few industries that still have positive signs of growth for this year. However, we are concerned about the current economic situation in our two most important markets, the United States and Japan, and how the global economic slowdown underway will affect Thailand's furniture exports to these key markets. We are projecting furniture exports to reach US$ 1.1 billion in 2001, up from up from US$945 last year. This would maintain our recent stretch of double-digit growth, which no other export industry has been able to maintain through the economic crisis. We are fortunate in that the furniture producers in Thailand use locally sourced materials and inputs almost exclusively in the manufacturing process, unlike many other industries which have to import raw materials. thailand.com: How important are the Japanese and American markets to furniture exporters in Thailand? Sanpakit: Japan is Thailand's largest importer of furniture, importing 35% of total furniture exports from Thailand, with the United States taking another 25%. Unfortunately, slowing economic growth and reduced consumer demand in the US has forced several major chain stores in the US to close down their outlets. As a result, distribution channels for furniture in the US market were narrowed down. In tackling this problem, many exporters have shifted to focus on the Japanese market instead. At the moment, the Japanese market is extremely competitive. It is the world's biggest market for furniture and everybody is fighting so hard to establish themselves in this market. Exporters to the Japanese market are currently facing some difficulties as importers there are now trying to purchase directly from manufacturers in order to avoid trading companies who act as middlemen. This changing trend will affect Thai exporters, as they can no longer export large lots of furniture which is warehoused by the middleman and distributed. Our members are going to have to focus more closely on production being tied directly to orders, to avoid carrying excess inventories.
Sanpakit:
Main regional competitors include China, Malaysia, Indonesia and Vietnam,
all of whom are competing fiercely both in terms of prices and quality. thailand.com: How does the government help support the furniture industry in Thailand? Sanpakit: In Thailand, the private sector has to work extremely hard to support ourselves in order to stay competitive. The government, largely through the Department of Export Promotion, offers support only in terms of marketing. In other areas like the distribution and production, we have to struggle to do it all ourselves. Although our country is quite fortunate to have a huge supply of raw materials used in the production of furniture, a lot of them are exported without being processed into value-added products. Even our competitors buy raw materials from Thailand. A lack of government support has also made it difficult for Thai manufacturers to promote products with the locally created designs. At the present, only 20% of furniture exports from Thailand are created by Thai designers, with the remainder being produced under the clients' orders and designs. thailand.com: What is being done to further improve the competitiveness of Thailand's furniture industry? Sanpakit: The Thai furniture manufacturers have been producing products for foreign brands for a very long time. Over time, they have learned to keep abreast of modern knowledge in production technologies and utilized them in improving the quality and designs of products that meet clients' orders. Our members have focused on improving their use of technology in production, substantially improving their ability to produce high-quality products that meet the market needs. The trade barriers imposed by developed countries have also forced the manufacturers to try to upgrade the production process to meet the strict standard required by the International Standard Organization (ISO). New developments in Internet communications these days have the potential to benefit the industry in terms of marketing and distribution and exporters are taking advantage of new technology with varying degrees of success so far.
Sanpakit: The TFA is helping to organize the Thailand International Furniture Fair (TIFF) 2001 as a separate trade event this year. TIFF was previously held concurrently with the Bangkok International Gift Fair (BIG). TIFF is the country's premier showcase exhibition for furniture exporters and has attracted more than 160 manufacturers and exporters this year who will display and exhibit their products in more than 500 booths. We're holding the fair from March 7-11 at the Bangkok International Trade and Exhibition Center. It's the perfect time of the year to stage the fair because our competitors are also organizing such events and prospective customers will be traveling to the region to look for regional suppliers. It allows clients the opportunity to meet suppliers within a single journey to the region and Thailand will be one of their key stops. People can expect to see top quality furniture on display made from a variety of materials, including numerous soft woods, rubber wood, hard woods, golden teak wood as well as plastic and metal. We'll also have a fair number of displays featuring knockdown furniture made of particle-board. Also upcoming is, Furnitech-Woodtech, which has been held for the past eight years. This event focuses on international woodworking technology, furniture production machinery and accessories along with a technology trade exhibition and conference. It's also being held at BITEC from March 16 - 19. thailand.com: Thanks for chatting with us. Sanpakit:
My pleasure. For
more information, please contact the Thai Furniture Industries Association
at Tel +66 2 513-6262--3 or check its website at www.tfa.or.th
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