ASEAN furniture industries gear up for AEC

ASEAN furniture industries gear up for AEC

Members of the ASEAN Furniture Industries Council (AFIC) recently met in Bangkok to discuss preparations, problems and cooperation regarding the impending entry into the ASEAN Economic Community (AEC) in 2015.

The Meeting was chaired by Mr.Vongkot Tangsubkul, AFIC Chairman, and attended by Mr. Voravuth Koopthavornrerk, Secretary General of AFIC and representatives of all seven ASEAN furniture industry associations that make up the membership of AFIC, from Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, discussed the individual problems facing the regional furniture industries, as well as way to foster greater intra-ASEAN cooperation and trade, trade with countries outside the AEC, way to strengthen the regional furniture value chain, and the threats and opportunities posed by competitors, especially China and India. Each of the regional furniture industries face different issues and problems as a result of diverse and disparate nature of the ASEAN representative countries.

According to Mr.Dhanakorn Kasetsuwan, representative of Thai Furniture Industries Club (TFIC), which currently chairs AFIC, Thailand’s strength in furniture production is its high level of quality, which is well accepted in the country’s major export markets, the USA, UK, Japan, Australia, and Germany. However, with the ongoing economic crisis in Europe and possibly the United States, Thailand has to shift its dependence away from these countries towards the more buoyant markets of Asia, as well as intra- ASEAN trade.

Thailand’s total furniture exports for the first nine months of 2011 were US$ 880.26 million (US$ 1,172.80 million in 2010), indicating a similar level to the previous year’s exports in spite of economic setbacks in the major export destinations. However, 2011 was the first year in which Japan became the number one export market, taking the place of the United States.

Dhanakorn notes that exports from Thailand to the other ASEAN countries are in the rise, growing from US$43.17 million in 2009 to US$ 57.25 million in 2010 and US$ 44.39 million in the first nine months of 2011. Thai exports to China show an even more pronounced growth trend, rising from US$ 8.22 million in 2009, US$ 15.75 million in 2010 and US$ 18.74 million in the first nine months of 2011.

Vietnam, the largest furniture exporter ion ASEAN with total export of US$ 3440.00 million in 2010 (US$ 2830.00 million in Jan-Sep 2011), is seeking to improve the quality and competitiveness of its products, while securing more domestically produced raw materials through increased emphasis on plantations, according to Mr. Huynh Ban Hanh of Vietnam’s Handicraft and Wood Industry Association. For Vietnam, the United States is the major market for its exports while China is a growing second, importing  US$ 510.99 million in Jan-Sep 2011 compared with US$ 404.91 million for the whole 0f 2010.

Malaysia is the world’s ninth and ASEAN’s second largest furniture exporter with exports of US$ 1.842.05 million in Jan-Sep 2011 (US$ 2,478.70 million in 2010). Mr. Lor Lean Sen of the Malaysian Furniture Industry Council said that Malaysia is increasingly diversifying into non-traditional markets and is emphasizing environmentally sustainable “green wood” source as the primary raw material.

Both the Philippines and Indonesia are increasingly recognizing the importance of diversifying their furniture export markets to ASEAN and China, reducing dependence on traditional markets in the United States, Europe, and Japan.

Singapore meanwhile is reinforcing its role as a design and marketing centre with most manufacturing operations undertake overseas in countries such as China, according to Mr. Jerry Tan of the Singapore Furniture Industries Council.

The furniture industry of Myanmar is currently under developed as a result of economic sanctions, according to Mr. Barber Cho the Myanmar Timber Merchants Association. He added that Myanmar is trying to reduce its dependence on exports of logs and is instead actively training workers in the wood industries with a view to upgrading and standardizing the furniture industry in time for entry to the AEC.

AFIC was established in 1978 as a non-profit regional trade organization, founded to promote and strengthen ties within the ASEAN furniture industry. Its roles include identifying and proposing projects that promote the common interests of AFIC members and making recommendations on trade incentives and measures to benefit the ASEAN furniture industries to further accelerate and harmonise to growth and progress of the regional furniture industries.

The AFIC members meet twice yearly for Working Committee Meetings and an annual conference. Thailand holds the Chairmanship of AFIC for the 2011-2013 term after which Indonesia will take over the role.

For more information, see www.aficfurn.com