Furniture exports hit decade high
The global demand for furniture "made in Bangladesh" has risen considerably thanks to improvements in product quality, diversification in design, cash incentives, availability of manpower and lower wages in the industry, according to market players.
As such, the country recorded a decade-high $110.36 million in furniture exports during the previous fiscal year, shows data from the Export Promotion Bureau (EPB).
However, manufacturers and exporters say the industry could do even better with the help of policy support.
Salim H Rahman, chairman and managing director of Hatil Furniture, said the main reason behind the increased exports is the availability of cheaper manpower compared to that of competing countries.
The main reason behind increased exports is the availability of cheaper manpower compared to that of competing countries, says Salim H Rahman, chairman and managing director of Hatil Furniture
Another reason for the hike in exports is that in the past, importing countries would depend on a single source for any given product but they now rely on multiple suppliers from all over the world.
"They do this because if there is any problem in the future, the importer can buy the product from an alternative source without delay," he added.
This helped the industry expand its export earnings by a whopping 251 per cent compared to what it was in fiscal 2012-2013, when outbound shipments fetched a total of $31.41 million, EPB data shows.
Bangladesh currently exports furniture to India, the US, Japan, Spain, South Korea, Canada, Norway, France, Saudi Arabia, Qatar and the UK.
Otobi, Akhtar Furnishers, Hatil Furniture, Brothers Furniture, Partex Furniture and Navana Furniture are major players among 17 members of the Bangladesh Furniture Exporters Association (BFEA) that export such products.
KM Akhteruzzaman, managing director of Akhtar Furnishers, said another reason behind the increase in exports is that the government has been providing the industry with cash incentives on outbound shipments for the last three years.
And thanks to the continuation of this facility in the ongoing fiscal year, furniture exports will only increase but still, there are hurdles preventing the industry from moving forward even faster.
"We need policy support to address these issues and so, we are discussing it with the government, which has been sincere in cooperating to this end," said Akhteruzzaman, also president of the BFEA.
He went on to say that the association of furniture exporters has asked the government to provide the industry with bonded warehouse facilities.
"If given, annual exports will be double compared to the last fiscal year," Akhteruzzaman added.
Kamruzzaman Kamal, marketing director of Pran-RFL Group, which exports products under its Regal Furniture brand, said compared to other emerging sectors of Bangladesh, furniture exports have not increased as much in the last one decade.
He then explained the reason behind the lack of growth is that related accessories, chemicals and other raw materials have to be imported with high duty, which significantly inflate production costs.
"With companies working on market development, opening showrooms and participating in various fairs outside the country, foreigners have come to know about local products," Kamal added.
Other than having to depend on imports for raw materials, other problems faced by the local furniture industry include high interest rates on bank loans and a lack of skilled manpower to improve productivity and research.
Other than addressing these issues, establishing a separate economic zone for furniture makers may help the industry grow as a whole, manufacturers and exporters said.