Hatil: from an idea to an established brand

Selim H Rahman

Just after completing his graduation in 1988, Selim H Rahman, chairman and managing director of Hatil Furniture, started gathering experience in the timber business and together with his father, developed an idea to manufacture doors on a commercial basis.

According to Rahman, the idea came to him when a customer named Lota Hossain brought a carpenter to his family's timber mill in the Farashganj area of Old Dhaka. She had come to purchase wood to make doors for her then under-construction apartment complex in the capital's Dhanmondi.

"I shared my new idea with her and she was instantly convinced. As such, she placed an order for doors, paying Tk 50,000 in advance to avoid any hassle," he said.

Hossain's order encouraged Rahman to set up a small-scale door manufacturing facility the following year in Old Dhaka's Gandaria.

Before passing away, his father Habibur Rahman supported him in realising the new idea.

At the time, there was no dedicated door manufacturer in Bangladesh.

So, Hatil can trace its roots all the way back to 1966, when Rahman's father established HA Timber Industries.

While carrying on that legacy, Hatil has become a renowned furniture brand and a pioneer of the industry in Bangladesh.

Over the years, Hatil has become synonymous with elegant, contemporary and high-end furniture.

With a view to providing the best possible quality, the company has been practicing "Kaizen" since 2007. Since then, the furniture maker has grown into an environmentally cautious operation as well.

Kaizen is a Japanese business philosophy regarding the processes to continuously improve operations and involve all employees

Rahman opened his first door outlet at Badda in 1989 before opening another at Mirpur, the country's hub for home furniture, in 1993.

Later, he started manufacturing all kinds of home furniture in 1996, building Hatil into the household brand it is today.

Hatil began its journey with a capital of Tk 50,000 just 32 years ago. Now, the company is valued at around Tk 800 crore.

Its annual turnover was Tk 396 crore in 2020 while export earnings stood at $2.5 lakh the same year, Rahman said.

During the company's infancy, all the furniture were completely made manually by around 100 workers. Now, Hatil employs about 2,600 workers to run its mostly mechanised operations.

Rahman initially used locally sourced wood, particularly teak wood from the Chattogram Hill Tracks. He later started to make furniture with imported wood to meet growing demand for high-end products in line with Bangladesh's rising economy.

Rahman also opted for imported wood considering the possibility of a shortage in the future if consumption is left unchecked.

As such, the Hatil imports seasoned wood from Germany and Canada certified by Forest Stewardship Council, an international non-profit promoting responsible management of the world's forests.

And although most of the raw materials are imported, Hatil can ensure around 50 per cent value addition for its products, said the chairman and managing director.

The company meets its monthly requirement of about 10,000 cubic feet of solid wood completely through imports.

The wood is used to make high-quality furniture for both homes and offices.

Of the company's total production, around 25 per cent are office furniture, he added.

And thanks to its unyielding efforts to provide top-notch products, Hatil has been able to enter markets in the US, Canada, Australia, Saudi Arabia, Kuwait, United Arab Emirates, Thailand, Egypt, Russia, Bhutan and India.

The company has 22 outlets in the neighbouring nation and two in Bhutan.

In the domestic market, Hatil became a proud recipient of the HSBC-Daily Star Climate Award in 2013 in a green operations category.

Regarding the growth of his business, Rahman said it was possible because Hatil always tries to satisfy its customers and maintain product standards with up-to-date designs.

"We always survey the market demand and customers' choice in terms of price and product specifications," he said.

Besides, Hatil emphasises on slim furniture designs in a bid to avoid the unnecessary waste of natural resources, Rahman added.

He went on to say that the company's furniture are all equally durable despite their price differences, which result from the various types of additional materialsthat may beused in each product.

POTENTIAL OF THE DOMESTIC FURNITURE BUSINESS

"The industry is growing fast with the rising disposable income of the emerging middle-class," Rahman said.

Other than the growing domestic demand, the potential to export products is another reason to expect that the industry will develop further.

And since Bangladesh has an abundance of low-cost labour, the labour-intensive furniture sector could expand in the country.

In developed countries, many are turning away from the furniture business due to high labour costs. Bangladesh can make use of this opportunity to grab a bigger share of the international market by providing quality products at competitive prices, he added.

CHALLENGES FOR THE FURNITURE INDUSTRY

The local industry is quite dependent on imported raw materials, including those used by backward linkage industries.

On an average, a 60 per cent import duty is levied on raw materials used by local furniture makers while the government provides only 15 per cent as incentive on export.

Considering the situation, the government should dedicate bonded warehouse facilities for the furniture industry so that it can reach international standards and help diversify the country's export basket, Rahman said.

The furniture industry generates a huge amount of employment opportunities and at the same time, it can help the country earn foreign currency.

"So, the government needs to take pragmatic policy measures to support this potential sector," he added.

There was once a lack of professional furniture designers as no educational institute in Bangladesh would provide a degree in woodworking despite the considerable industry demand.

"But now, we provide training to employees in foreign countries, where they can learn about different production and design practices," Rahman said.

OVERALL SCENARIO OF THE INDUSTRY

Industry insiders believe the demand for home and office furniture hit Tk 25,000 crore in 2019 and according to a report from the EU, the figure was only Tk 6,700 crore in 2012.

And although there is no reliable data on the domestic market size, Rahman believes that it is surely worth more than Tk 25,000 crore now.

At least 30,000 people are involved with the furniture industry, which offers around 5 lakh formal and informal employment opportunities across the country, said the chairman and managing director of Hatil.

According to the EU study, 40 per cent of the raw materials used by furniture makers in Bangladesh comes from domestic sources.

The forests in Chattogram and the Sundarbans are the largest providers of quality timber in the country, the study found.

The main raw materials used are wood, laminated board, wrought iron, processed wood and medium density fibre wood, particle board and rattan bamboo.

Most of these materials need to be imported. Of the wood, teak, gamari and hardwood come from Germany, Africa and Canada while Burma teak wood comes from Myanmar.