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Furniture Producers targeting 15 percent rise in export

Despite a general downturn in spending due to the global financial crisis, furniture and handicraft producers in East Java are eyeing an export rise of 15 percent this fiscal year due to a flurry of closures in the furniture industry in China

Agnes S. Jayakarna (The Jakarta Post)
SURABAYA
Fri, February 27, 2009

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Furniture Producers targeting 15 percent rise in export

D

espite a general downturn in spending due to the global financial crisis, furniture and handicraft producers in East Java are eyeing an export rise of 15 percent this fiscal year due to a flurry of closures in the furniture industry in China.

"We are lobbying former buyers of Chinese goods to commit to importing Indonesian products," Oetarjo Hariohoehojo, chairman of the provincial branch of the Indonesian Furniture and Handicraft Producers Association (Asmindo), told The Jakarta Post on Thursday.

He added Asmindo had become proactive in taking part in international furniture and handicraft exhibitions, both at home and overseas, to promote Indonesian products, and had invited many prospective buyers to view the furniture and handicraft industries in the province.

He said 40 percent of the country's furniture exports, worth US$2 million per year, came from East Java, and 35 percent of the products were exported to Europe, 29 percent to the United States, 9 percent to Japan and 37 percent to Africa and the Middle East.

"Gulf countries are still wide open to Indonesian furniture and handicrafts. And to improve the province's production, Asmindo will help furniture industries and plywood factories obtain green certificates from importer countries through the verification of legal origin (VLO) to improve Indonesian products' image in the environmental and labor categories," he said.

Data from the provincial indus-try and trade office shows Indonesia's furniture and handicraft exports reached US$456 million in 2005, rising by 4.6 percent to $477 million in 2006, then dropping to $355 million in 2007 and $345 million in 2008.

Meanwhile, the provincial Food and Beverage Association (GAPMMI) is conducting fortification and enrichment of food and beverages to meet the minimum standards in an effort to help the government fight widespread malnutrition.

Thomas Darmawan, GAPMMI East Java chairman, said several food and beverage manufacturers were now adding certain vitamins to their products, with the measure set to be compulsory in the future.

However, he admitted the fortification technology was still prohibitively expensive, and if producers were required to do this, then it would likely affect their sales volumes due to the increased production costs.

"We're still looking for a simple technology to avoid burdening consumers," Thomas said.

GAPMMI data shows 48 percent of the country's total population of 235 million people fall into the lower-income bracket, 40 percent in the middle-income bracket, and only 12 percent in the higher-income bracket with strong purchasing power.

Thomas called on the government to provide incentives for food and beverage producers to take part in the fortification and enrichment program to help enable the 100 million lower-income people afford the standard natural and canned food and beverages.

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