Jakarta furniture sellers face dropping domestic, international sales after

The Jakarta Post ,  Jakarta   |  Mon, 06/08/2009 11:11 AM  |  City

Furniture sellers across the city are suffering from declining exports and domestic sales of wooden and rattan furniture, apparently caused by the global financial crisis.

Exports in January this year had dropped by 27.5 percent compared to the same period last year, Indonesian Furniture and Handicraft Association (Asmindo) director Sae Tanangga Karim told The Jakarta Post recently.

Exports would continue to decline until December, Tanangga predicted, dropping up to 35 percent compared to December last year.Domestic sales had also experienced a slight decline of 5 percent, he said.

"Vendors are also feeling the pinch of declining sales caused by the public's reduced purchasing power," Tanangga said. "Many people are prioritizing basic needs over furniture."

Even wealthy people are choosing cheaper products, he said.

"While people still appreciate local furniture, the rich may still prefer to buy foreign products which are cheaper," Tananga said, referring to imported Malaysian and Vietnamese furniture.

Antonny Karel, an owner of Nina Curios, a kiosk selling antique and furniture products in Ciputat, South Jakarta, said his exports had been stagnant since last year.

Previously Karel had exported containers full of furniture every three to four months. This year, buyers were looking for specific styles, he said, adding that basic shapes like squares, rectangles, and circles with simple designs were most popular.

However, Indonesia's products did not have the same standards of quality as those from Malaysia and Vietnam, and it was difficult for traders to compete with the foreign products, he said.

Karel has often exported furniture to Europe, North America and Brunei Darussalam, with each shipment worth up to Rp 70 million (US$5,924).

Tuban of Agung Jaya Rattan Furniture in Kalimalang, East Jakarta, also said his sales had been down. Tuban often exported products to Saudi Arabia.

"I haven't seen such big problems in exports as with my local sales, which have been down for the past few months," he said.

Tuban sells rattan products starting at Rp 900,000 for a set comprising one armchair, two couches and a table. He also repairs broken furniture.

Like Tuban, other furniture sellers in Kalimalang also complained about the declining local sales.

Hadi, a rattan furniture seller, said his sales had been declining for the past five months. Previously he had earned around Rp 17 million a month. "Now, I'm happy just to get Rp 7 million a month," Hadi said.

"Actually, this year's business has been the worst so far. While prices of raw materials have gone up, our rattan furniture prices have stayed the same," Hadi said.

Taufik, who sells bamboo blinds from his outlet, Karya Jaya Krey, said the declining sales were mostly caused by increasing costs of raw materials since last year.

Taufik had to strive to sell his products at prices that would allow him to make a profit, he said.

Ramdali, a carpenter working for Mandala Furniture, said his shop used timber from import containers, instead of expensive materials, to produce furniture.

"This is cheaper. This is our tactic to reduce our production costs," Ramaldi said. "We cannot use teak wood. It's too expensive."

Another carpenter said wood was becoming harder to find and more expensive, and carpenters could no longer rely on its availability.

Asmindo chairman Ambar Tjah jono regretted that the government had not better facilitated small and medium enterprises. The government had also provided limited access to funds for entrepreneurs.

"The global crisis has had various impacts on enterprises. Many have faced bankruptcy," Ambar said.

These enterprises provide job opportunities for local people, he said, adding that he did not agree with the term "small and medium enterprises" since it apparently discourages entrepreneurs from thinking big.

Small and medium enterprises, which account for the majority of Indonesia's entrepreneurs, need large orders to drive the economy, Ambar said.

While Indonesia is the world's largest rattan producer, it lacks a branding strategy, PT Indoexim International director Basuki Kurniawan said.

"Business factors, such as design quality, price and customer service also have an impact," Basuki said.

Many enterprises are not capable of yielding products that fulfill these factors satisfactorily, he said.

"Certain standards also have to be met, such as eco-labeling certification for environmentally friendly products made from tropical woods," Basuki said.

International buyers would not trust and eventually reject products without such certification, he said, adding that European countries charged thousands of dollars per year for such certification.

"Many small and medium enterprises cannot afford certification," he said, explaining why in Indonesia there are only a few certified furniture traders. (nia)

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