Indonesia: Bright prospects in furniture markets

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Panggah Susanto, Director General of Agro Industries within the Ministry of Industry (Kemenperin), is on record as saying within two years furniture exports could rise to US$5 billion as demand in the United States, Japan, and Western Europe picks up.

Currently the value of annual furniture exports is US$1.7 billion.

Much of the furniture exported from Indonesia is made from rattan and Paggah said rattan furniture production will be increased.

Kemenperin noted employment in the formal segment of the domestic furniture industry in 2016 was around 101,000 but this could double in a few years.

To boost rattan furniture production the Ministry of Industry is encouraging development of the furniture industry as it is a labour intensive sector and has decided to make Cirebon, a port city on the north coast of Java, one of the main centres for rattan supply and rattan furniture and handicraft production.

In contrast to the positive outlook from the Ministry of Industry, the Chairman of Association of Indonesian Furniture and Handicraft Industry (Asmindo) Mugiyanto said furniture manufacturers are facing challenges in international markets where sales of Indonesian furniture face tough competition and suffer from a poor image due to perceptions that illegal timber is being utilised.

Mugiyanto said to expand sales manufacturers need to be deliver innovative product designs and to expand outreach to address the negative perceptions of Indonesian wood products in international markets.

In the current trading environment Asmindo has suggested a focus on the domestic market as the building sector is very active with huge investments in family homes, apartments, hotels and office buildings where furniture will be needed.

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