A worker arranges various kinds of half-finished furniture before it is sold to buyers in Ngabul village, Tahunan district, Jepara regency, Central Java, Friday (24/2). The handicraft and carving industry has been experiencing ups and downsand problems from raw materials to marketing. Furniture makers in Jepara have to obtain Timber Legality Verification System (SVLK) documents to enable them to penetrate the international market.
BANDUNG, KOMPAS — The country’s furniture industry is suffering a major slump. Due to the decline in competitiveness, Indonesia can no longer benefit from the comparative advantages of the country’s furniture products. The condition has threatened at least 2.1 million people, who depend on the furniture industry for a living.
"While Vietnam and Malaysia have successfully become major furniture exporting countries in Southeast Asia, Indonesia is losing its market due to a decline in competitiveness in the last two years. The government has not learned from the success of other countries,” vice chairman of the Association of Indonesian Furniture and Handicraft Industries (HIMKI) Abdul Sobur said in Bandung, West Java, on Wednesday.
According to HIMKI data, of the world’s 20 furniture exporting countries, Indonesia is ranked only 17th. Indonesia’s furniture exports totaled only US$1.93 billion in 2015. The figure dropped to $1.6 billion in 2016, and may further decline to $1.3 billion in 2017.
Indonesia’s exports were far lower than those of Vietnam, which reached $6.9 billion or of Malaysia, which totaled $2.4 billion in 2015. This situation should not have hit Indonesia.
According to Sobur, Indonesia has a larger forest area, huge human resources and a relatively good investment climate. However, with a lack of regulatory support, such as the lack of raw materials, difficulty in obtaining export licenses, and high lending rates, Indonesia cannot use the comparative advantages of its furniture products.
"The decline in the value of exports by $300 million from 2015 to 2016 has caused about 150,000 people to lose their jobs. That number will rise even higher if there is no improvement," Sobur added.
Weak policy
The chairman of the Foundation of Rattan Galmantro Tourism Village, Cirebon, H Solihin shared Sobur’s views. Currently, Indonesian rattan products are less competitive than those of Vietnam and China. The selling price of chairs free on board (FOB) in China, for example, can be 40 percent lower than the price of the same product in Indonesia. Indonesian furniture is more expensive due to a number of factors,from a lack of supply of raw materials to difficulties in obtaining licenses.
In rattan craft centers in Cirebon, the stock of the raw rattan in the warehouse is quite limited. Trucks and pickups at factories were just parked. "It has lasted more than a month. I\'ve met the suppliers, but raw rattan is not available," said Mimi, the owner Safira Rotan shop, in the village of Tegalwangi, Weru destrict, Cirebon.
In the warehouses, there is only a bale or about 80 kilograms of raw rattan. In fact, in a week, he usually spends at least 10 bales of rattan from Sulawesi and Kalimantan. "Not only that, the price of raw rattan has also increased from Rp 13,000 per kilogram to Rp 14,000 per kilogram," Mimi added.
Atang Suhendar, the marketing manager of CV Amelia Rotan, also complained about the difficulty in obtaining raw materials in the last two months. "Usually in a month, we can get three containers, or about 10 tons of raw rattan. Now, there is only one container,"said Atang.
According to the head of rattan and bamboo furniture division at HIMKI, Sumartja, the difficulties in obtaining raw materials could affect the existence of the rattan industry in Cirebon. Moreover, during the period between August and April, export demand for rattan products is very high, reaching more than 1,000 containers.
Sumartja said that the difficulties in getting raw rattan also occurred in the past. In 2006-2011, when raw rattan exports were still allowed, the domestic furniture industries suffered difficulties in obtaining the raw materials. "It is strange now. Although exports of raw rattan have been banned, the furniture industry still faced difficulties to get raw materials. The rattan prices at the user level continued to rise, while at the farmers level the rattan prices fell and the supply was all absorbed. Moreover, 85 percent of the world\'s rattan is in Indonesia," said Sumartja.
Raw material prices
The small-furniture industry and wood-carving in Central Java also are suffering a decline in their business. In addition to the rise in raw material prices, the number of craftsmen involved in the industry has also declined. In fact, in the district of Jepara, nearly 80 percent of the furniture companies have been out of business since 2010.
Based on Kompas’ monitoring in a number of centers of furniture in Jepara, until Friday, many furniture shops and showrooms have been closed or have switched to other business. Trading activities in furniture outlets are relatively quiet. Before 2008, trucks carrying furniture were almost everywhere. Now, such scenes are very rare.
Supomo, 74, an owner of a small furniture shop in the village of Karanggondang, Mlonggo district, Jepara, for instance, closed his business last year. "In early 2016, the prices of wood teak rose steadily and became unaffordable. Not to mention, the order was quite. Finally, I closed my furniture business," said Supomo.
Sumarno, the carving and craft group leader at the Furniture Creative Tourism Village (Dewinif) in Mulyoharjo, Jepara district, said the turnovers of the about 250 small artisans in the group have declined sharply in recent years. Now, the turnovers range only from Rp 5 million to Rp 20 million per week.
This figure is much lower than before 2008, which reached Rp 5 million to Rp 15 million per day or about Rp 100 million per week. Based on data from IMKI’s Jepara branch, In the 2010s, the number of businesses involved in the furniture and handicraft industry in Jepara and surrounding areas reached 5,000 units. Now, the number is only between 700 and 1,200 units of small, medium, or large businesses.
