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Comments

Mr.Sajid Manzoor’s comments

A comprehensive report on Furniture Industry in Pakistan and its

export status compiled by Kh.Javeed Iqbal is a herculean task not easy to

achieve.

Although by name it is industry but it has not been awarded the

proper status nor it has received the patronage of the Government in any

form. It is a unique line which comprises a two man factory to a factory

where hundreds of workers are employed. To collect the information and

compilation of data from such units can only be possible by a hardworking

and determined person like Kh.Javeed Iqbal.

Only a small percentage of entrepreneurs of this industry are educated

and still very few keep a proper record of production, sale and procurement

of raw materials etc. Transparent picture of this industry is not available

which could keep to enhance and upgrade existing facilities. As a

consequence professional development program of this industry does not

exist. There are four major furniture industry associates which are not

putting combined efforts to fight for their rights. They also do not see each

other eye to eye. The Government is therefore ignoring this industry easily.

The owners do not want to share the information to anyone about their unit,

as a matter of fact they mostly don't even allow to see their production unit.

Solutions to bring this industry on respectable pedestal are very wisely

recommended by the author. The Government should take these

suggestions in good spirit. If followed it could not only bring valuable foreign

exchange, numerous job opportunities will also be available for the youth of

Pakistan. Multiplying effect will be good both for public and private sector.

Sajid Manzoor

Ex-Consultant FPC,Govt of Pakistan

Ex- Project Director,Woodworking Service Centre,PSIC,Gujrat Ex-Project

Director Pak German Woodworking Service Centre,SIDB,Peshawer

Mian Muhammad Kashif Ashfaq

From: Mian Kashif Ashfaq

Sent: 31 March 2016 20:28

To: JAVEED IQBAL KHAWAJA

Subject: Fwd: Furniture Industry in PAK & Its Export

A very detailed and valuable research work which will sure help all relevant sectors to review their planning in connection with the development of Furniture sector in Pakistan. I have gone through the subject draft/report in detail, in my humble opinion, following also need to be incorporated and mentioned in report.

1. Pakistan Furniture Council, objectives are not properly covered, only mentioned that PFC is working for the development of Furniture Industry in domestic market through exhibitions. While its objectives cover many other areas, those should be mentioned.

2. For Furniture Education besides Wood Working Centers and other institutions, PIFD & NCA are also providing Degree Courses level education. The is the only institute offering Furniture Design & Manufacturing Program in the country. The Program is firmly based on contemporary design thinking, furniture manufactures and balance creativity with practicality. The Program has strong links with industry and during the course students will develop practical understanding of the material and processes adopted by small and large furniture

manufacturers. It develops independent and creative thinking through a series of intense projects, culminating in the exhibition of student's work. The course title reflects the importance of design linked with the practical processes adopted by furniture manufacturers, set within a business context.

3. Similarly National College of Arts, Lahore offers degree courses on Product Design & Development, providing quality Interior & furniture designers for the industry.

4. Another aspect that need to be projected is "Sustainable Forestry" as the Govt. should give it top priority to develop forests and curb the timber mafia in eliminating the forests indiscriminately.

Thanks n regards,

Mian Muhammad Kashif Ashfaq Chief Executive Officer Pakistan Furniture Council & ChenOne Stores Limited Lahore-Pakistan

Furniture industry in PAKISTAN

And its Export status

1. This study PFIMTEI (Pakistan Furniture Industry manufacturing, trade and export

information) will provide a brief overview of the Furniture Industry in Pakistan and its

export status. It covers current manufacturing status and key problems of this sector. This document is prepared based on the findings derived from relevant government bodies, and visits to different training institutes, furniture

manufacturing units, reports, policy papers, etc.,. This study briefly describes both domestic and global furniture industry, outlines challenges and opportunities in the

local industry and suggests measures to address them and provide a base to start furniture sector developmental activities.

2. Background:

The economy of Pakistan is the 26th largest in the world in terms

of purchasing power parity (PPP), and 41th largest in terms of nominal Gross Domestic Product. Pakistan has a population of over 190 million (the world's 6th-

largest), giving it a nominal GDP per capita of $1,427, which ranks 133th in the world.

The current population of Pakistan (Estimated-2016): 192,826,502 38.6 % of the total population is in urban area: 74,986,621 (people in 2016) 61.4 % of the total population is rural area: 117,839,881 (people in 2016)

Pakistan population is equivalent to 2.57 % of total world population. Pakistan ranked number 6 in the list of countries by population.

The population density in Pakistan is 250 per sq. kilometre (648 people per square mile) (Source: UN-DE&SA)

Primary completion ratio, both sexes (%): 73.1 % (2013) (Source: WB)

Total forest in Pakistan: 4.8 % of total land area (Source: FSMP)

The size of the Pakistani middle class is conservatively estimated at approximately 77 million, out of a total population of about 192 million. This represents 40 % of the population of the country.

3. Furniture industry in Pakistan: In Pakistan, Cottage, Small and Medium Enterprises (CSME) play a

significant role in the development of country economy, primarily by creating employment opportunities and producing important alternative mechanism for accumulating foreign currency through exports. The ability of CSME to grow the

industrial base and increase the volume of foreign trade has made them a national developmental priority, especially in terms of moving Pakistan to a more

sophisticated manufacturing base.

Pakistan has a long tradition in producing traditional style wooden furniture

and well known because of its artistic work. This sector is highly fragmented with 85 – 95 % of the manufacturing units belonging to the “Non Organized Sector”

with individual and copied design. The furniture sector only makes a marginal contribution to the formation of GDP, representing just a small percentage. Industrial clusters are spread across the country. Gujrat and Chiniot are the larger

furniture manufacturing (traditional style) cities, followed by Karachi, Lahore, Sargodha, Rawalpindi and Peshawar (Sargodha because of Lacquer art work

“SILLANWALI”).

3.1 FURNITURE CLUSTER: Available data about these clusters in terms

of total manufacturing units and employments are listed as follows:

3.1.1: CHINIOT CLUSTER: This cluster is well known for its master

crafted furniture mainly carving. Chiniot is the main HUB for producing wood carved furniture for BEDROOM, DINING ROOM,

LIVING ROOM, as well as CHILDERN AND KITCHEN. Over 3300* manufacturing units exist in this cluster whereas around 40,000 people are directly attached to this sector. (*Source UNIDO)

3.1.2: GUJRAT CLUSTER: Gujrat is famous because of its solid wood

furniture. Furniture trade is developing gradually, but the manufacturing units are still 35-40 years old working style affecting their performance. Around 350* plus manufacturing units exist in this

cluster. Around 7000 people are directly attached to this sector. (*Source PSIC-But very old data)

3.1.3: SARGODHA CLUSTER: This cluster is famous because of its LACQURE ART WORL “SILLANWALI”. Around 207 units exist in this sector with 1,020 workers. (*Source Sargodha Chamber of Commerce and

Industry)

3.1.4: RAWALPINDI CLUSTER: This cluster is mainly to import goods

from Chiniot and Gujrat. Around 2000 units exist in this cluster and around 50,000 people are directly attached. (*Source SMEDA)

3.1.5: PESHAWER CLUSTER: 208 registered units are available in this area but no update data are available (Source: P. Ministry of Industry-

very old data)

3.1.6: LAHORE CLUSTER: The Lahore cluster is basically traders of

wooden furniture. There are more than 1,500 retail shops engaged in trading office, bedroom, living room, dining room and kitchen

furniture. These traders usually purchase furniture in semi-finished form from Chiniot, Gujrat and polish, and then upholster it in their workshops. However, there are around 100-200 small cottage sized

workshops in Lahore and they are engaged in wooden furniture manufacturing. Majority of these manufacturing units use low-tech

machinery/tools which are either locally made or second hand imported machines. However, some furniture manufacturers have established a production line based on new modern machinery and

seasoning kiln facilities like Interwood.

At present there are around five large local clusters of furniture

markets within Lahore i.e., Fortress Stadium, Gulberg, Allama Iqbal Town, Ferozepur Road and Multan Road. These markets mainly cater

to the needs of the domestic market. Because of the poor finishing quality and inferior packaging the exports are not existent or negligible (Source: http://furniturekingdom.blogspot.com/).

3.1.7: KARACHI CLUSTER: No data is available.

3.2 FURNITURE SECTOR PERFORMANCE

The furniture performance is crucial to both employment and growth. Most units depend on traditional methods based on labour intensive

technology resulting in low productivity and below standard quality. There are about 8,000 plus wood manufacturing units in Pakistan, less than 1 %-

approximately 80 Manufacturing units (J.E. Austin Associates, Inc May 31st, 2008) use properly seasoned wood and have modern machinery to some extent.

Majority of the furniture workshops are small in size, and use labour-intensive production methods. Competitive edge is derived from high-skilled carving of traditional designs. Pakistan competes with countries like China,

India, Vietnam, Malaysia and Turkey. Especially China and Vietnam are concentrating their industries on larger bases and reap the benefits of mass

production to the extent possible. If Pakistan wants to switch from small cottage industry status into SME networking culture, it will be a challenge to

adopt novel designs, technologies and formalize training of workforce, none of which is currently the norm. On top of these major challenges is production which needs to be in line with international standards.

Furniture production enterprises in Pakistan are estimated to be that approximately 85-95 % are cottage and small sized. As a result, there

are hardly any brands with strong influence in the global market. However, after years of competition, a number of branded enterprises with a certain

scale and considerable strength have emerged. Examples include Interwood, Workman, National Furniture, NM furniture, Decent, Trendline, ChenONE etc. etc.

It is important to remember by the Pakistan furniture industry that quality is not represented by the amount of work done on a product but

rather the workmanship employed. So, customer satisfaction is based on the following criteria:

A quality product that will give no problem.

Products to be priced properly and represent a value (a reason to buy)

Functionality (not only a piece of art)

Good looking (finish appears perfect)

The problems of furniture manufacturing sector, in general, can be

grouped as follows: a. The resource scarcity for both, raw materials and human

resources.

b. Huge shortage of skilled workers. c. Absence of the usage of modern technology.

d. Poor physical infrastructure. e. Financial constraints. f. Lack of entrepreneurship skills.

g. Limited access to market information & branding. h. Lack of quality assurance.

i. Lack of commitment from large enterprises to support

CSMEs to Grow.

Considering the global demand and supply trend of furniture, the local market size as well as track records on production and comparative advantages the sector possess, wooden furniture as a sector has immense

potential to become one of the important foreign currency earning sources of the country. To achieve so, certain constraints and problems have to be

addressed and solved. Pakistan furniture industry is still based on small workshops with

traditional tools, whereas the world is switching towards “smart and green production”. Major exporting countries are facing fierce competition,

sluggish economy and rising production cost. Wood machinery enterprises as well as manufacturers are urged to upgrade and transform via enhancing production efficiency. So in this case Pakistani furniture sector with its

present workshops culture is unable to compete with international players.

For Pakistani furniture industry, it will be difficult to compete against Asian furniture giants. The industry acknowledges that its main obstacles in fact are unsustainable wood resource handling, improper wood seasoning,

static design, lacking production innovations, proper design preparation, proper production drawings, skilled force training, sub-standard technology,

finishing and packaging. Now it is the time to move forward for upgradation of manufacturing units if Pakistan furniture industry wants to make its place on international rostrum.

3.3 FEARS OF PAKISTANI FURNITURE INDUSTRY

Against the total world trade of furniture during 2010-2015, the

Pakistani share is almost trivial beside the fact of having a history in craftsmanship, it does not share a significant position in international wooden furniture market.

Domestic furniture industry is also suffering because imported furniture is expanding day by day. During 2014-15 Pakistan has imported

wooden bedroom furniture worth of $ 2.363 million-HS 9403503 (table-3), whereas Pakistan has exported products in the same category during the same period worth of $ 0.639 million (Table-4). High cost of the furniture

business is also a major problem for the local manufacturers, the prices of raw material which includes wood, paints, man-made board, veneer, foam,

fabric and Hardware etc. have been increased manifolds which becomes the reason for rising cost and low output.

3.4 PAK FURNITURE INDUSTRY CLASSIFICATION

Furniture is essential to almost every household. Beautiful and comfortable furniture can enhance the quality of life and create the cosy atmosphere that makes a house a “HOME”. On the basis of the quality and

style, Pakistan furniture industry can be classified into three groups:

3.4.1 TRADITIONAL CARVED FURNITURE

This type of furniture is normally fashioned from solid sheesham

wood or walnut. In all cases a great deal of hand carving is carried out.

3.4.2 CONTEMPORARY SOLID FURNITURE

This type includes all units, not classified as traditional, and

includes all products from solid wood. This includes tables, chairs; European style furniture belong to this type.

3.4.3 PANEL PRODUCTION

This type of production is classified by the nature of raw material

used in construction, normally chipboard, medium density fibre board, impregnated board, plywood, block board etc. Such a

production is growing in Pakistan.

3.5 PAKISTANI CONSUMER GROUPES

In Pakistan, as living conditions continue to improve, people become more and more willing to invest in home interior. People’s purchasing power

has driven the furniture market to develop in leaps and bounds. Pakistani furniture consumers can roughly be divided into three groups, namely,

1: High End consumers/luxury/branded goods consumers, 2: Middle class consumer

3: General wage-earning consumers. Pakistani furniture industry is divided into, according to product type:

1: Wooden furniture manufacturing,

2: Steel/wooden Furniture, 3: Metal furniture manufacturing,

4: Plastic furniture manufacturing, 5: Miscellaneous furniture manufacturing.

4 TRAINING/SERVICES

4.1 Training in wood technology started in Pakistan as early as 1957 when

an institute “SWEDISH INSTITUTE” in cooperation with Royal Swedish Government was established in Karachi. This Institute’s main objective was to offer 3-year diploma in both cabinet making and joinery work.

This institute has contributed a lot. At present no such courses offered by the institute

4.2 In 1971 another institute “Pak German Woodworking Institute” was established with the assistance of Federal Republic of

Germany to offer services in five areas: 1: 2 years diploma in wood technology,

2: 1 year advance training on job, 3: Common facilities and extension services,

4: On factory floor production facilities for private sector,

5: On factory floor training services for private sector, 6: Transfer of technology by copying imported machines.

In the first 15-20 years, the centres was very good in achieving its target, but later on, this centre’s major objective was commercial production, instead of focusing on training and extension service.

4.3 TEVTA-PUNJAB

In 1984, Punjab Small Industries Corporation in cooperation with World Bank established a “Wood Working Service Centre, Gujrat” (Now working under TEVTA Punjab) with an objective to train

manpower by offering: 1. 2 year wood technology diploma

2. On factory floor training, 3. Common facilities, Extension services, Advisory services 4. Soft loan scheme.

At present this centre imparts 2 year training in cabinet making, but at a much lower level. Now their main objective is commercial production,

instead of training or helping private sector to overcome on the problems faced by them. Recently TEVTA has taken bold step by upgrading the wood working service centre Gujrat, Rawalpindi and Kotaddu with latest

machinery but reports are not supportive to furniture industry on technical terms.

4.4 PUNJAB SMALL INDUSTRIES CORPORATION

At present one unit “Woodworking Facility Centre, Chiniot is in

operation. This unit was setup by PSIC in 2004 to help local woodworking industry to get seasoned wood for their products on competitive price so

that they could reach international markets. As per available data, centre performance is summarized as below:

a- 2004-05 3487 cubic feet wood

b- 2005-06 8345 cubic feet wood c- 2006-07 6328 cubic feet wood

d- 2007-08 1730 cubic feet wood Due to load shading, maintenance cost, overheads and direct

seasoning cost has effected the centre performance.

4.5 Furniture Pakistan Company

(FPC) was formed by the Government of Pakistan for the development of furniture industry in Pakistan with following objectives:

To prepare a comprehensive strategy for the development of Furniture Sector of Pakistan.

To benchmark Pakistan Furniture Industry with International

furniture market. To provide awareness about competitive factory management and

production techniques to local Furniture Manufacturing Industry. Understanding market trends with respect to pricing/margins,

designs, materials etc.

Understanding workforce skills required for sustainability and competitiveness of the Industry.

FPC have started two training centres in Chiniot and Sargodha where they offer three-month carpentry training. They have equipment, but no one there to operate the CNC centre. Offered training is of no use

till the preparation of a proper curriculum which has to be as per the requirement of private sector. Trainer‘s own training level is in

question. On the other hand, proper furniture design element is totally ignored

by all the technical institutes; only rudimentary knowledge is

imparted. Vocational training in the country is far from the acceptable standards and so is higher technical education. Very little or no

opportunities are provided for practical training. Theoretical education

is of very low quality. The output of these institutions cannot be of any great help to the industry.

Centre of Excellence means that centre should improve the availability and relevance of training programs. Now after the establishment of Centre of Excellence in Sargodha this becomes

responsibility of the FPC management to go through the performance of the centre and to take necessary measures to make this centre

useful. Seven seasoning plants has been established with overall cost of 7.00

million pak rupees but no use.

5. CHALLENGES

The challenges hindering powerful sector expansion include industry

fragmentation, limited external capital and financing options, low labour

productivity and limited quality control. To capture its growth opportunities, the industry must make comprehensive and coordinated efforts to increase its scale of production and devote significant resources to marketing the “Made in

PAKISTAN” brand in global, particularly European and USA, markets. Despite the industry’s particular promise and emerging strength, growth in

Pakistani furniture sector remains stunted by several factors: Fragmented industry with very limited number of large players, mean

limited financing options to ensure appropriate development. Lack of scale and visibility for furniture industry and related activities,

prevents international buyers from putting Pakistan on their list of

supplying countries. Limited quality appreciation and perceived variance in goods produced.

Low labour productivity, greatly reduce this sector’s overall cost advantage on labour

The major challenges faced by furniture cluster are:

Supply of seasoned wood. Un-certified material for home usage.

No standard available for furniture, nor for material. Furniture design limitations. Low level of training facilities.

Shortage of skilled manpower.(PM,FD,ACT,SL,MO) Low productivity.

Low product quality. Inadequate production technology. Sale, Distribution and Marketing problems.

Electricity problem

6. PK FURNITURE INDUSTRY CHARACTERISTICS

In general, the following characteristics describe the furniture industry in

Pakistan:

Furniture industry is fragmented and composed of units widely

ranged in size. At one end is a family affair shop with less than 5-10 workers producing few furniture items each month, at the

second end are factories employing more than 50-100 workers having the capacity to process furniture worth 1.00 million to 5.00 million per month ( value depends on type of furniture).

The existing technology also varies ranging from hand tools level

to semi-mechanized factories equipped with basic and modern woodworking machinery.

Product specialization and serial production of furniture is

available only in a few units (Less than 1%).

Quality products usually correspond to the minimum quality level in the local market, but this would hardly find acceptance in the

international market.

Productivity in general is low as a result of antiquated production techniques being used, poor machinery layout and poor housekeeping practices.

Formal product packaging is almost totally absent.

Up-to-date reliable data about furniture industry as a whole is hardly available.

Lack of competent Furniture Designers, Product Designer/Engineers, Plant Managers, Quality controller, Machine

operators and Supervisors are hardly available.

7. FURNITURE INDUSTRY MAJOR ISSUES/MAIN PROBLEMS/ TECHNICAL AND MARKETING PROBLEMS.

7.1 MAJOR ISSUES

The typical picture of furniture industry today in Pakistan indicates that

any significant stride towards the development of this sector can be attained only after the resolution of the following issues.

Inadequate knowledge and awareness about drying and preserving timber.

Unavailability of easy and sufficient quantities of seasoned and treated timber in market.

Unavailability of standardization, design, work preparation and

industrial engineering.

Investment in human resource development is zero.

Poor design presentation, limitation of designing methods of furniture and other wooden products.

Insufficient usage of modern machinery and lack of knowledge

about technical operation of machines.

The proper selection and judicious acquisition of production and

supporting machinery and equipment, their layout and installation using accepted engineering practices.

The introduction and development of manufacturing techniques which lead to better stabilization, higher level of precision in

machinery operations and better protection of finished products,

while being transported to the market, all of which contribute to better use and longer service life of the wooden products.

The development of smaller and lower cost timber drying facilities to ensure that all manufacturers are using seasoned

wood (not like the way Furniture Pakistan Company has done)

The introduction of workable quality system, production and

inventory controls and their gradual development to suit the available local resources and conditions.

Difficulty in securing finance from public and private sectors, especially long term credit.

Acute need for working capital.

Absence of career guidance programmes on wood related industries for school leavers.

Tax concession for raw material, paints and hardware.

Lack of proper training institutes for required skills nor any institute available for trainer especially for wood technologist.

Power supply.

7.2 MAIN PROBLEM AREAS:

a) Low level of technology.

b) Low mechanization.

c) Lack of latest technology.

d) Relatively small and traditional products range.

e) Low level of quality control.

f) Un-availability of standards.

g) Low labour productivity.

h) Un-availability of proper training institution with latest

technology and trainer.

i) Lack of real incentive for labour.

j) No work preparation concept and cost calculation system.

k) Lack of workshop organization and control.

l) No safety measures inside factory.

m) Too many sub-standard units, confuses the market.

n) Low investment in machinery, equipment, design and R&D.

7.3 TECHNICAL PROBLEMS:

a) Absence of steady supply of good quality materials.

b) Improper control of moisture contents due to the non-availability

of seasoning kilns and storage facilities.

c) Inefficient production process.

d) Obsolete equipment and machinery.

e) Absence of quality control procedures.

f) Lack of technical manpower and know-how.

g) Lack of apprenticeship training program within factories.

h) Shortage of skilled labour.

i) No proper training institute with proper trainer and curriculum.

j) Total disregard of furniture designers.

k) No standard exists nor is followed.

l) Too many sub-standard units confuses the market.

m) Low quality of product.

n) Uneven quality among items in the same batch.

7.4 MARKETING PROBLEMS

a) Poor distribution of network, limiting marketing to surrounding areas.

b) Lack of knowledge for export distribution.

c) Disorganized industry, resulting in absence of trade information

and specialization in product lines

d) Difficulty in securing finance from public and private sectors, especially long term credit.

e) Acute need for working capital especially when engaged in

domestic or export supply.

8. ASSOCIATIONS IN FURNITURE SECTOR

The organizations involved in the furniture sector are: 1. Furniture Pakistan Company-FPC (Govt. of Pakistan)

FPC- Furniture Pakistan Company was established by the Govt. of

Pakistan (2007) for the promotion/development of furniture industry and enhancement of wooden furniture export

2. Pakistan Furniture Council-PFC PFC-Established in 2011 as a non-profit organization with the objective to promote furniture trade in Pakistan by organising exhibitions.

3. All Pakistan Furniture Export Association-APEFA APFEA has served as a registered body since May 2008. Furniture traders

are members of this group. 4. All Pakistan Furniture Maker Association-APFMA

APFMA Very old association working for the uplift of furniture

manufacturing sector.

Note: No data is available on furniture maker regional associations. More than 8,000 manufacturing units are in operation all over Pakistan. No data is

available for furniture traders/showrooms and total furniture exporters. All the above associations are engaged in development activities for the sectors, but efforts are not fruitful.

9. DEGREE AWARDING INSTITUTES:

At present two institutes are offering 4 year degree program in product and furniture design.

1- National College of Arts Lahore: Mostly they are producing

creative designer whereas market demand is for industrial furniture designer or a designer with manufacturing knowledge as well.

2- Pakistan institute of Fashion design: They are offering 4 year

degree in furniture design and manufacturing but with very poor

facility where no one have Furniture design, manufacturing, technology and management back ground.

9.1 No institute in Pakistan offers DAE in Furniture design,

Furniture manufacturing or cabinet making.

10. Global Overview of Furniture Industry.

The furniture industry around the world is undergoing a period of rapid globalization and this trend will continue during this decade as larger domestic

manufacturers in developed countries continue to import furniture and furniture parts in an effort to meet the demand for lower-cost quality products. With the

rapid globalization of the furniture industry and the competitive pressures of imports, Pakistan furniture industry has to find a way to stay competitive. Also it is

difficult for small workshop culture in Pakistan to compete against Asian furniture giants.

Pakistani furniture manufacturers face a number of constraints that limits their capacity in operating in the export market. Some of these issues are explained as follows:

10.1 DESIGN AND QUALITY:

The most obvious weakness of the PFM lies in the area of product design and quality. PFM are very much aware of this problem, but

appear to be struggling to devise effective responses. No concreate efforts of FPC (Govt. of Pakistan) yet has been acknowledged by the

private sector in this regard.

10.2 PRICE:

In the competitive global furniture market, the issue of price cannot be separated from the issue of Design and quality. Everyone in Pakistan

attached to this sector regularly raise this fact that Pakistani furniture prices are not competitive in international market. Low

competitiveness industry is mainly due to the following factors:

Technological innovation in the domestic industry has lagged

behind competing countries and the industry consequently struggles to be competitive against countries that have made

sufficient investments in their technology. This is shown by declining rate of investment in the sector and the age of machinery.

Shortage of skills (technical capabilities) is an important constraint in competitiveness – a problem that cuts across most

of manufacturing sector. This is in terms of manufacturing as well as design capabilities. Apart from generic training on design, Pakistan lacks furniture design institution specifically geared

towards the furniture design and technology. The industry accordingly lags behind most major furniture manufacturers in

design education. Urgent steps needs to be taken to address this matter since Pakistani furniture needs to compete on quality with top global furniture manufacturers.

Research and development needed to support the industry is almost non-existent. Competing countries have constantly

improved their research capacity. Increased imports from Asian countries are making it almost

impossible for the local furniture industry to compete. As a result, the industry is experiencing difficulties and continuous job losses. There is a need for measures to be implemented, that will be

aimed at assisting the local industry to relieve the pressure from imports and to have a fair chance when facing the fierce

competition from these countries. Whilst it is important to constantly improve the industry’s competitiveness, it is understood that Pakistan should not seek to compete at low

price/quality level, but should rather focus on quality, reliability and differentiated designs. Present price structure of China made

bedroom furniture for reference is available at annex-A.

10.3 LACK OF MARKET INFORMATIONS:

PFM, attempting to operate in the export market are facing a number of difficulties. The most obvious export hurdles are:

There has been acute shortage of good raw material as wood is the natural commodity.(Sheesham wood detail available

annex-B) The customer demand for high quality of products at higher rate for which the exporters need to procure best quality of raw material to ensure quality specification and to meet

customer’s expectation.

For technology up gradation and modernization, huge capital and resources are required which is difficult for cottage, small and medium size exporters.

Pakistan is still lacking in developing proper marketing

strategies to penetrate the international market and to sustain against cut throat competition, as exporters need to have united efforts to meet every-changing market challenges.

Complex problem of understanding the varying demand of a

number of foreign markets.

US market actual requirement, designs pattern, materials and

finishing.

German market regarding the variance in wood colours.

EU market regarding the suitable sizes for smaller European

homes.

Ecologically friendly finishing process.

Material certification/Product certification (wood MC, artificial board glue suitability for interior, finishing detail etc.)

Sales agent office in export market for PK furniture products.

“MADE IN PAKISTAN” name recognition in foreign market.

10.4 PFM’s CAPACITY:

A big problem of operating in the export market is that of matching

manufacturing capacity. Major industry based on cottage and small have insufficient capacity to fulfil the export requirement till the

upgradation of entire manufacturing system.

10. WORLD FURNITURE EXPORT PERFORMANCE

Developed countries, led by Italy, Germany and Canada were traditionally been the main producers, and exporters of furniture, only in the last ten years they

have faced fierce competition from developing countries especially China (and to a

lesser degree Malaysia, Vietnam, Indonesia and Turkey as well). In 2014, the value of global furniture exports in the furniture sector

amounted to over US$244.6 billion. China was the leading exporter of almost 38.2 % of global furniture exports worth US$ 93.4 billion. The Chinese furniture industry has gone through a period of tremendous growth. In 1990, it did not feature in the

top ten exporters, while in 2000 China was the world’s 9th largest exporter and 1st in 2006 till now remain on top. Table-1 below shows top ten leading exporters in

2014 (top ten global exporters): S.No Country Export - USD % of world export

01 China $ 93.40 billion 38.2 % of world furniture export

02 Germany $ 18.20 billion 7.4 % of world furniture export

03 Italy $ 14.40 billion 5.9 % of world furniture export

04 Poland $ 11.90 billion 4.9 % of world furniture export

05 Unites States $ 11.80 billion 4.8 % of world furniture export

06 Mexico $ 9.70 billion 4.0 % of world furniture export

07 Viet Nam $ 6.70 billion 2.7 % of world furniture export

08 Canada $ 4.90 billion 2.0 % of world furniture export

09 Czech Republic $ 4.40 billion 1.8 % of world furniture export

10 Netherlands $ 4.20 billion 1.7% of world furniture export Top Furniture Exporter 2014-Source: world richest countries. TABLE-1

52%

10%

8%

7%

7%

5%

4%3%2%

2%

Export

china

Germany

Italy

Poland

United states

Mexio

VietNam

Canada

Czeck Republic

Meatherlands

The US demand for furniture is increasing; in particular, imports from China have been rising. In 2009, the total US import of furniture was $19.733 million and

export of furniture was $ 3.082 million. Whereas in 2014, the total US import was $ 30.560 million and export was $ 4.789 million (source-SWST-Purdue university-Top 10 largest

source countries of US Furniture import and export).

11. TOTAL PAKISTAN IMPORT/EXPORT DURING 2014-15

Before getting import and export data of Pakistan furniture industry, it is important to understand Harmonised System (HS) code that defines furniture industry. 94 code belongs to FURNITURE, BEDDING, CUSHIONS, LAMPS &

LIGHTING FITTINGS NESOI, ILLUMINATED SIGNS, NAMEPLATES & THE LIKE, PREFABRICATED BUILDINGS. 94 sub code is detailed as follows:

HS CODE DISCRIPTION

940310 METAL FURNITURE USED IN OFFICES

940320 Other Metal Furniture

940330 WOODEN FURNITURE USED IN OFFICE

940340 WOODEN FURNITURE USED IN KITCHEN

940350 WOODEN FURNITURE BEDROOM

940360 OTHER WOODEN FURNITURE

940370 PLASTIC FURNITURE

940380 Furniture of Other Materials Including Cane, Osier or Bamboo

940390 Parts of Beds, Desks, Stationery Chests, Dressers or Other Furniture

940410 Mattress supports The total Hs-cod table-2

11.1 TOTAL PAKISTAN IMPORT 2014-15

During 2014-15, the total Pakistan wooden furniture import (cumulative assessed value) was $ 5,066,652.73 (HS-9403300 /9403503

/9403400/9403600) whereas metal furniture (HS 9403200/9403100) import reached $ 1,905,447.92 million (Table-3).

HS CODE DISCRIPTION AMOUNT

9403300 WOODEN FURNITURE USED IN OFFICE 1,102,307.48

9403200 OTHER METAL FURNITURE 1,327,257.92

9403100 METAL FURNITURE USED IN OFFICE 578,190.00

9403503 WOODEN FURNITURE BEDROOM 2,362,179.71

9403400 WOODEN FURNITURE USED IN KITCHEN 548,501.08

9403600 OTHER WOODEN FURNITURE 1,053,664.46 Pakistan total import 2014-15- Source: TDAP/PBS-Table-3

1.102

2.362

0.548

1.053

9403300 9403503 9403400 9403600

import

import

11.2 TOTAL PAKISTAN EXPORT 2014-15

During 2014-15, total Pakistan wooden furniture export was $ 6,831,892.25 (HS-9403300 /9403503 /9403400/9403600) whereas metal furniture

export reached $ 134,953.23 (HS 9403200/9403100) million.

HS CODE DISCRIPTION AMOUNT

9403300 WOODEN FURNITURE USED IN OFFICE 1,008,279.00

9403200 OTHER METAL FURNITURE 97,526.64

9403100 METAL FURNITURE USED IN OFFICE 37,426.59

9403503 WOODEN FURNITURE BEDROOM 639,822.11

9403400 WOODEN FURNITURE USED IN KITCHEN 121,138.84

9403600 OTHER WOODEN FURNITURE 5,062,652.30

Pakistan total export 2014-15- Source: TDAP/PBS-table-4

Tables 3 & 4 show that there is too much pressure on local manufacturers

because of imported bedroom furniture. Total import during the year 2014-15 for bedroom furniture was $ 2,362,179.71, whereas export was only $

639,822.11(9403300/9403503/9403400/9403600). Other wooden furniture under HS code 9403600 was very encouraging which reaches $ 5,062,652.30 million during 2014-15 and this part need a complete study of items for the betterment of this

part through which export could be enhanced in coming years.

Pakistan wooden furniture export $ Millions 96-2001 1996-97 1997-98 1998-99 1999-20 2000-01

1,558 2,212 3,017 3,758 3,754 Source: SMEDA-table- 5

Table-5 Source: SMEDA

Table-5 shows a continuous upward trend in wooden furniture export from 1996 to 2001.

Pakistan wooden furniture export $ Millions 2006-15 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

18.160 8.516 4.306 4.873 5.134 6.889 5.372 5.586 7.254

(Wooden furniture without Bedding and mattress. Source: TDAP/PBS Table-6)

From 1996 to 2001, we have noticed a continuous upward trend in Pakistani

wooden furniture items. However, from 2006 to 2010, there is a drastic export fall

from 18.160 million to 4.306 million. Export was slightly improved in 2014-15, but not the same as that in 2006-07.

Our export data shows that we were unable to export our wooden furniture items direct to whole sealer or a chain or store. Our clients were individuals that is why our growth in export was dropped 12. FINDINGS:

Major Findings are as follows:

Furniture manufacturers are spread across different regions of Pakistan

and there are seven clusters with sizeable number of manufacturers,

namely Gujrat, Chiniot, Karachi, Lahore, Sargodha, Rawalpindi and

Peshawar. Main furniture manufactures are in Gujrat and Chiniot

districts. Sargodha a small cluster famous because of its lacquer work.

Except 10 to 15 main manufacturers all over Pakistan, the remaining

furniture manufacturers actually belong to cottage and small industry

categories.

Domestic market is quite big (estimated 50 times bigger than total

wooden furniture export) and growing every year.

Country’s total wooden furniture export during 2006-2007 (table-6)

was 18.160 USD millions where as in the last fiscal year (2014-15), total export was 7.254 USD millions which is very insignificant.

There is a significant knowledge lack on the export market demand

and trend, among the manufacturers as well as furniture traders.

Most of raw material/hardware (wood, veneer and hardware) required are imported. Import duties for raw materials/hardware are quite high which makes product price high.

Properly seasoned timber/wood is not available for furniture manufacturers as service provider for seasoning is not available, which resulted in poor quality assurance. Furniture Pakistan Company (Govt.

of Pakistan) so far failed in achieving its targets for the establishment/operation of seasoning plants in private sector. The idea

for the establishment of seasoning plant in private sector was the need of time but project conceived and implemented by FPC was wrong.

There is no sustainable supply of skilled manpower to the sector and most are trained on the job, as there is no efficient training facility in

operation, which increases production lead-time, reduces product quality and increases the cost of training.

Working conditions in manufacturing units are poor, which stimulates a permanent drain of skilled workers.

Labour cost in furniture manufacturing is comparatively low than those of competing countries. In other Asian furniture exporting nations

(China, Vietnam, Thailand, Malaysia), the cost of labour is higher than that in Pakistan. Details are as follows:

I. PAKISTAN 13000 Rs USD125 PER MONTH

II. CHINA 2020 CNY USD309 PER MONTH

III. VIETNAM 3.5 M.V.DONG USD155 PER MONTH

IV. MALAYSIA 900 MYR USD260 PER MONTH

Manufacturing is mostly based on traditional tolls and old machinery

which is the major reason of poor quality besides season wood issue.

Marketing facilities for cottage and small manufacturer are inadequate in the country. They are forced to sell their products at low price in the hand of middle man. Even they cannot afford to advertise their

products in any media because of low capital.

Most furniture manufacturers lack adequate knowledge on up-to-date technologies needed for high productivity and quality.

Woodcarving is the prime unique technique of the local carpenters working in this sector but no future training program for this skill.

Most of the factories lack efficient layout and material flow, which

affects productivity, lead-time and overall quality. Due to lack of well-integrated production process furniture manufacturers are not capable of achieving optimum production efficiency.

Overall quality of produced furniture by cottage and small scale

manufacturers are far behind than the requirements of the export market.

Almost all manufacturers severely lack accounting, management and marketing skills.

Awareness and application of environment and safety compliances are

absolutely absent in majority of the manufacturers.

All the furniture manufacturers produce very wide range of products in their production facilities, which is a big hindrance in achieving high productivity and optimum quality.

Cottage and small scale manufacturers do not have access to the

formal sources of finance at all.

Due to high duties of imported raw materials and low productivity

resulted from low labour skills, inability of affording machineries, most small scale manufacturers find difficult to survive in the business.

There are no capable design professionals available to provide design

solutions to the manufacturers, as there is no design training centre or

formal education on design in the country. The manufacturers don’t undertake R&D activities in any way.

There are no visible effective export marketing initiatives in the sector. The world furniture buyers even don’t recognize Pakistan as a possible

source for furniture. Here Furniture Pakistan Company (Govt. of Pakistan) also seems failed to achieve its target in connection with the

enhancement of Export.

Other wooden furniture under HS code 9403600 was very encouraging which reaches $ 5,062,652.30 million during 2014-15, and this part need a complete study of items for the betterment of this part through

which export could be enhanced in coming years

Association attached to the sector are not properly organized which is also a reason for this undeveloped sector. At present the following Associations are in operation:

I. All Pakistan Furniture Maker Association APFMA

II. All Pakistan Furniture Export Association APFEA

III. Furniture Association of Pakistan FAP

IV. Pakistan Furniture Council PFC

All associations are halfway organized and in operation but lack

capacity and resources to deliver support in technical, marketing and

managerial skills development. The APFEA and PFC severely lack

cooperation linkages with foreign trade bodies, and relevant institutes,

requires formulating efficient action plans for the development of

export business.

To channelize manufacturers to greater quality standards and newer

designs, technology and to showcase Pakistani furniture manufacturers, all

relevant associations of furniture sector must be strengthened to bring

together manufacturers/traders/exporters of furniture in Pakistan and create

value based improvement opportunities. All relevant associations has to

ensure that Pakistan furniture industry has:

To give the customer world class products.

To put the Made-in-Pakistan brand for furniture on global map.

Work for the improvement of quality, design and safety

standards.

Statistical data and generation and management data.

Knowledge enhancement through alliances with other furniture

associations and institutes globally

Establishing laboratories/libraries.

Representations of furniture sector with Government.

Sponsor research and development on usage of new materials.

Showcase Pakistani furniture through collective participation at

international as well as local exhibitions.

Enhance furniture design technical training capabilities through

better interaction and sponsor various design and technical

institutes.

Introduction of factory training institute with the help of

government.

Must act as a platform where all members interact and exchange

trends in the industry.

FPC so far has established three projects in the field detail as below:

A-seasoning plant 7 No

Object for the establishment of these seasoning plant was to ensure

availability of quality wood for production, which will increase trade. But on

ground results are different. Out of 7 seasoning plants not a single one is in

working condition from day first of its installation.

B- CEFWA Centre of Excellence for Wooden Arts Sargodha

Failed to understand the reason for the establishment of centre of Excellence

in Sargodha. Performance so far is very poor.

C- Common Facility Training Manufacturing Center Chiniot.

Up till now a big failure of FPC.

13. POSSIBLE SOLUTION FOR THE UPGRADATION of PFI.

The impediments to the improved performance of Pakistani manufacturers on export and domestic are as follows:

POOR DESIGN POOR QUALITY, ESPECIALLY IN MATERIAL, CARPENTRY & FINISHING. SKILLED WORKERS

HIGH PRICE/COST THE DIFFICULTY OF EXPORT MARKETING

CAPACITY ASSOCIATION’s ROLE.

The root cause of these problems lies in many of the same areas where Pakistani furniture industry face constraints:

Technology availability & management

Skill availability

Training

Access to finance Marketing arrangements

Distribution services

To overcome the above mentioned problems, some possible solutions are as

follows: A. DESIGN: Poor design could most obviously be dealt by employing a full time

furniture designer with ongoing exposure to international trend. In addition, both value-adding features and better finishing are critical aspect of improved product design.

B. QUALITY: The quality of furniture is determined by professionalism in the handling of raw materials, production techniques and manufacturing process.

Due to insufficient skills and facilities, as well as the lack of quality standards and QC inspections, quality is bound to suffer. Dealing with the problem of poor quality requires a multi-faceted approach. New and improved machinery

and particularly automated finishing plants would seem to be of some importance here, while at the same time labour skills and motivation clearly

impact on product quality.

C. FINISHING: Research into new, ecologically-friendly finishing techniques is

also essential. Finally accessing better raw material, either through promoting improvements in local source of supply, or through accessing a

foreign source of material. With regard to finishing equipment, a detailed study is required to find out suitable finishing system for case goods.

D. PRICES: Raw materials would also seems to be a major cause of uncompetitive product pricing, while depending on intermediaries such as

agents and wholesalers clearly impact on the end price. Labour cost are often mentioned as a cause of uncompetitive prices besides technology issues. At present our prices are very expensive in international market because of

expensive raw material. This issue is very important for the relevant organizations (FPC, PFC and APFMA) to study the international market

products and specification and accordingly they have to recommend suitable materials to the manufacturer to make their prices competitive. As far as international purchase price for bedroom and office is concerned, a

panoramic view of this area is reflected at Annexure-C for study. E. Production management Techniques: Introducing world-class production

management techniques will help to solve the backlog problem, delivery delay, and increased defect rate, through job design and production. This will reduce production time per unit and cost, which generate more profit to

finance the medium and long term plans. F. Financial Package/Compensation: It is strongly recommended to apply

incentive methods to motivate labours. This will reduce energy level and enhance productivity as well to meet the requested orders and overcome

backlog problem. This policy will help a furniture company; in the short run, to produce efficiently and within time constraints on the conditions of the commitment, skill, and quality of its labour force. Another way to motivate

the labours is the goal setting that causes labour to compare their present performance with that required achieving the goal. In contrast, labours with

undefined goals are prone to work slowly, perform poorly, and exhibit a lack of interest.

G. MARKETING SKILL: Improved performance on the export market will

require an improvement in marketing skills-better market research, improved service to foreign buyers through in–country representatives and better

marketing tools such as advertising and broachers. Finally, if the Pakistani furniture manufacturers are to meet the demand of large foreign furniture chains they will have to increase their capacity significantly. Solutions for

Design, Labour skills, productivity, Motivation, Machinery, Experimentation with innovative finishing techniques, Market knowledge, Services, Capacity

and flexibility have technically been dependent on individual

firm/manufacturer. However, the ability to deal with these issues at individual firm level is constrained within the context of Pakistan furniture

sector. The cost of employing a full time designer, or doing substantial market research in foreign market, for instance, is simply too difficult for a small or medium scale furniture manufacturer to consider.

Other issues, such as developing new finishing techniques or improving labour motivation and skills imply a dauntingly steep learning curve. If

Pakistan furniture manufacturing sector seriously wants to tackle the problem that hinder their performance in the domestic as well as in global market, then they must act for the modernization of their unit, adaptation of modern

techniques, cooperation with other units as a cooperative society. H. Marketing strategies: Pakistan furniture sector has a quite unique style of

furniture which needs little dressing on construction and material side to make it more worth for domestic as well as for global market. In global market scenario, a large market exists in USA, EU, Middle East and Gulf.

Pakistan has not yet been capable to tap all these markets properly due to technology constraints. Export order requires short delivery time thus the

need for high tech manufacturing facilities which are missing in Pakistan. Besides the exploring of market it is also important that Pakistani manufacturers have to carry out an exercise and conclude that which type of

products are required by the target countries and what are their material specification and how our manufacturers can supply those on competitive

prices. On the level of marketing strategies the following are a few suggestions:

1. Investment in promoting unfinished hand-made carved furniture to specific potential countries like Italy, USA, Saudi Arabia and Gulf

countries. Here organizations (FPC) concerned has to study Egypt furniture industry module before entering this part of show.

2. Participation in the international exhibitions for furniture only with the

items which Pakistan furniture industry is capable to produce on mass scale by following international standards.

3. Establishment of sales offices to support customers and maintain a feedback information system for customer requirements and complaints. This will stimulate the order rate, which generate more

revenues and increase the growth rate of exports.

The above suggestions will help solve the problems, but it is the responsibility of the organizations concerned to design the policy and this come under the preview of Pakistan Furniture Company (Govt. sector) and

private sector. I. TECH FORCE/TRAINING INSTITUTES: The workforce employed in

furniture sector is either unskilled or semi-skilled. Most workers acquire training on the job that result in manufacturing of low quality products and

extended lead time. Furniture industry (ownership) is not willing at all to invest in human resource development. To fulfil the skill flow of carpenter, machine operator, AutoCAD technician,

furniture designer, production supervisor, production management and design management skill force, available institutes are not in a position to

provide the Nos (Non-Organized Sector) required by the industry, Nor they are equipped with latest development across the globe and nor they have tried to design the course as per the need of private sector. The curriculum

offered is obsolete and has not been updated since ages. So time requirement is a proper institute with market driven courses. So in this

connection establishing of a “ National Institute of FURNITURE TECHNOLOGY” where training is required in the following fields:-

1. Four years degree program in “Furniture Manufacturing

Management” and Furniture Design Management” for production managers and designers. (Minimum qualification FA/Fsc)

2. Three years diploma in “Furniture Technology” for foreman and supervisor level. (Minimum qualification FA/Fsc)

3. Two years diploma “Cabinet making/Carpentry” for skilled workers. (Minimum qualification Matric)

4. Two years diploma in “Furniture design/production drawings”

AutoCAD supported. (Minimum qualification Matric, preferably F.sc)

5. Three months training program for “Trainers”. (Minimum qualification Middle)

6. Apprenticeship training program for qualified students with private sector.

7. One year diploma in “Furniture Finishing” (Minimum qualification Middle)

The government and private vocational training Institutes should be encouraged to

introduce training modules such as wood machine operations, finishing processors of furniture, etc. These training programmes and the training institutes should be registered with FPC. Training offered by these institutes

must be as per the requirement of the private sector. Trainees who successfully complete this training programme to be registered with FPC-

PLACEMNET OFFICE and directed to furniture industry and foreign job agencies.

Just to avoid duplication of service, FPC must go through the available training institute in the sector and find out possibility for the upgradation,

modernization as well as taking those institutes on lease for a certain period.

J. ABSENCE OF CAREER GUIDANCE PROGRAMMES ON TIMBER RELATED

INDUSTRIES FOR SCHOOL LEAVERS As a preliminary step, TEVT,SIC,TVC and other technical institute/department, FPC, PFC and APFMA can jointly organize special

seminars/workshops for school leavers on wood technology and publish career guidance books for students with the assistance of the wood

industrialists.

K. Technology/Investment: The current technological status is very poor, so

this is the requirement of time to increase the capital assets by acquiring new machinery to maintain standard quality and reducing time per unit to

increase productivity and overcome any possible delivery delay as order rate increases. One of the very important and critical factors that affect this industry is the painting process, so acquiring painting machinery to

modernize the whole production process will add value to products for export.

L. Human resources management: It’s one of the key issues since the Pakistani furniture industry is labour intensive and the skilled labour is the

only competitive advantage of the industry in the hand-made furniture category. HR management could help developing both the work and living conditions of labour, which increase labour commitment, loyalty and motivate

labour. Furniture Pakistan company (Govt. sector) along with private sector can play its role.

M. Research and development: The Research and Development activities should be needed focus, if furniture industry needs to enhance expected export market. This should include technology transfer, use of the state of

the art manufacturing facilities, tech management and supervisory skills. To

establish design centres, that encourage inventing new design and features and to enhance the quality (Furniture Pakistan Company needs to play its

role in this regard). Besides the above, Establishing a furniture testing/ standardization Lab in Pakistan with the help of FPC, private sector and with TEVTA (Example-FIRA UK) first of its kind in Pakistan is also important.

Testing or Standardizing is the primary requirement for export. N. Co-operative group establishment: For the development of modern

progressive furniture industry in Pakistan, it is necessary that all furniture items for domestic and international markets has to be designed within the limit of intermediate or low technology and within the available domestic

materials. In terms of manufacturing, materials alone do not solve the basic problems, since the lack of technical expertise and insufficient skilled workers

are the major drawback. Labour resources will depend very largely upon two factors:

1: The availability of training facilities.

2: The availability to the industry.

The problem for the cottage & small-scale manufacturers, from the fragmented

available structure they are unable to handle any export activities as required by the client. The main reason behind this weakness in the furniture industry is that it is fragmented, so the main methodology for the development of this

sector is to group hundreds of small workshops under the umbrella of cooperative society groups by converting them into large scale manufacturing

workshops. As stated earlier, there are about 8,000 plus wood manufacturing units in Pakistan, (J.E. Austin Associates, Inc May 31st, 2008) less than 1 % are equipped with required machinery. Here Furniture Pakistan Company has the chance to

show its capability by designing a program for cottage industry to come up under a cooperative group by using Prime Minister Youth Loan Programme.

By making a co-operative group of 10 cottage industries of same line of expertise mean they will be able to get loan of 10.00 million to establish their units on modern line to some extent. Every group of workshops will

participate by a percentage according to its financial ability in the initial investment costs. Each member of group specializes in one specific product

category to achieve the economies of scale principles (one for cabinets, one for tables, other for chairs and so on). Established cooperative groups must

be equipped with new machinery; such as lumber drying, lumber and plywood cutting, and finishing according to the need of production line.

Till the establishment of export linkages these cooperative groups will produce their

standardized design products to the local market and later on they will enter export market when they will be able to meet its requirements.

Here a proper policy/guideline is needed to be designed by Furniture Pakistan Company (Govt. sector) with the help of Private sector.

O. Design, Marketing and Export department: Soon after the establishment of cooperative groups, there will be a need to establish a Design, Marketing

and Export department to help these groups in standardization of their products, designing, production drawings, material specifications and detail construction methodology besides marketing their products. This department

has also to be responsible for handling sales and marketing of the products of cooperative groups locally and promoting exports in all international furniture

exhibition and even rent showrooms in some countries on the same principals as successful experiment carried out by Turkish Government. This has to be under the umbrella of Furniture Pakistan Company. Here a proper

policy/guideline needs to be designed by Furniture Pakistan Company (Govt. sector) with the help of private sector.

P. Material Bank: This will also be appropriate if the government (FPC) with the consultation of private sector could establish a “Material Bank” where local/small manufacturers can get required material for their production on

loan basis on easy terms and conditions. But this requires a complete study

for which FPC has to design a PC-2 for complete survey of initially two sectors, Gujrat and Chiniot to finalize the requirement of required material.

TOR has to be discussed with private sector before launching of this scheme. On the recommendation of PC-2 necessary steps for the establishment of “Material Bank” has to be taken. Also very important factor for FPC to find

out the way to make its first project “Seasoning Plants-7 Nos (Non-Organized Sector) “in operational and successful.

Q. FURNITURE STANDARED: At present, no rules and regulations addressing standard of products from furniture sector is available. Hence, for the development of this sector on domestic level as well as effective export

promotion of furniture product, it is necessary to maintain certain standard. FPC, PFC and APFMA can join hands for the introduction and implementation

of furniture standards all over Pakistan

R. LESSON TO LEARN: To promote the competitiveness of the furniture sector,

this is very important for all organizations concerned especially “FPC” to study the successful development methodology of China, Vietnam, Malaysia

and South Africa. Also to study Egypt furniture sector for un-finished product. In these countries, they have initiated furniture sector development policies that include, among others, incentives for furniture firms, investment in the

industry to systematically develop the value chain, clustering of micro-firms and certification, standards and branding.

14. WAY FORWARD. I. Ensuring a competitive raw materials supply, by allowing imports of wood and

other related materials on minimum possible duty for all wood-processing

industries. II. Clustering of cottage and small manufacturing entities in a number of cities and

industrial parks, which must have access to support services. III. Strong Support of training institutions to ensure availability of human capital, and

formulation of standards.

IV. Financial incentives to promote local industry with rebates on development cost. V. Offering of financial and other incentives—including a refundable tax to incentivize

firms to invest in manufacturing and export of value added products. VI. Formulation of a strategy to target key export destinations and active support of

international marketing campaigns and distribution relationships.

VII. Strengthening of National and regional furniture industry associations to develop and share industry info and contribute to international marketing.

VIII. A proactive approach in establishing public/private partnerships and establishing industry-wide Regional and National associations to drive the development of

the industry. IX. Emphasis that competitiveness is to be based on furniture design and

manufacturing technology.

X. Demand-driven vocational training has been enhanced. XI. Establishing a furniture testing/standardization lab in Pakistan with the help of

FPC, private sector and with TEVTA (Example-FIRA UK) first of its kind in Pakistan. Testing or Standardizing is the primary requirement for export.

XII. Establishment of material bank and seasoning plant within the area of furniture

cluster. XIII. Establishment of furniture testing/standardization lab in Pakistan.

XIV. Establishment of a design and export centre (Joint venture of Public and Private sectors)

XV. PFC needed a 2nd thought for its on-going project to make them more practicable

and suitable for furniture industry XVI. National college of Arts and Pakistan Institute of Fashion Design needed to

introduce following courses: 1- Furniture Design and Manufacturing 4 years 2- Furniture design and Management 4 years 1-yaer

3- Furniture Drafts technician-AutoCAD (All this has to be with the consultation of private sector and 100% according

to their need)

Annex-1

LOCAL WOOD RESOURCES IN PAKISTAN

Pakistan’s furniture has been fairly devoted to solid wood composition, and is therefore heavily dependent on native sheesham wood (Dalbergia sissoo), also known as Indian Rosewood, Tali. It is the state tree of Punjab (India) and the

provincial tree of Punjab province (Pakistan). Despite being a valuable species, sheesham resource has not been sustained in the country. Scarcity of sheesham

and other local hardwoods is the most serious threat to Pakistan’s traditional

wooden furniture industry. (sources: Wikimedia Foundation, In)

Sheesham wood has a rich chestnut colour and is ideally suited to furniture

making due to its hard nature and close grain that polishes well and finishes to a smooth surface. As a natural material each piece of Sheesham timber has

individual markings and characteristics resulting in the fact that every item of furniture is unique.

Advantage of Sheesham wood There are many advantages in using Sheesham wood in the construction of

furniture, if the wood is properly seasoned:

It is less likely to warp or split

The wood takes a good polish and finishes to a smooth lustre

The beautiful natural patterns make an enchanting finish.

Disadvantage of Sheesham wood:

Limited sources available in Pakistan. Too expensive in comparison with international market.

Too much wastage from log to planks. As per physical check, conversion from logs to planks takes 50 % wastage. The picture

below is an example.

Sheesham wood furniture is always recommended:

Must be chemically treated to eradicate any residual parasites before kiln

seasoning: Moisture content must be below 8 % to ensure stability in the UK, US and

CANADA

Example of furniture made by low quality shahmeem wood (with sap wood) which is not recommended for use in a good quality furniture

Annex-2

FASTEST-GROWING FURNITURE EXPORT COUNTRY

List of 25 fastest growing furniture importers from 2010 to 2014. Overall the 5-

year percentage gain for globally imported furniture was 31.5%

S.No Country UP-DOWN TOTAL EXPORT

01 MAURU UP 6,578 % 11.9 million

02 MYNMAR UP 1,432 % 198.9 million

03 IRAN UP 668 % 1.7 billion

04 GUINEA UP 624.4 % 58.5 million

05 KIRIBATI UP 582.5 % 3.4 million

06 BANGLADESH UP 517.8 % 292.7 million

07 MARSHALL ISLANDS UP 485.1 % 7.5 million

08 GHANNA UP 376.3 % 269.9 million

09 CONGO UP 365.7 % 114.8 million

10 MAURITANIA UP 339.1% 30.3 million

11 VIET NAM UP 325.9 % 908 million

12 FALKLAND ISLAND (MALVINAS) UP 324.7 % 3.4 million

13 LIBERIA UP 313.3 % 22.7 million

14 NEGERIA UP 307.3 % 767.7 million

15 CAMBODIA UP 298.8 % 61.7 million

16 KENYA UP 272.4 % 349.3 million

17 GAMBIA UP 263.8 % 13.3 million

18 KYRGYZSTAN UP 263.2 % 82.3 million

19 DJIBOUT UP 242.9 % 71.7 million

20 MOZAMBIQUE UP 231.1 % 117.3 million

21 CAMEROON UP 227 % 98.4 MILLION

22 TANZANIA UP 220.4 % 215.7 MILLION

23 COTE D LVOIRE 116 MILLION

24 OMAN 6.4.9 MILLION

25 COMOROS 6.6 MILLION

Annex-3

TOTAL EXPORT OF FURNITURE 2006-2015

CUMULATIVE ASSESSED VALUE 2006-2015 HS Code: 9401/9403/9404/9405

YEAR 9401 9403 9404 9405 TOTAL

2006-07 1,589,562.83

18,160,630.74

318,747,465.19 1,069,840.29

339,567,499.05

2007-08 1,607,883.10

8,516,423.24

57,046,435.92 358,121.23

67,528,863.49

2008-09 1,240,403.00

4,306,696.64

31,080,239.60 317,091.21

36,944,430.45

2009-10 1,946,685.09

4,873,068.00

23,185,106.76 239,175.06

30,244,034.91

2010-11 1,650,542.52

5,134,026.47

17,614,235.96 209,440.88

24,608,245.83

2011-12 981,208.21

6,889,373.94

66,741,874.22 566,775.70

75,179,232.07

2012-13 1,338,307.19

5,372,051.43

65,403,143.03 478,337.41

72,591,839.06

2013-14 1,176,531.79

5,586,372.96

74,414,473.70 1,239,052.26

82,416,430.71

2014-15 1,755,530.18 7,254,793.21

82,542,169.01 3,240,731.45

94,793,223.85

Annex-4

TOTAL IMPORT OF FURNITURE 2006-2015

CUMULATIVE ASSESSED VALUE 2006-15 HS Code:9401/9403/9404/9405

YEAR 9401 9403 9404 9405 TOTAL

2006-07 3,603,127.10 31,232,840.35

1,365,294.51 20,628,874.38

56,830,136.34

2007-08 2,433,916.24 11,501,438.64

315,430.69 8,063,858.87

22,314,644.44

2008-09 6,504,067.49 14,412,497.74

2,113,858.90 9,866,030.57

32,896,454.70

2009-10 5,479,064.13 7,449,352.87

2,133,515.40 6,874,982.68

21,936,915.08

2010-11 6,915,528.44 2,673,704.92

92,048.04 385,170.16

10,066,451.56

2011-12 8,488,891.11 4,404,089.36

271,661.97 13,171,160.67

26,335,803.11

2012-13 9,554,280.84 6,027,928.62

776,992.86 14,341,263.28

30,700,465.60

2013-14 10,398,601.62 6,430,460.61

332,992.60 16,577,478.89

33,739,533.72

2014-15 20,942,727.09 9,653,171.27

912,730.30 38,259,473.42

69,768,102.08

Pakistan total export 2014-15- Source: TDAP/PBS-table-4