Selim sees huge potential in furniture sector

Furniture sector in Bangladesh has a huge potential to grow in global market as China, the major manufacturers in the sector, is moving towards high-tech due to increased labour cost, says Selim H Rahman, president of Bangladesh Furniture Industries Owners Association.

Seeking long- and medium-term policy support from the government, he says that after readymade garment sector, furniture is the highest labour-intensive sector and if the government can provide proper policy support, the sector will be the second highest export earning sector.

Selim, also chairman and managing director of Hatil Complex Ltd, points out that the competitive edge of Bangladeshi furniture makers will not increase only through the government-provided 15 per cent cash incentive against furniture export as manufacturers pay on an average 55-60 per cent duty on raw materials.

‘We are struggling for the last 10-15 years and in the meantime the sector has emerged as an export substitute as we are meeting most of the domestic demand for furniture. If you look into the import data, the import of furniture fell drastically in last 5-10 years due to the support of local companies,’ mentions Selim, who started his business in 1989.

Garment sector has created huge employment in the country especially for women and the furniture sector also has scope to create job for a large number of people but the government would have to provide infrastructure support, he says in an exclusive interview with New Age at his corporate office in the capital.

‘Although the amount is insignificant, Bangladeshi furniture companies have been exporting for the last few years and we are getting good response from Asian market,’ Selim says.

Selim thinks that it will be very easy for Bangladeshi furniture makers to grab the European market if the government can formulate an action plan to promote the sector.

‘We should reduce dependence on only one export product and Bangladeshi furniture could be the other option beside the readymade garment products in the global market,’ he suggests. 

The Hatil chairman says that furniture is no more a luxury products; it has now become an essential product all over the world and the government should formulate policy keeping the global changes in mind to boost export in the sector.

He mentions that Bangladesh, Vietnam and Indonesia will be the next sourcing destination of furniture in coming days as China, the major manufacturer, is shifting its industry to high-tech due to increased labour cost.

According to the sector insiders, global furniture market is worth Tk 23,000 crore and china meets 60 per cent of the demand.

‘Despite having potential, Bangladeshi furniture makers have failed to grab the EU market for lack of compliance and competitiveness. We are mostly dependent on imported raw materials and it will not be possible to be competitive in the global market as we have to pay on an average 55-60 per cent duty on raw materials,’ Selim mentions. 

He says that in the last 10-15 years the country’s furniture industry grew a lot and now the time is to emphasise backward linkage industry. 

In the preliminary stage, the sector was fully dependent on imported raw materials but in recent times some of the entrepreneurs are coming forward to set up backward linkage industry.

‘Now we have started producing medium-density fiberboard in our country and many other backward linkage industries will be set up in the country in line with the growth of furniture sector,’ Selim informs. 

He demands bonded warehouse facility for the furniture sector saying that like readymade garment sector all the potential export sectors should get attention from the policy makers. 

‘Instead of cash incentive, if we would get tax rebate through bonded warehouse, it would be possible for the sector to be competitive in the global market.’ Selim notes.

Obviously, he says, quality is an important thing and Bangladeshi makers produce quality furniture but the buyers consider both the quality and prices of products. 

Selim sees huge potential of Bangladeshi furniture in Indian market saying that Bangladeshi companies are exporting furniture to the market and demand for the products has been increasing every day.

‘My company is doing well in Indian market and a total of eight showrooms with the brand name Hatil have started business in the market while five more showrooms are in the pipeline,’ he mentions.

Selim says that the efficiency of the furniture sector in Bangladesh is much higher than India, Bhutan and other neighbouring countries.

The sector people estimate that the local furniture market is worth Tk 2,000 crore and local manufacturers meet the loin share of the demand.

Compliance is an important think for grabbing the EU and US market but the entrepreneurs are not getting proper support for setting up environment-friendly industry in furniture sector, the association leader laments.

‘In the last 5-10 years, we have established few world-class furniture industries in the country which are equipped with the latest machinery and technologies without any policy support from the government,’ he says. 

Only the readymade garment sector is enjoying duty benefit in importing fire safety equipment and LED lights for setting up industry but the government should provide equal benefits for other sectors to ensure equal growth, Selim observes.

He identifies inadequate infrastructure, poor port management and long lead time as other impediments to attracting orders from the EU and the US markets.

Selim demands need-based curriculum in the country’s education system so that industry can get efficient manpower as Bangladesh has a huge number of young people with their age between 25 and 30 years. 

He says that about 20 lakh people work in furniture sector across the country and the government should pay special attention to the sector for generating employment.