Furniture sector shows signs of robust growth
Sharif Ahmed
The furniture sector has achieved the highest ever export earning of USD
18.03 million in the first quarter (July-September) of the current fiscal year (201819).
This was up from USD 10.67 million for the same period in the previous financial year (2017-18), showing a robust growth of 68.98 per cent.
Selim H Rahman, president of the Bangladesh Furniture Industries Owners Association (BFIOA), explained to The Independent the reason behind this outstanding growth.
According to him, China has switched from manual to high-tech industries, vacating a huge market space that has created vast opportunities for Bangladesh. Moreover, the use of modern technology, a cash rebate of 15 per cent on furniture export, and cheap labour helped achieve an impressive double-digit export growth over a couple of years.
In addition, the average year-on-year export growth has increased by 1015 per cent, he said.
Bangladesh exports furniture to countries such as those of the Middle East, Canada, Nepal, Bhutan, India, Malaysia, Belgium, the US and European countries.
The products have become famous because of their fine quality and innovative designs, said Rahman.
He also said the local furniture industry is growing rapidly because of the increasing purchasing power of consumers and the adoption of effective market strategies based on market research.
The introduction of new designs, modern technology and the manufacture of innovative products has pushed up the demand for local furniture, he added.
Replying to a question, Rahman said though there is no statistical data, the local market size is believed to be of approximately Tk. 22.5 thousand crore.
Describing the challenges, the BFIOA president said raw materials such as wood, hardware, finishing materials, among others, are being imported from abroad. We pay, on average, 5560 per cent import duty on raw materials. This increases the production cost of the final product, he added.
Bangladeshi furniture-makers import the raw materials, manufacture the products and export the finished goods. Hence, the import duty has an effect on export, he said.
Citing an example, Rahman said: If Tk. 100 is the selling price of a product, Tk. 50 is incurred as the cost of raw materials including the import duty. After that, we have to pay corporate tax, which eventually adds up the cost and is reflected in the price of the product.
Demanding some facilities, Rahman said: We want bond facilities provided to export-oriented industries for importing raw materials without paying any duty or tax. Availing the bonded warehouse facility is essential for export-
oriented industries as it enhances export and price competitiveness.
He also said the government should reform an import tariff policy to enable the furniture industry survive and compete with global players such as Vietnam and Indonesia.
Rahman further said that Hatil Furniture exports products worth around USD 100,000 to the Middle East, Canada, Nepal and Bhutan every month. The domestic furniture market is growing at a rate of 1520 per cent a year, he added.
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