Constructive duty policy a must for the growth of furniture industry
Though Bangladesh is widely known for its garments and textile products, there are other industries that are considered potent to capture global market in the near future. And the furniture sector is one of them, which has emerged as a major exporter with robust growth recorded over the last couple of years.
However, despite being an export potential industry, the sector is grappling with numerous challenges in expanding its export market due to high dependency on imported materials and lack of policy support.
Industry insiders say a favorable duty policy needs to be formulated for this sector’s growth, as over 50% of raw materials are imported.
Speaking to the Dhaka Tribune, A Karim Mojumder, treasurer of Bangladesh Furniture Exporters Association, said: “Import duty on raw materials is a major challenge facing the industry. Since traders manufacture furniture both for local and export markets, they are not entitled to enjoy bonded warehouse facilities.
“We have to import over 50% of raw materials and import duty is very high. So, a comprehensive duty policy can lead the sector to a new height.”
Industry insiders also said Bangladesh should take initiatives to showcase its variety of products to promote the industry in the global market and attract foreign buyers.
Karim, also the managing director of Nadia Furniture Ltd, said: “In the global market, Bangladesh is a lesser-known furniture exporter, and buyers are not well informed of our furniture items. I think that by launching commercial wings abroad, the Bangladesh government can promote our products there and attract foreign buyers.
To this end, the government should create opportunities for local traders to participate in international fairs, he said, adding that traders themselves should come forward to hold expositions to showcase their collections of furniture.
“Since the furniture industry is a labour intensive one like our apparel industry, there is a prospect that it will create employment opportunities for people in the country.”
Echoing Karim, AB Mirza Azizul Islam, former advisor to a caretaker government, said the furniture sector as an export-oriented industry could create a vast number of jobs for Bangladeshis in many ways.
He said: “The government should focus not only on the RMG industry but on other sectors, including the furniture industry, to diversify the export basket and to reduce dependency on limited export items.
“As the country’s economy is growing fast, now is the time for us to concentrate on diversification of our export items in order to take the lead in the global market, and furniture can be a good and positive addition to our export basket.”
Due to high wage and production costs, Bangladesh’s competitors in the global market are increasingly shifting their attention away from export-oriented businesses, resulting in the creation of more opportunities for the country that benefits from its widespread low-cost labour.
Also, Bangladeshi products in Asian countries like Nepal, India and Bhutan are in high demand.
According to data released by Export Promotion Bureau (EPB), in the first half of Fiscal Year 2017-18, export earnings from furniture rose by 27.20% to $24 million, a figure which was around $19 million in the corresponding period of the last fiscal year.
In the last fiscal year, the country earned $52.53 million by exporting furniture items.
Selim H Rahman, managing director of furniture manufacturing company Hatil, said: “Our industry is witnessing massive growth both in local and export markets. If there are reasonable duty rates, we will see the sector flourish like our RMG sector.
“As the demand for our products is constantly rising, we are going to open a new outlet in India this month, and out products are receiving positive response from customers in Nepal.”
The main variations of products are wood, processed wood, medium density fiber board, laminated board, particleboard, and rattan, bamboo and wrought iron furniture.
As per the EPB, Bangladesh currently exports office furniture, metal furniture, seats with metal frames, bedroom furniture, wooden furniture, and mattress supports.