Furniture exports set to reach $2 billion next year, growing 11 percent from this year. (Antara Photo/Dedhez Anggara)

Trade War Presents Window for Indonesian Furniture Makers to Meet Elusive Export Target

BY :EVA FITRIANI

DECEMBER 31, 2019

Jakarta. Indonesia's furniture manufacturers are confident to reach the elusive $2 billion export target next year, taking advantage from increasing demand from American customers who seek supply replacements for tariff-hit Chinese furniture.  

Indonesia's furniture exports have picked up in the last three years, following years of stagnated growth early in the decade. The United States President Donald Trump's aggressive tariff against China's furniture has allowed Indonesian exporters to crave out some market shares for themselves. 

Secretary-General of the Indonesian Furniture and Crafts Industry Association (Himki) Abdul Sobur expects furniture exports to reach $2 billion next year, growing 11 percent from this year's projected $1.8 billion. Last year, the exports were at $1.7 billion, similar to the figures from 2012, data from the Industry Ministry showed. 

"We believe we can achieve the $2 billion benchmark that has been eluded us all these years. Growth will be driven by the American market as the country's trade war with China remains," Abdul said. 

Today, furniture exports to the US accounted for more than 40 percent of Indonesia's furniture exports.

"There has been an upward trend in exports there in recent years. That's because many importers there are looking for substitutions for Chinese furniture which are affected by the trade war," he said.

Still, Indonesia must face strong competitors from Vietnam and Malaysia, which became the destinations for global manufacturers relocating their operation from china.

"Their performance is better than Indonesia because they have prepared better and have better regulations," Abdul said.

The government's policy that requires timber verification and legality (SVLK) to furniture manufacturers have hindered the industry, he said. Abdul hopes that the government would implement exemption on the SVLK requirement early next year.

"Without a real trade war, we still have room for growth. But technically, internally we have not supported to be able to make the national furniture industry strong," he stressed.

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