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Home \ Exports \ Industry Outlook \ Furniture


Furniture connoisseurs from around the world have always prized pieces from SoutheastAsia both for their use of exclusive natural materials and the elegant styles influenced by the unique cultures and lifestyles found in the region. Thailand's furniture industry is one of the strongest in the region due to its superior production quality, innovative and modern styling, and flexibility in material use as well as the county's relative political and economic stability compared to competitors in Vietnam, Indonesia, and Malaysia.

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Western style furniture emerged in Thailand over 200 years ago, imported from France during the reign of King Louis XVI. The first pieces of western furniture made their way into the homes of Thailand's nobility and the country's wealthiest families, with citizens of lower rank and wealth settling for locally crafted replicas of the fine European pieces.

The imported furniture influenced local craftsmen, predominantly newly settled Chinese artisans who quickly became skilled in using Thailand's large supply of teak wood to emulate the classical European designs. Along with production of classic designs, styles began to reflect Thai and regional culture as well as incorporating traditional materials readily available in Southeast Asia.

The 20th century saw Thailand emerge as the world's premier supplier of teak wood and products, with the durable hard wood being used for furniture, flooring, in ship production and in countless other ways. Unsustainable logging programs, political corruption combined with unscrupulous business practices severely eroded Thailand's supply of teak wood. The process of deforestation contributed to a series of massive floods in Northern Thailand, which formerly had large swathes of the tropical tree, leading to a countrywide ban on the commercial logging of teak in 1989. The ban jolted the local furniture industry, forcing manufacturers to source imported teak wood or to find a new kind of wood.

Thailand's furniture industry quickly adapted to the teak logging ban and has largely relied and emphasized the use of parawood, a processed wood produced from old rubber trees that no longer produce sufficient quantities of rubber. Every 30 years, plantation rubber trees are felled and replanted as the tree's yield of rubber substantially declines at that age. The potential supply of parawood in Thailand is almost limitless, as the country is the world's leading natural rubber producer and has vast plantations of rubber trees being replaced on an on-going basis. The shift in production by Thailand's furniture makers from teak to parawood has energized the local industry, while giving another source of revenue to rubber producers in the country.

The furniture industry in Thailand has experience strong growth over the past decade. While domestic demand suffered significantly during the economic crisis, exports have remained buoyant and registered US$ 794 million in 1999 with the principle destinations being Japan and the United States. The industry's exports have registered slight growth over the past few years after experiencing a 75% increase between 1991 and 1994. Further growth has been registered over the first eight months of 2000 as furniture exports are up 17% over the previous year.

The export of furniture from Thailand is dominated by wooden products, which comprise over 70% of the total export figure, with metal furniture being the second largest product in the category registering just over 10%. Wooden furniture manufacturers have adapted well to the shift to parawood and currently use it in 60% of production and 80% of wooden furniture exports.

Thailand's wooden furniture industry faces considerable competition from regional competitors, Malaysia, Indonesia, Vietnam, Taiwan and China in particular. Malaysia was the first country to use parawood for large-scale furniture production and benefits from slightly lower production costs than Thailand. China is beginning to import processed rubber-wood for use in its furniture manufacturing industry and enjoys the advantage of significantly cheaper labor expenses. As rival countries advance their production quality, the level of competition for Thailand's furniture exporters is expected to heat up.

Various government agencies and industry representatives have been active in promoting and encouraging Thailand's furniture exports. The Department of Export Promotion (DEP) stepped up its efforts in showcasing Thailand's furniture exporters during the economic crisis when domestic purchases of furniture slumped by over 70 percent. The DEP currently works with the Thailand Furniture Industry Association to stage an annual trade show, along with coordinating participation in relevant trade events abroad.

Furniture manufacturers have also been active in displaying their products in the DEP's newly constructed 'Export Mart', which allows exporters a site to showcase their products on a permanent basis to prospective buyers visiting Thailand. Thailand's Board of Investment has also been active in lobbying for lowered or exemptions on import taxes on imported raw materials for Thailand's furniture industry, including those on paint, glue, lacquer and hinges.

While the style and quality of Thai furniture products has been well received, further efforts should be made to improve the quality and styling of the products to maximize their competitiveness in the world market. Thailand's furniture manufacturers have been slow to achieve industrial standards certification for quality (ISO 9000) or environmental management (IS0 14000), which are increasing in importance for exports ticketed for demanding Western markets. The liquidity problems currently being experienced in Thailand's financial sector are preventing numerous furniture exporters from taking advantage of sales opportunities. However, with Thailand's domestic furniture sales beginning to recover from the crisis and continued strong export sales projected for the future, the industry's prospects continue to appear bright.



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