ANT/Indonesia`s wooden furniture exports continue to drop

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ANT/Indonesia`s wooden furniture exports continue to drop - 12 Apr 07 10:20

Indonesia`s wooden furniture exports continue to drop

Jepara (ANTARA News) - Indonesia`s wooden furniture exports have continued to decline in volume over the past three years although world demand is increasing, Industry Minister Fahmi Idris said here on Wednesday.

Due to the decline in exports, the utility rate of the industry`s capacity had also dropped, the minister said in a written speech read by the director general of small-and medium-scale industries, Sakri Widianto, at the handing over of assistance in the form of tools and machineries for wood and metal furniture industries in Kudus, Jepara and Pati in Central here on Wednesday.

He said in 2004 the utility rate of the industry`s production capacity still reched 75.22 percent but it then dropped to 68.51 percent in 2005 and to 66.41 percent in 2006.

Wooden furniture production in 2004 reached 2,483,067 cubic meters but in 2005 it dropped to 2,330,389 cubic meters and in 2006 to 2,258,882 cubic meters.

Production of processed rattan products had also dropped. In 2004 it reached 386,180 tons a year but in 2005 it declined to 384,165 tons and in 2006 to 372,761 tons.

Although the volume and rate of utility of production capacity dropped significantly, the nominal value of exports of the products rose.

In 2005 , it reached US$2.49 billion and in 2006 rose to US$2.38 billion.

"The rise follows a hike in the price of processed products and furniture components," he said.

Wooden furniture makes the largest contribution to national exports reaching 672,311 tons worth US$1.32 billion while export of furniture components reached 907,158 tons worth US$746.08 million.

Fahmi said the drop in the production utility rate and volume was caused by shortage of wood and rattan supply as a result of smuggling activities, in addition to lack of capital, tighter competition and low quality human resources.

Therefore, he said, the government would continue to support national furniture industry development.

He said export prospects for Indonesian furniture were still bright as the country`s share in the market was still small. "We have the pontentials to increase the share," he said adding the country`s share in the world furniture market was not still 2.9 percent or US$2.2 billion.(*)