The furniture manufacturers and exporters have demanded cash incentives and lowering of import duty on raw materials in the next fiscal budget to make the sector globally competitive.
“Due to high import duty, we fail to compete with other countries in the international furniture market,” KM Akhtaruzzaman, president of Bangladesh Furniture Exporters Association (BFEA), told the Dhaka Tribune explaining the cause for their demands.
He said they were being beaten in the global market as the costly import of raw materials increased the production cost.
The sector sought 20-25% cash incentives to achieve 100% growth in exports.
According to the Association, the government had not kept their words given several times to provide cash incentives to the furniture sector.
“We are yet to get any cash incentive. But the commerce minister’s recent assurance raised our hopes,” said BFEA president. Industry people say around 60% of raw goods including timber, wood coating materials, hardware and accessories and fabrics are imported from different countries.
“High duty is a burden on us. Easing of it will be a boon for the sector’s boom,” said Selim H Rahman, chairman of Bangladesh Furniture Industry Owners Association.
He said Bangladesh is a nascent supplier to global furniture market, so “it needs incentive to produce quality goods in large volumes.”
Selim H Rahman, also managing director of Hatil Furniture, identified shortage of skilled manpower as another problem Bangladesh’s furniture sector is facing.
“It has transformed from a cottage to a technology-based industry. The sector now requires skilled labour force and for this, institutional educations in technical schools and universities are needed,” he said.
Selim Rahman sees the sector can fight well in the global market as it is a labour-intensive industry and Bangladesh has cheap labour. BFEA said the local manufacturers can now meet 90% of domestic demand, reducing the country’s dependency on imports.
“Once we had to meet 50% of local demand by imported furniture, which cost us huge foreign currencies,” said BFEA president Akhtaruzzaman.
Bangladesh’s furniture market size is over Tk14,000 crore and the local makers supply a variety of international standard furniture made from wood, processed wood, melamine board, particleboard and steel etch.
Currently, the country has 41,560 enterprises producing furniture, where about 15 lakh skilled, semi-skilled and unskilled workers are employed.
Industry insiders said foreign buyers were increasingly showing interest in the Bangladeshi furniture and some of them already sought briefing about the products.
They said foreign buyers were being attracted by the cheap rates and good-looking designs of the Bangladeshi furniture.
The local manufacturers want proper policy support from the government to use the prospects.
Bangladesh earned over $25m in the July-February period of the current fiscal year from furniture exports, registering 32% growth over the same period a year ago, showed data of Export Promotion Bureau (EPB).
The figure was $19.20m in the same period last year when the total annual furniture export stood at $31.41m.
Furniture export target has been set at around $38m for the current fiscal year with 20% rise from last year.
At present, the country exports office furniture, metal furniture, seats with metal frames, bedroom furniture, wooden, plastic-made, spare parts, mattress supports, sleeping bags, lamps and light fittings to various destinations of the world.