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Challenges Impeding Competitiveness of the Wooden Furniture Manufacturing Industry

07.02.2012
The Case of Furniture Industry in Sarawak, Malaysia

Sarawak, being the largest state in Malaysia, is a major producer of tropical timber and timber products in the world. However, despite being blessed with abundant timber resources, it has a relatively small wooden furniture manufacturing industry, with insignificant exports compared with other timber-exporting countries.

The world production of furniture in 2010 is estimated to worth US$376 billion while annual trade in furniture for the past three years surpassed US$100 billion (CSIL 2010). Furniture has the highest value-added component among the major wood-based products. The industry promotes efficient use of timber resources and expands the range of economic activities within the forestry sector from the current harvesting of raw logs and downstream secondary timber-processing, to tertiary-level manufacturing and marketing of finished timber products. For timber-producing countries that seek to promote and develop downstream wood-processing industries, furniture manufacturing is therefore an ideal option.

Malaysia is currently the tenth largest exporter of wooden furniture in the world, with export value expecting to reach RM10 billion in 2010. Most of the furniture manufacturing activities are concentrated in the West Malaysian states of Johor, Selangor and Perak. In comparison, the East state of Sarawak has a relatively insignificant export-oriented furniture manufacturing industry. Sarawak’s earnings from wooden furniture export in 2008 amounted to RM27.82 million, which constituted a mere 0.42 percent of Malaysia’s total earnings of RM6.7 billion in the year.

Sarawak, nevertheless, is endowed with rich timber resources and is among the largest supplier of semi-finished tropical timber products in the world. While these may provide the state with a comparative advantage in furniture manufacturing, the industry is small and oriented towards the domestic market. In 2008, wooden furniture accounted for only 0.37 percent of the state’s total export earnings from timber and timber products. Hence, by dint of its uniqueness, Sarawak is chosen in this paper as our case study.

We aim to analyze the key challenges faced by furniture manufacturers in the state and discuss the role of the state government in the industrialization of the forestry sector. We also suggest the possible steps that can be taken to foster the development of the furniture manufacturing industry. The competitive advantage of Sarawak lies in the production of timber and timber products which constitute key inputs to furniture manufacturing. However, the industry hitherto remains insignificant despite.

Malaysia being one of the largest producer and exporter of timber produce in the world. To identify the impediments to the growth of furniture manufacturing and to capitalize on the competitive advantage in timber production, we collect primary data using qualitative method of unstructured in-depth interviews. Unstructured interviews are defined as interviews in which neither the question nor the answer categories are predetermined (Minichiello et al. 1990).

Punch (1998) described unstructured interviews as a method to understand complex behaviour of people without imposing any a priori categorization, which might limit the field of inquiry. Patton (2002) described unstructured interviews as an extension of participant observation. Unstructured interviews rely heavily on spontaneous generation of questions in a natural flow of the interactions. Care was taken to collect data on all possible perspectives on the challenges faced by the industry. A total of seven interviews were conducted. The interviewees comprise three owners of wooden furniture manufacturing companies, two owners of sawmills, a committee member of the Sarawak Timber Association and a committee member of the Sarawak Furniture Industry Association.

Associated links
http://www.insipub.com/ajbas/2011/September-2011/1135-1145.pdf
Journal information
Australian Journal of Basic and Applied Sciences

Dr. Anand Agrawal | Research asia research news
Further information:
http://www.ibsindia.org
http://www.researchsea.com

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