Tk 300 billion furniture industry needs policy support to boost export: Experts
Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Businesses, academicians, and experts on Monday opined that the country’s TK 300 billion furniture industry needs proper policy support to have a strong presence in the global market.
They recommended bond facilities, reduction of duty on raw materials, training, testing, and designing facilities to make the sector truly competitive.
Furniture was declared product of the year by the chief adviser, but the sector, having immense potential to be a major foreign currency earner, is yet to get the necessary support from the government, they said at a seminar titled “Bangladesh Furniture Industry: Unlocking Export Potential," organised by the Export Promotion Bureau (EPB) in association with the Bangladesh Furniture Exporters Association (BFEA) at the Bangladesh-China Friendship Exhibition Centre in Purbachal on Monday.
Commerce Adviser SK Bashir Uddin was the chief guest in the seminar presided over by Anwar Hossain, Vice Chairman of the EPB.
A BFEA director Dewan Atif Rashid presented a keynote paper—which shed light on the furniture sector’s challenges and prospects of the country-- was followed by a panel discussion.
The pool of panellists included Managing Director and Chairman of Hatil Furniture Selim H Rahman, who is also the secretary general of the BFEA, Chairman and CEO of PRAN-RFL Group Ahsan Khan Chowdhury, National Board of Revenue Member (Customs, Export, BOND & IT) Moazzem Hossain, Executive Director of a private think tank RAPID Dr M Abu Eusuf, Dean of School of Design at BRAC University Professor Dr Fuad H. Mallick, Professor of Materials and Metallurgical Engineering Department at BUET Dr Ahmed Sharif, and Deputy Chief Conservator of Forest Management Wing Moinuddin Khan.
The commerce adviser assured full support to the furniture sector, but at the same time, he reminded that the government alone cannot be made responsible for addressing all the challenges.
“Both the government and the private sector should mobilise all their resources and efforts to formulate an action plan so that the true potentials of the furniture industry can be unlocked,” he said.
He expressed his sheer optimism that with proper implementation of the action plan devised by both the government and the industry, the furniture exports can be raised to one billion dollar by 2030.
However, the adviser also made it clear that FTA cannot be a panacea for resolving the challenges of the sector as there are many flip sides of FTA and the country needs to be cautious in inking FTA.
In this connection, he argued that if an FTA is signed with countries like China and the EU, which are already providing Bangladesh duty-free access to their markets, it will not give that much benefit.
To some extent, this can impact the industry negatively, as they will have the scope of exporting finished products in a bigger way after getting the FTA signed, he warned.
He also said that businesses need to stop the tendency to abuse bond facilities and achieve true competitiveness by raising productivity.
“We are ready to provide everything,” he said.
He noted that the sudden surge in furniture exports by Vietnam resulted from the manufacturing migration from China to that country.
Assuring the present government’s commitment to the industry, he said that the government white paper revealed how during the previous regime the economy of the country, was highly criminalised.
The keynote presenter, Dewan Atif Rashid said the local furniture market size is estimated at around Tk 300 billion, which generated employment for nearly 2.5 million people.
“Considering the potential of the export market, the Bangladeshi furniture sector could multiply its contribution to the national GDP by 7 or 8 times in the next five years upon the barriers being addressed,” he said.
Mr Rashid mentioned that several factors, like affordable labour costs, the capability to design adaptation, the growing local market, and the country’s geographical location, are vantage points for Bangladesh.
However, there are some pressing challenges too, he said.
“Maintaining international compliance, absence of certification, higher manufacturing cost, limited automation, and absence of country branding as a furniture export are some of the adversities,” he said.
Referring to the success of Vietnam, the keynote presenter said Bangladesh could also expand its international furniture market by several times.
Highlighting the opportunities he said that the global eco-friendly furniture market is expected to reach 90 billion US dollar in 2030 from the 36 billion dollar in 2020.
At the same time, the modular furniture market is projected to go up to 28 billion dollar in 2028 from 16 billion dollar in 2020.
On behalf of the BFEA, he suggested the government take necessary steps, including proper implementation of already-adopted policies regarding duty and bond facilities, capacity enhancement, measures for standardisation and certification and commercial campaign and branding.
In this connection, he pointed out that some sections of the National Export Policy 2024-27, Import Policy 2021-24, and the National Tariff Policy-2023 stipulate providing bond facilities to sectors like the furniture industry, which have strong export potential.
M Abu Eusuf said all export-oriented sectors should get equal facilities for their raw material imports to diversify the country’s export basket.
He suggested getting prepared to cope with the challenges to be emerged from the LDC graduation, and enhance country branding.
Underscoring the need for following eco-friendly practices for manufacturing, he said, "The whole world now follows ESQ which consists of Environment, Society and Quality.”
BEFA General Secretary Selim H Rahman urged the government and stakeholders at the seminar to provide a time-bound roadmap to help boost the country’s export-oriented furniture sector.
NBR Member Moazzem Hossain said the country's economic development must not depend on a single sector.
The country’s export-oriented sectors are required to lower their production costs to be competitive in the international market, he said, adding that NBR is working with this aim.
He also felt that the government should not provide special facilities to a special sector at the cost of others.
Dr. Fuad H. Mallick highlighted the importance of design education that could help different sectors, including furniture.
Dr Ahmed Sharif said Bangladeshi manufacturing sectors are largely dependent on the ‘copy-paste’ concept.
“We may survive with copy-paste, but cannot lead in this way,” he said.
Moinuddin Khan said the concept of certification for wooden products is not very old in the country.
The country’s forest department has the capacity to provide green certification, and the issue is being incorporated in the next forest policy, he added.
Ahsan Khan Chowdhury said furniture as well as every sector which aims to widen the export market must get similar facilities like China-Vietnam from the government while importing raw materials.
Seeking the required support like duty-free import and bond facilities for the furniture sector, which could create huge employment opportunities, he said.
"We cannot beat Vietnam if we do not get the raw materials at fair prices," he said, seeking duty rationalisation on the import of materials.
He also pointed out that the assumption of the US presidency by Donald Trump paved the way for expanding our export volume, as it is assumed that there would be a ‘Trump tax’ on certain countries.
"We missed the opportunity of the Trump tax during the first Trump era; now we have to make the best use of it," he observed.
EPN Vice Chairman Anwar Hossain said that the EPB will try its best to pursue the concerned authorities to incorporate the recommendations of the industry in the government policies.
He also stressed the need for a comprehensive and collective collaboration between the government and the industry so that the one billion dollar export target can be achieved by 2030.