Furniture sector has prospects for export growth

07 Jul, 2019 - 00:07 0 Views

The Sunday Mail

Trade Focus
Allan Majuru

The availability of vast locally sourced raw materials, which is a key pillar to promote development of the wood furniture manufacturing sector, presents opportunities for growing Zimbabwe’s export capacity.

Given favourable climatic conditions that support farming of timber in Zimbabwe, the furniture sector has the capacity to produce enough products to supply foreign markets.

Zimbabwe boasts of abundant timber resources with high quality hardwood such as teak, pine and mukwa.

These are used in most of the highly sought-after and luxurious furniture products that fetch higher prices in the export market.

According to Trademap, global exports in wooden furniture in 2018 amounted to over US$50 billion.

Trademap provides on-line access to the world’s largest trade database and presents indicators on export performance, international demand, alternative markets and the role of competitors from both the product and country perspective.

In 2018, Zimbabwe’s global exports of wooden furniture stood at US$3,1 million, representing a 18 percent increase from US$2,6 million recorded in 2017.

Although the country’s export value in wooden furniture is rising, the figure recorded in 2018 is still low compared to the US$8,6 million realised in 2009.

To maintain the upward trend in wood furniture exports, there are ready markets that sector players can tap into, which include the United States of America, Germany, United Kingdom, France and Netherlands.

Closer to home, huge markets exist in the Southern Africa Development Community (SADC) and Common Market for Eastern and Southern Africa (Comesa), where Zimbabwe is ranked second among top exporters of furniture.

The top importers include South Africa, Botswana, Zambia, Angola and Kenya.

To harness the potential presented by these markets, there is need for concerted effort from Government and private players to address challenges that affect production and export of wooden furniture.

For example, following submissions made by industry players to Government through ZimTrade — the country’s trade development and promotion organisation — during the Rapid Results Initiative of 2017, Forestry Commission of Zimbabwe de-centralised issuance of timber movement and export permits to district officers and reduced the cost of export documentation by 50 percent.

This ease of doing business framework presented an opportunity for sector players to reduce the cost and time required to facilitate exportation of wooden furniture.

In addition, there is urgent need to speed up industrialisation efforts that will enable sector players and the country to earn more through value addition.

As global prices of wood furniture rise, those of unprocessed timber and logs are on the decline.

In 2017, Zimbabwe exported timber worth US$5,3 million.

However, in 2018 the value of timber exports dropped to US$4,1 million, indicating that the sector players may continue to lose more if they do not add value to their products.

With regards to quality of Zimbabwe-produced wood furniture, there is need for sector private players to invest in innovation, research and development so that they produce cutting-edge products that set new trends in the global market.

The global performance of the sector is affected by factors such as consumer income, shifting lifestyles and changing urban landscapes.

It is, therefore, important for local players to continuously monitor target markets.

By understanding market tastes and requirements, local players will have capacity to produce products that can perform well compared with competition from other countries.

Modern wooden furniture designs are sold at a higher price and cost less in production and transportation.

For example, most players in South Africa have moved away from exporting assembled products to producing collapsible modular designs that can be easily assembled at the final market or by the end-user at their home.

Thus, the cost per unit in production and transportation is cheaper and this makes modern designs highly competitive on the global market.

To assist local sector players to produce modern designs, there is need for Government to reduce and eventually eliminate import duty on production equipment.

This will enable manufacturers to match competing designs from other countries.

Another game-changer for the wood furniture industry will be realised when sector players and visual artists work together to create and patent designs that are unique to Zimbabwe.

These designs will earn more as value is added on the actual product and the unique idea that inspired the woodwork.

Local producers also need to take advantage of existing programmes offered by ZimTrade to capacitate sector players so that they become competitive on the global market.

ZimTrade has been working with Netherlands-based PUM and Germany-based Senior Experten Services to improve the production efficiencies and competitiveness of local sector players’ companies.

There is further room for small and medium enterprises (SMEs) operating in the furniture sector to strengthen their competitiveness by forming an active association that can foster better standards and quality of products produced in the country.

In the past few years, the furniture sector in Zimbabwe has seen an emergence of many SMEs — a greater number of which require huge support to inculcate business and export skills.

 

Allan Majuru is the chief executive officer of ZimTrade

 

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