Bangladesh has huge potentials in expanding into the global furniture manufacturing and exporting market provided it gets sufficient tax incentives.
At present, the country’s local furniture manufacturing market is about Tk 250 billion ($29761 million). However, experts say that professional support from the government can boost the industry and lead to export $100 million worth of furniture. The prediction came from a study conducted by the SME Foundation for the furniture sector.
The study showed the world furniture market is about $480.7 billion, of which, 31.7 percent is won by Chinese furniture. The world furniture market will stand at $ 654.6 billion by 2025.
During the last fiscal, the country has exported furniture worth $74.7 million. However, the positive side is, the country’s export increased by 18.52 percent at the same time compared to that in the previous fiscal. With this rising trend, by 2022, the country's furniture exports could exceed $ 100 million, researchers said.
According to them, Bangladesh could gradually capture a large portion of China's furniture export market like that of Ready-Made-Garments industry. The experts said such forecast is only possible if Bangladesh reformed its tax structure, increased financial assistance, established a separate furniture manufacturing park, simplified the VAT structure and improved the skills of workers engaged in the sector.
The industry has achieved significant growth with more than 40 companies exporting furniture to 48 countries including the Middle East, where Bangladesh exports bulk of its furniture.
Export of furniture made a significant growth of 62.90 percent year-on-year to $23.05 million in the July-October period of 2018-2019 fiscal.
Selim H Rahman, general secretary of Bangladesh Furniture Exporters Association, told Bangladesh Post, “The main reason behind the export growth is that we have low-cost labor which lowers our cost of production.”
“So we can offer high-quality products at competitive prices. We have been organising furniture fairs over the last 4 years to attract foreign buyers. Our government is giving 15 percent cash incentive to furniture export. That’s why the exports have increased,” he said.
Moreover, there is an increasing demand for hand-carved wooden furniture in the US, UAE, Saudi Arabia, and Qatar.
Leading furniture companies like Otobi, Akhtar, Hatil, Brothers, Partex, Navana, and Furnitec are the major players exporting furniture. Apart from these companies, some other companies also export furniture to the neighbouring countries.
At present approximately 85,000 enterprises and nearly two lakh skilled and semi-skilled people are engaged in this sector.
On average, 60 percent of raw materials for the furniture sector are imported from different countries. Of these, timber, wood coating materials, hardware and accessories, and world-class fabrics etc, are the major imported items.
This sector has some mentionable problems such as high import duties on some raw materials like good fabrics, finishing coating materials, hardware and accessories, and shortage of electricity gas etc.