Malaysia Furniture exports to hit RM9bil this year

GEORGE TOWN: The Malaysian Furniture Entrepreneurs Association (MFEA) expects revenue from furniture exports to hit RM9bil this year.

MFEA president Lor Lean Sen said the industry was unlikely to meet the Government’s RM10bil target this year as the global economy was still soft.

Lor Lean Sen ... ‘The world economy is still recoveri ng, so RM9bil is a more realistic target for this year.’
“In 2008, export revenue was RM8.7bil. It dropped to about RM8bil last year due to the economic crisis. The world economy is still recovering, so RM9bil is a more realistic target for this year,” he told StarBiz.

About 20% of MFEA’s 3,000 members are involved in the manufacturing and export business.

The industry’s main export markets are the US, Japan, Europe, Australia and the Middle East.

Lor said business was picking up again for the industry.

“We estimate that RM500mil worth of sales were concluded at the recent Export Furniture Exhibition in Kuala Lumpur, which is about 30% higher than last year,” he said.

MFEA advisor Cha Hoo Peng said the wood-based furniture manufacturing business in Malaysia had picked up over the past six months.

He said it was now becoming expensive to manufacture furniture in China due to rising labour costs and the country’s need to import raw materials.

“Malaysian-made wood-based furniture are competitively priced in the international market, ranging between RM1,000 and RM1,500 per set. This is about 5% higher than the pricing in January.

Ooi Ah You says automation will help Green Continental Furniture to reduce dependency on foreign workers by 15% to 20%.
“Even if rubberwood prices go up in future, the margin of increase in selling prices will still be around 5%,” he said.

However, Cha said China was still competitve in the steel furniture segment.

“This is because China is a large producer of steel. This enables manufacturers to price their steel furniture much more competitively than Malaysia,” he said.

Green Continental Furniture Sdn Bhd, an original design manufacturer, expects revenue to grow by about 15% to RM130mil this year.

Executive director Ooi Ah You said the company would invest between RM2mil and RM3mil this year to automate its manufacturing facilities in Kulim Industrial Estate and China.

“This will reduce our dependency on foreign workers by 15% to 20%,” he said. The company employs about 900 workers, of which 300 are foreigners.

Penang-based Omega Sdn Bhd, a sofa manufacturer, expects to produce some 1,500 sofas per month by mid-2010.

Managing director Michael Chew said “the increase in production is to meet rising orders from our customers in Australia, Europe and the Middle East.”

Chew said the company exported over 70% of its products while 30% were sold in the domestic market.

He said the sofas were priced between US$300 and US$1,000 in the international market, depending on the grade and quality of the leather.