Indonesian Furniture Industry Case Study

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2. BACKGROUND

2.1. Indonesian Furniture Industry

This section provides an overview regarding the role of Indonesia’s furniture industry for its economy, also general information about the type of furniture products that have been exported to EU market and some furniture exporter countries which become the major competitor for Indonesia.
Indonesian furniture industry is one of the potential sub sector in Indonesia. This Industry creates great job opportunities for Indonesian people. Furniture industry employs two million people directly, with an additional eighth million workers indirectly. Most of the industry is small and medium enterprises (SMEs) that could lead to substantial poverty alleviation throughout Indonesia. Typical Indonesian furniture products are made of wood and rattan. Around 57 per cent of Indonesian furniture exports are made up of wooden furniture, another 20 per cent of its export consist of furniture of rattan, and around five per cent includes other materials such as bamboo, plastic and metal. This is because of Indonesia has abundance raw materials, especially woods. Almost 108 million hectares of Indonesian land area consist of permanent forest (TREDA 2008). European countries and the United States are the …show more content…

It is because, it provides large market share. With the population over 500 million people, the EU accounts for about one quarter of the global world furniture market. The trade balance for furniture product in the EU market has decreases dramatically. From 2002 to 2008 the trade balance of EU furniture product deteriorate, almost 1.8 billion euros. It means that The EU countries import more furniture product from abroad rather than to export it. This is due to rapid penetration from other furniture exporter countries such as China, Vietnam, Malaysia and Indonesia in EU market (UN COMTRADE

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