KUALA LUMPUR: Malaysian furniture exports to the US are expected to grow in the range of 20% annually in the next three years as a result of import diversion among American buyers due to the US-China trade war.
Export Furniture Exhibition chairman and former Malaysian Furniture Council president Chua Chun Chai said Malaysia has to capitalise on the supply chain that is moving out of China and take advantage during the trade war to capture higher value businesses such as kitchen cabinet, vanity cabinet, office furniture, metal furniture and bedroom furniture.
He said Vietnam is expected to grow its furniture exports by 30% this year, the biggest growth ever, followed by Malaysia as orders shift to Southeast Asia.
“When it comes to 2020, we will have more substantial impact of the furniture export and going forward to 2021, I believe we can achieve the RM12 billion (annual export of furniture) target by Natip (National Timber Indusrty Policy),” Chua told a press conference on the prospect of the Malaysian furniture industry today.
He said although Malaysian furniture component exports to China have declined as China stopped supplies to the US, Malaysia will benefit as US buyers will buy finished furniture products directly from Malaysia.
“There’s also a good opportunity that we will be able to sell at a higher price (to the US) and not at a price war,” said Chua.
In the first five months of 2019, Malaysian furniture exports to the US grew 20.8% to RM1.55 billion versus the same period in 2018 because of the trade diversion.
Among the main product exports to the US were bedroom wooden furniture, seats with wooden frame, seats and its parts, office wooden furniture and kitchen wooden furniture.
From January to May 2019, Malaysian furniture exports have a market share of 37.6% in the US, 7.8% in Japan, 7.6% in Singapore and 5.6% in both Australia and the UK.
Overall, Malaysian furniture exports to the world increased 9.6% to RM4.14 billion in the first five months this year compared with the same period last year.
The top five products of Malaysian furniture exports include seats with wooden frame (24.1% growth), metal furniture (16.9%), wooden bedroom furniture (14.8%), other wooden furniture (8.6%) and kitchen furniture (6.8%).
The other top traditional markets were the UK (32.9% growth), Japan (18.9%), Singapore (5.7%) and Australia (-9%). Other emerging markets that recorded substantial growth were Canada (25.7% growth), the Philippines (13.9%) and the UAE (6.8%).
In 2018, furniture exports were valued at RM9.83 billion, constituting 0.98% of Malaysia’s total exports to the world.
Malaysia External Trade Development Corp CEO Datuk Wan Latiff Wan Musa said although only a small percentage, the furniture industry is important as it involves many Malaysian companies and SMEs.
“The furniture industry has higher local content and employs more people because they are relatively more labour intensive compared to other industries,” said Wan Latiff.
He said Malaysia has a strong pool of exporters in the furniture industry with a niche in manufacturing. However they must explore the possibilities of transitioning from original equipment manufacturing to original design manufacturing or original brand manufacturing.
