Factors Affecting Export Performance of Pakistan Furniture Industry

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This paper focuses on the factors which are affecting export performance of Pakistan furniture industry. The study provides a brief overview of the problems which are creating hindrance for furniture exporters. Also, it provides some suggestions and recommendations to the government and furniture exporters through which they can improve their performance of exports. The study concludes the factors both exogenous and endogenous, which prove to be creating obstacles in the export of furniture. Introduction:-

Pakistan has been unable to grasp a good position in the international wooden furniture market despite the fact that the country has a history of dexterity and novelty in the furniture making. The wooden furniture industry represents 95% of the total market in the country. Pakistan is heavily dependent on Sheesham (rosewood) for furniture manufacturing. The primary areas of furniture makers in Pakistan are Chiniot, Gujrat, Peshawar, Lahore and Karachi and the furniture exported by Pakistan is usually made by rosewood and metals, however, some products are also made from walnut wood. Pakistan is exporter to about 80 countries, which mainly include USA, Malaysia, Singapore, Saudi Arabia and Kuwait. USA mostly imports bedroom furniture from Pakistan, whereas UK and Gulf countries along with bedroom furniture also trade in office and kitchen furniture. The wood and furniture industry in Pakistan can be divided into two main types i.e. cottage and small scale industry. Both of these units use outdated machinery and manual labor for manufacturing wooden furniture. There are about 700 registered units in the country. These units are operating on a single shift/300 day’s per annum basis. The export of furniture increased up to 42 percent in the first 11 months of 2002-03 because of the attention given to quality and aggressive marketing which enabled Pakistani exporters to capture the European furniture market, leaving many competitors behind (Export Promotion Bureau. The news.www.jang.com.pk, 2002). After a stable growth in furniture export, starting from 2006 Pakistan has faced a decline in the sector mainly due to low maintenance of quality and standard and increased market competition (Scholer .,etal 2007). The future of Pakistan furniture industry is not so promising. Exporters are facing numerous problems. One of which is access of Chinese furniture in local market (70% of total market) creating problems for the local manufacturers. Thus due to low cost and high quality standards Chinese furniture has captured the market, downsizing the sales of locally manufactured furniture to 30%. In addition, the pressure on the domestic industry has increased tremendously as other countries like Thailand and Korea have started exporting furniture extensively to Pakistan. Unfortunately Pakistan’s export in furniture has remained stagnant due to lack of facilities and information. Some serious incentives by the government are urgently required to improve this rich industry’s potential. "There is no competition of the Pakistani furniture around the world, but due to the lack of facilities it could not be introduced in many countries, said Atiq Mir, a furniture trader at the Aram Bagh Furniture market"(khan,2005, Furniture exports stack up on demand from Europe, Daily Times). 1.1Problem statement:

Pakistan is a leading furniture manufacturing industry and it is exporting annually around US$12 million worth of mainly wooden furniture. The fast growing furniture industry is aiming at developing a system designed to incorporate its tradition with modern functional demands, coupled with a feeling for the quality of the material and of aesthetic values. This study emphasizes on...
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