Indonesia lifts ban on rattan exports
By Thomas Russell -- Furniture Today, October 3, 2005
High Point — Indonesia's government has lifted a ban on rattan exports, drawing protests from the country's furniture manufacturers, who fear competitors, particularly in China, will gain more access to the key raw material.
Indonesia's president indicated last week, however, that the rattan policy would be reevaluated and restrictions may be imposed again to protect the domestic furniture industry.
Many of those familiar with Indonesia believe rattan has been exported illegally, although making it legal could open the door for even more exports.
"There are a lot of people of the opinion that a lot was being sold illegally anyhow," said Kevin Sypolt, chief operating officer of rattan and wicker specialist Padma's Plantation. "I know people are nervous about what the repercussion will be from (making exports legal), but I think there will be a lot of (rattan) sales regardless of what the law is."
Padma's and other U.S.-based furniture importers are keeping a close eye on the situation, but don't expect any immediate impact even if the ban isn't renewed.
"The best weaving in the world is done in the Philippines, and the second best is in Indonesia," said Brett Hatton, CEO of case goods importer Four Hands. "China is less sophisticated in weaving. They don't have people trained the way they do in the Philippines and Indonesia.... In the Philippines and Indonesia, they have been doing it for hundreds of years and are darn good at it."
Indonesia had banned the export of rattan logs since 1985, raw rattan since 1986 and semi-processed rattan since 1988. Lifting the ban was expected to help Indonesians benefit from the sale of forest resources.
But last week, the country's president, Suslio Bambang Yudhoyono, said the government would reassess the ban with an eye toward crafting a policy that would be of the greatest economic benefit to all parties, including manufacturers.
Some say that lifting the ban could devastate the Indonesian rattan furniture industry. If a large rattan export market develops, local availability could be severely limited.
"Indonesian workers could be out of a job because there may not be a lot of rattan poles (left) to make furniture with," said Allan Palecek, president of case goods importer Palecek.
Palecek has been sourcing from Indonesia since the late 1970s. Today, about 20% of its line is from Indonesia. Palecek said his company uses a lot of semi-finished rattan.
Like Four Hands' Hatton, Palecek said Indonesia has an advantage thanks to its talented work force. The availability of rattan also gives Indonesia some price advantage.
With the export ban lifted, Indonesia's furniture industry will have to compete with Chinese factories for rattan.
"It can be a devastating thing for (Indonesian furniture) exporters," Palecek said.
Sypolt of Padma's Plantation said his company gets about 80% of its line from Indonesia, with about half utilizing rattan poles. It's too soon to tell if Padma's will shift sourcing, he said.
