Malaysia looking to gain export edge
Show draws 19,549 to Kuala Lumpur
Gary Evans -- Furniture Today, May 19, 2008
KUALA LUMPUR, Malaysia — When the world’s biggest consumer tightens it belt, everyone feels the pressure.
Dancers at the 14th annual Malaysian International Furniture Fair was getting under way promote the dates of next year’s fair.
Buyers check out dining furniture from one of the show’s 400 exhibitors.
New Pk Furniture Décor, a Malaysian bedroom maker, gives this chest an unusual look with V-cut drawers and wood pulls.
Koda Woodcraft Sleek uses leather and simple wood chairs to show the versatility of this trestle table.
Novel uses several materials for this dining group — walnut, wicker, suede, polished chrome and a Lucite lazy Susan.
Units from J.B. Wood Inds. can be grouped together to form an entertainment and storage wall.
Downtown Kuala Lumpur’s skyline features the famous Petronas twin towers, the 88-story structures that were once the tallest buildings in the world.
But there was little pessimism about the declining U.S. economy in the exhibition spaces of the 14th annual Malaysian International Furniture Fair here in March. Discussion of the U.S. real estate slump, weak dollar and other ills was as common as the daily greetings in the Putra and Matrade exhibition centers, but the sag in U.S. business was countered by the growth of orders from emerging countries with booming economies, like China.
Attendance at the show was 19,549, with 6.5% coming the U.S. and Canada, 20.9% from Europe, 12.4% from the Middle East and other Asian countries where the economies are stronger. International attendance of 7,410 from 134 countries exceeded the expectations of Dutuk Tan Chin Huat, chairman and managing director of the show.
Also topping Tan’s expectations were orders generated at the show, which is geared to exports. He hoped to stay even with last year’s US$666 million but according to external audited results, sales hit US$690 million.
That will help Malaysia in its goal to move from the bottom of the world’s top 10 furniture exporters back into the top five, officials hope.
“Malaysia was overtaken by low-cost producers like China and Vietnam, which came out of nowhere. But we have managed to maintain cost and come up with furniture of higher quality and better design, which should position us back in the top five,” Lim Wim Keng Yaik, minister of energy, water and communications for the Malaysian government, said at the fair’s opening.
Lim, who is retiring as minister, said that in the late 1980s despite its timber resources (70% of Malaysia is covered with forests), the country only managed to export RM40 million in furniture while its land-strapped neighbor, Singapore, exported RM70 million. (The current currency exchange is 3.25 ringgit Malaysia (RM) to the U.S. dollar.)
“Now, the industry should be proud of itself because it has grown 200 times,” Lim said, with current exports of RM8 billion with expectations of hitting RM10 billion by 2010.
Lim was minister of primary industries in the 1980s and was instrumental in the creation of the first MIFF in 1995. “MIFF has developed beyond my widest dreams since those early days,” he said. He added that official statistics indicated that 30% of the country’s furniture exports each year stem from the show, which expanded in the past several years should be enlarged even more to keep pace with Chinese exhibitions, Lim suggested.
The United States accounted for about a third of Malaysia’s exports in 2006. In 2007, U.S. showed that imports to the country from Malaysia declined by 1% from the previous year, to about $760 million.
“Our overall outlook for the industry in 2008 should remain stable given the slowdown in the U.S. economy, but mitigated by the high demand in the Eastern European bloc including Russia, India and the Middle East regions,” said Dato Yong Seng Yeow, executive director of MEICO Chipboard.
The outlook was echoed on showroom floors.
Gary Goh, export manager for leather manufacturer Lorenzo International, acknowledged the U.S. economic woes but said, “We sell to the U.S., but it’s very small.” He said other markets, including those with more than 60 of the company’s franchised stores, are going strong. “Singapore is very rich; the Malaysian economy is not so bad; Vietnam is booming; Brunei is doing well; Thailand is doing well….”
Many Malaysian manufacturers are leaving low-cost products to countries like China and Vietnam and are working to move upward in quality and design that isn’t easily duplicated.
That’s what case goods producer Ascent Furniture is doing, relying on quality materials such as cherry veneers, said Jessie Tiam, a marketing executive. She said the company started selling in the U.S. three years ago, showing at the Las Vegas Market, and found that buyers liked the company’s products.
“But people asked if we had a distribution center and could do large quantities,” she said. Now, the company has partnered with a San Francisco warehouse and sells in California under the name New Pacific Direct. It will show again at the summer Las Vegas Market in space B-1128.
Tiam said the company feels the pain of the weakening U.S. dollar, but shares and absorbs the loss with its U.S. partner. “We have to sacrifice from both sides to keep the partnership going,” said, adding, “For us, it’s a good start. It’s a long-term partnership.”
White Feathers, which sells sofas and recliners that would fit U.S. stores, has grown since opening in 1998. It now has a factory in Malaysia and two in Vietnam and sells in 30 countries, mostly in Europe, the Middle East and Asia and has eyes on the U.S. market.
“We don’t want to expand our arms too wide,” said K.F. Tang, marketing director, “but we are going after the U.S.”
