Getting houseware exports moving

The houseware manufacturing sector, considered as one of the oldest industries in the country, is making a last ditch effort to revitalize itself and halt a five-year decline in production and sales.

Since 2000, the industry has been experiencing a decline of approximately seven percent in exports year on year. This is putting at risk the businesses of more than 5,000 micro-, small- and medium-scale operations employing directly and indirectly more than a million workers.

The houseware sector contributed about $170 million in export earnings in 2004. Two-thirds of the earnings comes from the sale of baskets, wickerwork and textile materials, while the rest is contributed by shellcraft, ceramics, stoneware, decorative glass items, and lamp bases and shades.

Houseware manufacture utilizes a lot of local raw materials such as rattan, wicker, bamboo, banana hemp, and a host of indigenous materials found only in the Philippines. While the US continues to be our major market, the Philippine share is now just a miniscule two percent of the $3-billion business.

China remains the strongest exporter of houseware in the global market. In 2004, China supplied 67 percent of the US’s houseware needs. In the world, China and Hong Kong have cornered more than 50 percent of global houseware exports.

Other countries like Germany, UK, Italy, France, Portugal and the USA account for single digit shares in the global trade of houseware exports. The Philippines does not even figure with prominence in it.

Carving a niche

To a limited degree, the Philippines’ houseware sector had tried to shift their production from low-end to mid-end and high-end markets over the last few years after recognizing the competitive onslaught of China in the global market. The strategy was to carve a unique competitive niche, much the same tack successfully employed by local furniture makers during the recent years.

So far, the decline in world market share has continued. There had been sporadic orders from some countries mainly from the Middle East in previous years, but these had not mattered in view of the overall decline in sales in both the US and Japan markets.

Pearl-2 support

Acutely aware that something drastic had to be adopted to stem the decline in the houseware sector’s competitiveness and contribution to the national economy, the Department of Trade and Industry summoned the assistance of the Canadian International Development Agency through Pearl-2 (Private Enterprise Accelerated Resource Linkages Phase II) project.

The $8.6-million five-year project (2002-2007) focuses on supporting the development of small and medium enterprises in the Philippines that create meaningful jobs by strengthening business support organizations such as the Philippine Chamber of Handicraft Industries, the Cebu Gifts, Toys, Houseware Exporters and Manufacturers, and the Association of Negros Producers.

The houseware sector is one of the six chosen areas of assistance aligned with the DTI’s overall investment strategy plan. The other five are furniture, food processing, wearables, natural and organic products, and IT. The support strategy includes provision of training, market and export enhancement, policy studies and advocacy.

Pearl-2 is extended from two previous CIDA-funded activities - the Enterprise Support Project and Pearl-1. Both had been successful in introducing the needed interventions that have contributed to revitalizing small and medium enterprises in specific sectors.

Using information

One of the Pearl-2 support activities that is given to the houseware manufacturing industry involves providing updated information that could help concerned companies and business organizations to improve on their competitiveness.

Based on the studies done since 2003, the houseware sector continues to be most vulnerable with regards its inbound logistics, or the quality of raw materials procured by manufacturers. Manufacturers continue to suffer from lack of standards, quality control and proper handling skills of raw material gatherers and suppliers.

Likewise, there is a need to strengthen research and development on raw materials to improve their durability and quality. There is also a dearth of reliable information on the acquisition and inventory of raw materials.

Pearl-2 information also pointed to the poor level of production processes used by houseware manufacturing firms. Even if the products are for high-end markets, the inconsistency in product quality is often cause for disappointed buyers not to reorder during the next season.

Like many fledgling or struggling Philippine industries, the houseware sector also suffers from poor packaging techniques, as well as maximized use of information and communications technology to streamline further its operations.

While houseware manufacturers are choosing to cater to the higher priced global market, this is not a sure way of resuscitating the sector. Clearly, the US is a strong buyer of housewares; this should be the focus of our manufacturing strategy.

Perhaps we can learn a thing or two from China, which now has grown their houseware exportation to $1.2 billion. Or perhaps, we can look at other sub-sectors, such as the production of artificial flowers and indigenous textiles. Definitely, there are a hundred ways of skinning the cat. All we have to do is think out a plan and relentlessly pursue it to completion and success.

In the meantime, we have to thank countries like Canada that provide resources that truly will allow our small and medium enterprises with the tools to move forward.

Take a stand for your future

PEP Coalition, a group of planholders who have been trying to make Pacific Plans Inc. face up to their contractual obligations under the so-called open-ended educational plans for over a year now is holding a national assembly of pre-need victims on Saturday, April 29, at the St. Paul Pasig gym.

Those who still have the energy and stamina to pursue what many are thinking as a futile advocacy, please take a stand for your children’s future. The assembly starts at 8 a.m. and will end at 12 noon. Registration is open at 7 a.m.

Historical day for poker enthusiasts

With over 350 poker players participating in satellite tournaments during the past three months and P1.6 million in guaranteed prizes, the Philippine Poker Tour Million-Peso Hold’em Championship has turned up to be the biggest non-wager poker tournament to date.

Poker tournament enthusiasts from the south, mostly from Cebu City, from far north as Baguio, Angeles City, Calamba and neighboring towns, and from Metro Manila will converge at Airport Casino Filipino Parañaque starting Saturday, April 29, up to Sunday, April 30, and engage in a mind game competition that involves game skills, mental discipline, physical endurance, patience and lots of psychology.

Just like all other games of skill, when the level of competition is on even keel, the ultimate champion is the one who gets a fair share of the breaks of the game and a bit more of Lady Luck’s smile.

At the end of two days of intense struggle, the last man standing will receive the one million-peso prize pot and the prestigious Championís Bracelet, the dream of all poker players, new converts, or veterans.

Last minute participants have until 1:30 p.m., Saturday, April 29, to register at the Main Event tournament area. Rules of the competition and other terms and conditions are published at the web site, www.PhilippinePokerTour.com. Copies of these rules may also be obtained from the Secretariat by calling 817-9092 or 812-0153.

To all participants, may you have your share of good deals and congratulations for being part of local poker history in the making.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected] or at [email protected]. If you wish to view the previous columns, you may visit my website at HYPERLINK "http://bizlinks.linkedge.biz.