Furniture makers urged to cluster to stay afloat

The Canadian Executive Service Organization Business Advisory Project Phase 2 (CESO-BAP2) has expressed willingness to help strengthen the design and product development niches of Cebu-made furniture.

However, furniture makers are urged to form a cluster so that CESO-BAP2 can input an effective support mechanism to further boost the sector's competitive edge.

CESO-BAP2 is a bilateral project between the Philippines and Canada that started in 1999 and is funded by the Canadian International Development Agency (CIDA). It aims to increase the operating effectiveness of Small and Medium-Sized Enterprises (SMEs) in Visayas and Mindanao.

During the re-introduction of the program to Cebuano SMEs graced by Canadian Ambassador Peter Sutherland early this week, Cebu Furniture Industries Foundation Inc. (CFIF) president Michael Basubas said that although there is an obvious need for the furniture manufacturers to unite, clustering is a bit difficult to attain.

"Clustering is quite difficult for us, we need to identify a common ground," Basubas said.

CESO-BAP2 country project manager Timothy Moiket said the program can provide help to the "struggling" industry through strengthening the product development and design.

"To beat China, and other countries in terms of your strength in design and product development, is a motivation enough for the industry to start clustering," Moiket told the furniture makers in Cebu.

Unlike Canada's similar project also funded by CIDA, the Pearl-2 program, which focuses on helping Business Support Organizations (BSOs), the CESO-BAP on the other hand, is extending technical, marketing, organization and management system, technology, to individual companies, and cluster industries.

Earlier the CFIF called that key players in the furniture making industry in Cebu, through Cebu to be alert and invest heavily in marketing and product development, as Asian neighbors are not sleeping and now eating the Philippine's share in the world's furniture exports.

"There's no such thing as security nowadays. The landscape is ever changing. Let us admit that we are about to be left by the race in a very tough competition," said CFIF board member Lorie Boquirin.

Based on several studies made by international organizations on the State of (furniture making) Sector Report such as the Canadian International Development Agency (CIDA) International Trade Center, CSIL-Milano, the Philippines is slowly lagging behind in the competitive, and may lose the opportunity to get its share in the US$210 billion furniture market in the world.

In the six Asian countries competing in the world furniture market, only the Philippines registered a continued negative growth since the year 2000.

The country is now suffering from negative six percent growth in the furniture exports, while China, Malaysia, Indonesia, Thailand and Vietnam are all enjoying positive growth.

In the last six years, China enjoyed an average of 29 percent growth, the Philippines' close competitor, Vietnam which was way behind in furniture export before the year 2000, now reaping an average of 38.6 percent annual growth, and highest performer in all the six Asian countries.

Of the US$210 billion furniture market in the world, the Philippines is getting .31 percent, while China has captured 17 percent share.