Indonesia predominantly exports furniture and handicrafts to the United States, with Japan and the United Kingdom following suit.
Referring to globalwood.org, the Chairman of the Indonesian Handicraft and Furniture Industry Association (HIMKI) emphasizes the critical importance of bolstering the competitiveness of the domestic handicraft and furniture industry amidst the ongoing global economic circumstances.
The Indonesian furniture and handicraft industry encounters intensifying competition within the domestic market, as Vietnam and Malaysia actively seek to enlarge their market presence. Embracing advanced technology stands as a crucial measure to augment the Indonesian furniture and handicraft industry’s competitiveness. HIMKI has urged the Ministry of Industry to allocate subsidies for technological innovation within the domestic furniture and handicraft sector.
HIMKI maintains a positive outlook, foreseeing a potential growth rate of 5-6% in the wood processing industry for 2024, notwithstanding economic challenges in key export markets like the UK and Japan. To stimulate market expansion, HIMKI has devised strategic initiatives and is actively investigating opportunities for exports to non-conventional markets.
The main destination for Indonesian furniture and handicraft exports is the US, followed by Japan and the UK. The Ministry of Industry in Indonesia is striving to boost productivity and competitiveness within the furniture sector. In 2023, the industry’s export value amounted to $1.8 billion.
In January 2024, the Industrial Efficiency Index (IKI) for the furniture industry reached 52.4, signaling expansion and reflecting the confidence of furniture companies in prevailing business conditions.
One of the initiatives undertaken by the Ministry of Industry is the ongoing program aimed at restructuring machinery and/or equipment within the wood processing and furniture sectors. Indonesia has implemented a program to restructure machinery or equipment in the wood processing industry, offering partial reimbursement for purchase transactions that meet specific criteria.
Starting in 2022, a total of 24 companies have engaged in the program aimed at restructuring machinery and equipment utilized in the wood processing and furniture industries, with an additional 15 companies joining in 2023. In 2024, the budget allocated for the industrial machinery and equipment restructuring program reached 7.5 billion IDR, with a focus on assisting 10 companies.
As per a company’s financial report for the fiscal year 2022, the program has contributed to enhancing the company’s efficiency by 10–30%, elevating product quality by 10–30%, and boosting productivity by 20–30%.
Source: Goviet.org.vn
