International Wooden Furniture Markets

1 International WoodenFurniture MarketsA reviewq 2 PHHRs 2 y xg ehG ys 2 2g iiABSTRACT FOR TRADE INFORMATION SERVICES2005 SITC-821 INTINTERNATIONAL TRADE CENTRE UNCTAD/WTO (ITC) International TROPICAL TIMBER ORGANIZATION (ITTO) International Wooden Furniture Markets : A reviewGeneva: ITC/ITTO, 2005. xxxii, 233 of Wooden Furniture Markets in United States, Canada, China, Japan, Egypt, and selectedcountries in the European Union: France, Germany, Belgium, the Netherlands, Luxembourg, Spain,Italy, Denmark, and Sweden for each country, provides overview of basic demand factors andmarket drivers, domestic Furniture industry, market trends and developments, distribution channels,and market access conditions; deals with technical standards, as well as, International and nationalcertification schemes in the Furniture sector; identifies Furniture networks and clusters.

2 Outlinesstrategy for developing Wooden Furniture sector in tropical countries; outlines step-by stepvalue-added processing of Wooden Furniture in tropical countries, based on local conditions; includesstatistical data, selection of German Furniture standards, list of useful contacts in China, and list ofmembers of the Global Forest and Trade descriptors: Furniture , Wood products, Tropical wood, Value chain, market surveys,United States, Japan, Germany, United Kingdom, France, Canada, China, Belgium, Netherlands,Luxembourg, Spain, Italy, Denmark, Sweden, , French, Spanish (separate editions)ITC, Palais des Nations, 1211 Geneva 10, SwitzerlandITTO, 5th Floor, Pacifico-Yokohama, 1-1-1, Minato-Mirai, Nishi-ku, Yokohama, 220-0012 JapanThe designations employed and the presentation of material in this publication do not imply theexpression of any opinion whatsoever on the part of the International Trade CentreUNCTAD/WTO and the International Tropical Timber Organization concerning the legalstatus of any country, territory, city or area or of its authorities.

3 Or concerning the delimitation ofits frontiers or of firm names and commercial products does not imply the endorsement of ITC image on the cover: Antony Sandana, International Trade Centre International Trade Centre UNCTAD/WTO and International Tropical Timber Organization 2005 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in anyform or by any means, electronic, electrostatic, magnetic tape, mechanical, photocopying or otherwise, without priorpermission in writing from the International Trade Centre and the International Tropical Timber 92-9137-284-6 United Nations Sales No.

4 Furniture industries make a substantial contribution to development in tropical countries,producing important economic benefits and playing a significant role in promoting economic growth. Aswood-processing industries such as the Wooden Furniture sector develop, they create employment (whichin turn expands the tax base in the country), generate a trained workforce, and contribute to thedevelopment of physical and institutional infrastructure. These industries also contribute to foreignexchange earnings and stimulate investment in a range of secondary support the publication of the joint ITTO ITC reportWooden Household Furniture : A study of major marketsin1990, ITTO producer members fully recognized the potential of the Wooden Furniture sector in thecontext of sustainable development.

5 However, given weaknesses in human resources and the absence ofefficient processing technologies and marketing capacity in many tropical countries, it is not surprisingthat the current development of the Wooden Furniture sector remains less than optimal in many opportunities and challenges for the further processing of tropical timber were analysed in anotherjoint ITTO ITC report,Tropical Timber Products: Development of further processing in ITTO producer countries,which was published in 2002. The recommendations of that report included the production of a series ofmarket research reports on Wooden Furniture in the main consumer Markets of the United States, theEuropean Union, Japan and elsewhere in order to promote the development of further processing timbersectors in tropical countries.

6 The report also found a need to identify Furniture networks and clusters forthe creation of wider knowledge among the players involved and of the inter-linkages and synergieswithin the order to update information on Wooden Furniture Markets , ITTO commissioned ITC to conduct afurther study in 2002. This report presents the results of that study. It provides a wealth of informationincluding on the world s eight leading Furniture Markets : United States, Japan, Germany, UnitedKingdom, France, Canada, China, and Belgium, the Netherlands and Luxembourg, and the majorfurniture Markets of Spain, Italy, Denmark, Sweden and report also outlines a strategy for developing the Wooden Furniture sector in tropical countries.

7 Itpredicts that the overall balance of Furniture -making will move in favour of the southern hemisphere,where a green wall of wood is maturing in the plantations of the tropics, while natural forests willcontinue to provide unique raw materials for the world s Furniture industry. In order to make full use ofthe opportunity created by the coming availability of the plantation resources and the high-value nichemarkets for natural hardwoods, the report suggests that developing countries need to overcome severalhurdles. These include changing economics of logistics, low productivity and efficiency, inadequatequality control and management systems, and the often low level of value-added processing of Wooden Furniture in tropical countries will be developed step by step basedon local conditions.

8 manufacturers should move from standardized, simple products towards originallydesigned products with higher value, and ultimately to branded products. It is hoped that this process canbe accelerated through concerted local efforts and International hope this report will assist tropical countries in fully realizing the potential that the Wooden furnitureindustries offer for sustainable Sobral FilhoJ. Denis B lisleExecutive DirectorExecutive DirectorInternational Tropical Timber OrganizationInternational Trade CentreivAcknowledgementsThe study on which this book is based was commissioned and funded by the International TropicalTimber Organization (ITTO).

9 The report has been jointly prepared by Jukka Tissari, ITC market Development Officer, and thefollowing consultants: Professor Xuhe Chen of China, Dr Jegatheswaran Ratnasingam of Malaysia,Dr James Cunningham of the United States/Japan, Dr Paolo Gardino of Italy, Peter Rayner of the UnitedKingdom and Janne L yt m ki of Finland. Dr Markku Simula of Finland provided a peer review andsubstantive ITC, Alison Southby carried out the final editorial review of the report. Others who contributed wereTony Sandana, Peter F. Smit, Cynthia Zijlstra-Adriano, and Kathryn Della Corte in the ITC MarketDevelopment the ITTO Secretariat, the following individuals greatly contributed to the final outcome: Dr ManoelSobral Filho, Executive Director of ITTO, Emmanuel Ze Meka, Assistant Director (Forest Industry),Amha Bin Buang, Assistant Director (Economic Information and market Intelligence), Dr MichaelAdams, market Information Service Coordinator, and Dr Ma Hwan Ok, Projects Manager (ForestIndustry).

10 ContentsForewordiiiAcknowledgementsivNot eviiExecutive summaryixChapter 1 Introduction1 Background1 Competitive networking1 Furniture clusters2 Value chain analysis for the development of the Furniture sector3 Chapter 2 World overview5 World economic outlook5 World Furniture production6 World trade6 World imports6 Leading importers7 Imports from developing countries and China9 Developments in major markets10 Individual markets10 United States10 European Union11 Japan13 market access14 Promising market niches for developing countries15 Marketing, product development and promotion in ITTO producing countries15 Marketing and product development15 Promotion16 Cooperation between industrialized and developing countries17 United States17 Changing industry strategies17 Design as a competitive tool17 The European way18 Change in business concept18 European Union18 Japan19 Chapter 3 The world s eight leading Furniture markets21 United States21 Basic demand factors and market drivers21 Outlook22 Furniture consumers22 How much do they spend?