Pioneers of Singapore industrialisation
The furniture industry was established as early as the 1960s and is now a significant contributor to the economy, reports VINCENT WEE
THE furniture industry in Singapore is long-established but little publicised. It has, in fact, been part of Singapore’s economic landscape since the 1960s and was among the pioneers of the country’s industrialisation drive, says International Enterprise Singapore (IE Singapore).
Sitting pretty: Renewed interest in lifestyle and consumer spending in the US and Europe, and new demand created by China and Russia have opened up new avenues for Singapore furniture firms
And furniture continues to be a significant contributor to the economy. IE’s figures show that in 2006, the value of the industry’s trade grew 11 per cent to reach $1.1 billion. According to the Singapore Furniture Industries Council (SFIC), the bulk of the industry’s core business is divided into three primary groups - manufacturing, retail/wholesale, and contract-based work.
Based on the latest available Department of Statistics figures, Singapore has 681 furniture manufacturers employing 6,953 people, and 65 per cent of the 172 larger establishments have subsidiary manufacturing plants in regional countries like China, Indonesia, Malaysia, Thailand and Vietnam. And there are about 580 wholesalers employing 3,572 employees and 828 retailers with 3,870 workers in the domestic market.
Venturing abroad
In recent years, like many other sectors of the economy, the furniture industry has sought its fortunes abroad, with varying degrees of involvement. IE Singapore highlighted the rising affluence and boom in the property and hospitality sectors in high-growth markets such as India and the Middle East as places Singapore furniture companies would be able to extend their global reach.
Renewed interest in lifestyle and consumer spending from major regions like the US and Europe, and new demand created by developing giants like China and Russia have also opened up new avenues for Singapore furniture firms, IE Singapore says. Companies are now also exporting to non-traditional markets as varied as Djibouti, Guadeloupe, Iceland, Slovenia, Malta, Cyprus, Costa Rica, Puerto Rico, Chile, Peru, Bahrain, Israel, Oman, Lebanon, Qatar, Georgia, Morocco, Reunion Island, Guam, Kazakhstan, Mexico, and Ukraine.
Singapore-based companies have set up a commercial presence in over 16 countries including the US, as well as in major Asian markets like Japan, Taiwan, Malaysia and Australia.
Contract furniture companies have also made their mark by winning prestigious overseas projects.
For example, Design Studio secured a contract for Donald Trump’s 1,282-unit condo-hotel project, the Trump International Hotel and Tower in Las Vegas last year, while Cheng Meng is on the approved vendor list for many international five-star hotel operators and has completed several projects in the US. It also outfitted the super luxury Eastern & Oriental Express train, the Grand Shanghai Theatre, the Reethi Rah Resort in the Maldives and Ritz-Carlton Singapore among others.
The need to go overseas has had two driving factors: firstly, because the domestic market is too small; secondly, to lower production costs to better compete on the international stage.
Competitive advantage
Singapore companies have a competitive advantage in that they have earned a strong reputation for producing innovative, well-designed and high-quality furniture which is widely accepted worldwide.
The other big plus in the highly competitive global furniture market is the reliability and efficiency for which Singapore companies are renowned. Singapore-run production facilities are able to provide prompt delivery and service at competitive prices and with little risk of default.
However even with these advantages, the international competition is increasingly becoming intense. Companies are often squeezed between pressures from the top and bottom. At the top end, they compete with long-established European and American manufacturers who churn out high quality original design furniture.
In the mid to lower-end markets, they have to fight aggressive price competition from emerging markets with cheap production like China and Vietnam.
IE Singapore works with private sector organisations like SFIC and other government agencies to help Singapore companies go abroad.
Furniture however, is different from most consumer goods in that it is bulky and samples cannot be easily transported to show potential customers. Thus, international trade shows are the main medium by which furniture companies can show their products and meet buyers.
IE Singapore also provides other support by working with SFIC to identify suitable manufacturing facilities and locations within South-east Asia for them. Other avenues like SFIC’s Young Exporter’s Programme help to educate new exporters as they expand regionally.
Source : Business Times - 13 Dec 2007
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