Furniture exporters resort to layoffs, seek new markets amid slowdown in US

MANILA, Philippines - Furniture exporters are cutting back on labor, looking at local and non-US markets, and finding niches in design and marketing services to cope with weakened demand from the US, industry leaders said. Nicolaas K. De Lange, former president of the Chamber of Furniture Industries of the Philippines, now chairman of the Association of Southeast Asian Nations (ASEAN) Furniture Industries Council, said local furniture exporters are making operations leaner as exports to their main market, the US, decline. "Speaking for my own factory, exports are down 25-30% for September to October compared with the same period last year. I’ve talked to two or three factories in Pampanga and theirs are pretty slow too," Mr. De Lange, owner of furniture firm Designs Ligna, said in a telephone interview late last week. Furniture and woodcraft corner the fifth largest share or 2.5% of total exports, August data from the National Statistics Office showed. Furniture exports fell by almost a tenth in August versus the same period last year. Cebu Furniture Industries Foundation, Inc. Executive Director Ruby B. Salutan earlier pegged the US share of the province’s exports at 60% to 70%. "We retrenched a fifth of our employees in June. Others scaled down even before that...Because our costs are higher, we’re having design made by companies abroad rather than have a large organization here." Mr. De Lange said. His workforce has been whittled down to 90 in 2008 versus 220 two years ago. Some of his furniture are now manufactured in Indonesia. Furniture makers are also looking to sell their wares to buyers here and non-US markets abroad. The Middle East and Australia can be potential export markets for furniture makers, Philippine Exporters’ Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. said in a telephone interview. "Because of the recession in the US, there won’t be new construction, no new houses and hotels. Demand for furniture will weaken. Because of that, we are trying to develop new markets," Mr. Ortiz-Luis said. Mr. De Lange, for his part, said his furniture firm would be supplying to a Jamaican hotel next year. "To supplement regular retail business, we’re looking at a more active role in design and marketing," he added. — Jessica Anne D. Hermosa, BusinessWorld