Cebu furniture makers wary of prospects

CEBU CITY — Some furniture factories here have started humming again, but exporters have remained wary, adopting a conservative outlook for 2010. Angela Figueroa-Paulin, president of the Cebu Furniture Industries Foundation, Inc. (CFIF), said furniture factories might simply be stocking up for next year after depleting their inventory, which had been kept to a minimum due to the global economic crisis. "Right now, there are activities. Some factories are busy. But we don't know if this is a positive sign," Paulin said, adding that the furniture sector has bottomed out. A number of furniture shops in Cebu have closed, resulting in job losses, CFIF consultant Ruby Babao-Salutan said. Export figures in the first quarter, normally a good time in terms of sales, dropped to $12.9 million, just a third of the year-ago level of $37.8 million. Revenues for the entire year were expected to decline by more than half from $400 million last year. Only 120 active members remain with the CFIF. Sixty others have either closed shop or temporarily shut down since the housing bubble burst in the US. Almost three-quarters of Cebu's furniture exports go to the US. "The worst has happened. But I don't want to say we're out of it," Paulin said. The survivors coped with canceled purchase orders, delayed payments and unpaid accounts by adopting three-day workweeks, tapping new markets and capitalizing on their design edge. Some companies have turned to the local market, supplying new hotels and condominium buildings, but Paulin said this was not enough to absorb the volume produced by exporters. If the sector recovers next year, it won't be to pre-crisis levels, Paulin said. "I don't think anybody can look to the end of next year. Everything — the business, the clients — has changed. We just have to be ready," she pointed out. Furniture exporters in Cebu are banking on their edge in design and craftsmanship to maintain a niche in the highly competitive global market. — Marites S. Villamor, BusinessWorld