Handicraft exporters losing craftsmen to foreign markets

BY REAGAN D. TAN, Reporter/BusinessWorld Handicraft makers and exporters are shifting toward high-value and high-workmanship products in a bid to maintain their niche against thriving competitors from Asia amid a strengthening peso. But some handicraft makers are more wary of the strategy as ever, citing cases of foreign firms "pirating" Filipino artisans to make designs of certain handicrafts that earlier only Filipinos could market as their niche. Charmaine C. Ong, manager of Cebu-based handicraft maker/exporter Tropical Souvenirs International, told BusinessWorld that to make matters worse, China has also begun "pirating" Filipino craftsmen. "In terms of quality, [competitors] are catching up. Cebuano artisans are also [paid] to teach competitors designing skills," she said. CRAFTSMEN A Cebuano artisan earns around P12,000 to P15,000 per month in the country, while some foreign manufacturers are offering them up to P60,000, she said. The handicraft or houseware sector, composed mostly of micro-, small- and medium-sized firms, has earlier complained of other countries allegedly copying Filipino designs and selling them at cheaper prices. Data from the Department of Trade and Industry (DTI) showed a 3.73% drop in export sales of housewares — including handmade basketwork, shellcraft, woodcraft, ceramics, and glassware — to $153.62 million in 2006 compared with $159.14 million in 2005. The figures were a far cry from the 2001 export sales of $194.91 million, $189.76 million in 2002, $179.05 million in 2003 and $170.24 million in 2004. Ten years ago, exports for handicrafts were at $240.81 million. Industry leaders have attributed the declining exports to stiff competition from China, Vietnam, Malaysia and Thailand, which have abundant supplies of indigenous materials that are also found in the Philippines as well as the strengthening peso. Ms. Ong, who said that sales have not been good, said the lack of capital inflow and government intervention have also contributed to the declining performance of the once top-earning sector because of the unique Filipino design and workmanship. Alexander Salvador Luzano, general manager of AJ’s Arts and Crafts Industries, agrees, saying that manufacturers are forced to adjust to make products with various components to make it more difficult or more pricey for others to copy. "If China copies like a xerox (photocopying) machine, they can do it in color now," he said in Filipino. "The more components you use [to produce goods], the harder it will be for them to copy [our designs]." He said, however, that such a strategy translates into added costs. Mr. Luzano, whose firm creates glass lamps and candle holders garnished with fossilized leaves, said some of his other raw materials needed to be imported, such as resins. Earlier, furniture exporters, who use some of the same indigenous raw materials that handicraft makers use, have also complained of a sluggish industry due to similar problems with competitors and the peso. DTI data show that furniture exports fell to $275.49 million in 2006 from $303.87 million in 2005 for a 9.3% drop. INTERVENTION The government, mainly through the DTI and its attached agencies, has been helping local handicrafts and furniture makers. The DTI Wednesday launched the 2007 Philippine National Trade Fair, which runs until March 18, at the Megatrade Hall of SM Megamall. The trade fair helps promote handicrafts and the furniture industry, and other local delicacies. Trade Secretary Peter B. Favila said Filipino houseware makers should bank on their "innate creativity" to "elevate their value in the global market." Product Development and Design Center of the Philippines, a DTI attached agency that serves as a consultancy firm for small- and medium-scale enterprises (SME), plans to come up with 1,363 new designs using indigenous materials to help boost handicraft sales. Also, the DTI’s SME flagship program One Town, One Product will launch 1,986 new products. On the domestic front, trade officials expect to generate P92.6 million in sales with more than 800 trade buyers expected to attend the trade fair.