The furniture industry in Bangladesh has seen significant growth, with an annual growth rate of 19-20 percent. The current size of the furniture industry in Bangladesh is worth Tk 25,000 crore, and there has been a remarkable 267 percent surge in furniture exports over the past decade. Leading this growth is HATIL, the country’s leading furniture brand, which initially focused on door manufacturing and later expanded its product range to include household furniture items.
HATIL now has 75 outlets across the country and 18 outlets overseas. The Chairman and Managing Director of HATIL, Selim H. Rahman, discussed various aspects of the thriving sector in an exclusive interview. He highlighted the government’s role in encouraging the growth of the local furniture industry and the need for proper policies and regulations to establish a structured system for consumers and manufacturers. Selim H. Rahman, emphasized the importance of public-private partnerships and communication with the government regarding policy issues in the furniture industry.
He also addressed the challenges of global supply chain disruptions, stating that HATIL sources raw materials sustainably from overseas. However, supply chain disruptions could pose significant threats to their business. Selim H. Rahman, mentioned the importance of finding local alternatives for certain materials and diversifying import options to mitigate such risks.
How does the present state of the local furniture industry compare to its past status?
Selim H. Rahman: The furniture sector in Bangladesh has undergone remarkable transformation in recent years. To clarify, there was a period when a considerable quantity of foreign-imported furniture was essential to satisfy consumer requirements. However, this reliance on imports has since waned, thanks to the capacity of local manufacturers to meet the demand.
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The government has played a pivotal role in this evolution, actively fostering the growth of the domestic furniture industry. In this regard, the government has extended policy support and created opportunities for industry development.
What are the main obstacles facing this industry?
Selim H. Rahman: In our country, the business culture often leads to multiple entrepreneurs entering the same sector when a business based on a particular product or demand is initiated. This phenomenon contributes significantly to the growth of various sectors within the Bangladeshi furniture industry. However, it’s essential to recognize that some participants in the furniture market disregard proper manufacturing practices and fail to meet industry standards due to the absence of adequate policies and regulations. Conversely, compliant brands incur higher production costs, including taxes and VAT imposed by the government, which eventually leads to elevated prices for consumers.
What is urgently needed is the establishment of a structured system that benefits both consumers and manufacturers. The development of industry guidelines is of paramount importance. The absence of specific criteria or policies governing the furniture industry also results in revenue loss for the government. Implementing reforms has the potential to unlock the industry’s full capabilities.
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Moreover, there is significant employment potential for young people if they receive appropriate training. Furniture is an essential item for human civilization, as every household requires some form of furniture, even if it’s minimal.
Bangladesh is set to graduate from its status as a Least Developed Country (LDC) by 2026, prompting discussions about export diversification. How is the furniture industry preparing for this change, and what steps is HATIL taking in response?
Selim H. Rahman: As of now, we have not received detailed information about the opportunities, benefits, and challenges associated with our LDC graduation. Nevertheless, it is clear that post-graduation, we will have to compete in the global market without the trade benefits we currently enjoy. To remain competitive, we must develop the necessary capabilities. We have yet to witness substantial preparations in this regard.
One key factor in the growth of industries is public-private collaboration. Can you shed light on the interaction between the government and the furniture industry concerning policy matters?
Selim H. Rahman: There is some ongoing dialogue in this area. A notable issue is the scarcity of skilled labor required for the industry’s growth. It is imperative to address this through adjustments in our educational curriculum, particularly in polytechnic institutes, where woodworking is not a primary focus.
Another challenge is the perception among young individuals regarding career choices. Carpentry is often viewed as more complex compared to the garment industry. Due to these societal perceptions and other factors, many educational institutions have discontinued related courses. We have discussed these concerns with the government, and efforts have been made to enhance relevant curricula. Both government and private sector collaboration is essential, and communication between the two is critical.
Furthermore, government policy support is crucial for any industry’s prosperity. The Ready-made Garment industry’s substantial growth can be attributed to government policies in the 1980s. Similar growth potential exists for the furniture industry if it receives essential policy support, such as duty-free import of raw materials, among other measures.
HATIL currently relies on external suppliers for raw materials. In light of the recent global supply chain disruptions triggered by the COVID-19 pandemic and the Russia-Ukraine conflict, what strategies has HATIL implemented to navigate these challenges?
Selim H. Rahman: HATIL does not use locally sourced wood for its furniture; instead, we acquire it sustainably from overseas sources. If disruptions occur in these sources, it poses a significant challenge. This could potentially force us to either halt operations or shift to locally available wood, which conflicts with our commitment to environmental sustainability. Additionally, certain raw materials we import are not produced domestically, and a supply chain crisis could pose a substantial threat to our business.
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We are also exploring local alternatives for materials that were previously sourced from abroad, aiming to reduce dependency on imports. While not all materials have local alternatives due to a lack of industry for specific products, we continuously strive to find local substitutes. Research and development play a critical role in discovering these alternatives. Furthermore, we are diversifying our international sources to mitigate the risks of major supply chain disruptions.
Source: www.unb.com.bd
