Furniture makers demand intervention fund because of obsolete technology

Business Day reports that furniture makers and other players in the wood industry in Nigeria are asking the Federal Government to float a single-digit intervention fund that will enable them purchase modern technology for wood treatment.

Furniture makers made this demand through the Manufacturers Association of Nigeria (MAN), urging the Nigeria Customs Service (NCS) to ensure effective enforcement of prohibition on imported furniture.

Furniture makers said governments at the federal and state levels should provide them with right of first offer framework to enable indigenous companies to become major beneficiaries of public furniture supplies.

“There is a need to upgrade skill acquisition centres to meet modern requirement in curriculum, training tools and equipment,” furniture makers said, in the 2017 Pre-Budget Memorandum.

According to them, there was a need for incentives to encourage investment in the industry, while calling on the government to reduce high tariffs on imported raw materials.

“Annual tree planting campaign should be resuscitated and enforced,” they said.

“The Standards Organisation of Nigeria (SON) should develop appropriate standard for the furniture sub-sector, in collaboration with the key players in the industry,” they added.

They further called for the development of clusters and provision of common facilities to reduce cost particularly for SMEs, and establishment of relevant technical training within the clusters to enhance capacity building and technical skills.

Furniture making is a big industry in Nigeria. However, it is dominated by international firms, especially Chinese companies, which import wood products and then assemble them locally. Importation of finished furniture products by Chinese and Indian companies are also on.

Major indigenous players are thriving, but are struggling to compete with foreign firms, according to local players. Some of the players in the industry are Alno Associates,  ITEX, and Universal Furniture, among others.

According to the Centre for Industrial Studies, world production of furniture is worth over $350 billion. In Nigeria, with over $400 billion economy, the industry is often looked upon as one for the illiterate in spite of availability of wood, semi-skilled personnel and growing needs for its products by the built sector.

More than 400 furniture companies of various sizes exist in the country, but most of them are cottage furniture makers.

Research carried out by Abimbola  Ogunwusi of the Raw Materials Research and Development Council (RMRDC) showed that in the 1960s and early 1970s,  Nigeria’s exports of wood products and agricultural commodities provided more than 70 percent of the Gross Domestic Product (GDP).
The research pointed out that over-exploitation of wood, over-emphasis on oil, among other factors, stifled this process. In spite of factors such as neglect of players, difficulties in getting wood, lack of planks from the saw mills, constant felling of trees by businessmen in collaboration with unscrupulous government officials, and high prices of these materials, among others, there is still a huge potential in the industry.

Capacity utilisation in wood/ furniture industry fell to 50.5 percent in the first half of 2016, from 55.3 percent recorded in the first half of 2015 and 60.0 percent in the preceding half.

Furniture production increased to N989.2 million in the first half of 2016 as against N552.05 million in the corresponding period of 2015 and N254.45 million in the first half of 2014.

The local sourcing of raw materials in the industry increased marginally to 43.6 percent in the first half of 2016, from 43.3 percent recorded in the corresponding period.

Source: Business Day