Pakistan Furniture Industry

by Remshay Ahmed, Reprinted from The Nation, Pakistan

With world furniture trade at $23.2bn, Pakistan needs to tap into this unexplored sector.

Pakistan has great potential to build and revive most of its sectors, which can in turn bring in great revenues. These include the real estate, furniture, and automobile sectors. The most forgotten of these remains the country’s furniture sector, which is known for its intricate wooden carvings on blocks of sheeshum and rosemary.

While reformation for the real estate and automobile sector has begun, the furniture sector’s production seems to be dwindling.

Furniture makers in Pakistan

Pakistan has huge potential for creating furniture, and its KP region is known for its exquisite woodwork and carving. The country has six hubs for wooden furniture – Karachi, Lahore, Sargodha, Chiniot, Gujrat, and Peshawar. Of these Chiniot, Gujrat, and Peshawar have the most famous woodworkers, who are known for their sophisticated carving technique and uniquely intricate patterns, making Pakistani furniture stand out all over the world.

For many years, Chinioti furniture has been in greater demand because of its detailed woodcarvings and brass work, all of which are very high quality. More than 80% of the overall demand for furniture in the country is met by Chinioti furniture. Gujrati industries are also making headway in establishing themselves in the region.

Peshawar industry, which once secured a very high position in its furniture making, has gone down significantly owing to depletion of wood (sheeshum), shortage of skilled labour, and load shedding. This has caused furniture production to go down significantly, leading to a significant loss of about $5 million/annually by 2014 alone. A market that exported its products to US, Italy, Spain, Germany, and Arab countries is facing a labour shortage now. One reason is the large amount of labour that has left the country to work in the Gulf states, where they are getting higher pays and are working in better conditions. This market in Peshawar, which used to employ around 14,000 people in 400 furniture shops, stands at a number of only 300 workers, presently.

Since 2007, the export of furniture from Pakistan has significantly gone down because of political and economic issues in the country. The industrial sector of Pakistan has also been adversely affected because of load shedding, making it very hard to keep the machinery running. This increases costs when and if generators are used.

Reviving real estate and automobile industries

Various sectors of Pakistan have faced a multitude of problems in the past decades, and have only just gained momentum. Pakistan’s real estate sector has just recently been revitalised as a result of increased FDI inflows in the country. Moreover, the interest of overseas Pakistanis in investing back in the country has also increased. Data at shows that real estate ventures in the country are becoming increasingly attractive for investors and developers, especially in Gwadar, and as a result, the overall realty sector has been able to redeem itself. The pace of real estate development has not only picked up because of investment from abroad, but also because of short-term investors and genuine home-buyers who have started investing in the realty sector as well.

Likewise, the automobile sector is re-emerging, and a continuous growth in auto sales has been recorded. Car sales have gone up by 3.12% from last year. Since May 2016, car sales have increased by 12.5%. Car leasing has also been increasing since the last two years, and reached a record high of Rs127 billion by the end of 2016. Car manufacturers like Hyundai, Renault-Nissan, and Fiat have all signed an agreement with Nishat Mills to open their production units at Gwadar. These, when set up, will contribute to the exports, and in turn the overall economy.

Both the realty and automobile sectors are seeing an increased interest from foreign investment because of CPEC, which sits at a crossroads between Europe and Central Asia. This economic corridor is expected to put Pakistan on the map for the geo-economic linkages that it will engender.

Moreover, if the furniture industry of Pakistan is also reformed, and a small investment or government intervention in the sector is lent, this traditional sector is expected to grow. However, there are a lot of other factors that influence the growth of the furniture industry, and they should all be taken into account.

Problems and future prospects

Deforestation plagues the forests of Pakistan, significantly reducing the supply of timber, which is primarily used to make furniture. Prices for all materials such as chipboard, timber, polish, etc, have increased over the years. As a result, it is costlier to make furniture now than it was 10 years ago. Also, most of this raw material, which is essential to furniture-making, is imported from abroad, which adds to the cost.

Furthermore, the furniture industry here is largely a smallscale or cottage industry. A sector that is sure to bring greater revenues in the future and is producing high quality products is suffering, and has been categorized as an informal sector. Thus, the woodworkers largely use obsolete machinery, inadequate tools, and manual labour for manufacturing wooden furniture, which adds more to its cost than the value.

In Peshawar, buyers have stopped coming to these rather far-off markets because of the adverse security situation in the country, which has dampened overall prospects for this market. Their preferences, however, haven’t dropped – just their visits to these markets. This is a positive sign, indicating that the demand for these products still exists.

Pressure has started mounting on local producers of furniture, as exports from Thailand and South Korea have started flowing extensively in Pakistan. Of these, the biggest exporters of furniture worldwide are Italy, Germany, and Canada, while the biggest importers for wooden furniture are US, Germany and France.

There are many e-portals that are now facilitating the trade of automobiles and other goods, respectively. Following the same pattern, e-business for woodwork and furniture can be developed to foster growth in this sector.

Pakistan has a huge furniture market that it can explore. The total world trade in furniture is estimated to be $23.2 billion, with a share of 77% wooden and 17% metal furniture. If Pakistan gives a formal shape to its furniture sector, it will be able to have a share in global furniture export as well. There is vast potential in this sector, which Pakistan needs to tap into again.