Market Outlook  



Trends in Nigeria's Furniture Market

By Odinaka Anudu, Business Day Media Ltd


FURNITURE-MAKING IS OFTEN A NEGLECTED industry in Nigeria. But not so in many developing and developed nations, where the industry creates huge employment opportunities and foreign exchange earnings.

The Centre for Industrial Studies says world production of furniture is worth about $350 billion. In Nigeria, with a $510 billion economy the industry is often looked upon as one for illiterate people in spite of availability of wood, semi-skilled personnel and growing needs for its products by the built sector players.

Research carried out by A.A Ogunwusi of the Raw Materials Research and Development Council (RMRDC) showed that in the 1960s and early 1970s, the country’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, overemphasis on oil, among other factors, stifled this process. In spite of factors such as neglect of players, difficulties in getting wood, planks from the saw mills, constant felling of trees by businessmen in collaboration with unscrupulous government officials, high prices of these materials, among others, capacity utilisation is still high.

It has reached 326,172m3 of round log equivalent, according to the research. This was 217,700m in 1988 and 250,714m3 in 1992.

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

“Deficiencies in technologies and finance, lack of qualified manpower and their rapid turnover are major problems militating against optimal development of this sector. Thus, technical training is a priority to promote production to international standard and customers requirements,” said Ogunwusi.

The global furniture market is rising, with analysts forecasting the compounded annual growth rate (CAGR) estimate of 3.53 percent over the period of 2012 and 2016.

Information from Reuters showed that one of the key factors contributing to this market growth is the boom in real estate industry. The global furniture market has also been witnessing the production of eco-friendly furniture. However, the shortage of timber supply often poses a challenge to the growth of this market says Reuters.

The key vendors dominating this space in the global market include Ashley Furniture Industries Ltd., IKEA International Group, Sears Holdings Corp., and Steelcase Inc. Others vendors mentioned in Reuters report are Haworth Inc., Herman Miller Inc., HNI Corp., Kimball International, Knoll Inc., KOKUYO Furniture Co. Ltd., and Masco Corp.

Many furniture makers are finding markets in China and other economies with large population. Recently, Wisconsin-based Ashley Furniture opened its second retail store in China.

“In China, apartments are built with standardised plans that include very small dining rooms, so everybody wants a dining table to be a certain size – and one that we don’t offer in the US,” said Paul Dotta, Ashley’s vice president of international business, who lives in Shenzhen, China, in an interview with Bloomberg.

GOK International, a Chinese furniture maker is hiring 300 employees by the end and expects the overall average wage for employees to be $30,000 a year.

From 1985 to 2005, the annual growth rate of China’s furniture output averaged 15 percent. In 2006, the exports of furniture from China reached $17.4billion, ranking first in the world, according to Alberta China Office.

In world furniture production, China occupies 20 percent, while the US has 19 percent share. Italy has 8 percent share, while France, the United Kingdom, among others, have 3 percent share each. Developing countries occupied 15 percent while other emerging markets make up 13 percent.