Country Report  


MALAYSIA FURNITURE INDUSTRY – EXPORTING TO THE WORLD

By Professor K C Chan


A country blessed with rich timber resources, Malaysia’s furniture industry has thrived for over two decades. With the support of the huge upstream forestry, logging and sawmilling industries, this has contributed positively to the success of the downstream wood processing sector. Through the years, the Malaysian furniture industry has matured and in the process garnered a reputation as a reliable manufacturer offering high quality products.

In spite of the stiff competition especially from neigbhours such as China and Vietnam that experienced exponential growth during the last decade, Malaysia has continued to build on Kuala Lumpur Convention Centre, Venue of EFE 2016 her strength and retain her position as a strong exporter. Malaysian furniture products are priced competitively thus securing its export to over 160 countries. Its furniture industry contributes significantly to the country’s foreign earnings. For several years now, it has continued to hold the title as the third largest furniture exporter in Asia after China and Vietnam for several years, and ranks amongst the top 10 globally.

Malaysia is well positioned to continue the growth of its furniture production and export business in the foreseeable future according to Chun Chai Chua, President, Malaysian Furniture Council (MFC). With the continuing rise in the cost of Chinese exports set against the sharp depreciation of the Malaysian ringgit, local manufacturers are confident of their business in the short to medium term. In Chua’s exact words, “the outlook for the Malaysian Furniture industry is certainly bright.”


Chun Chai Chua, president, Malaysian
Furniture Council


Chua, managing director of Hup Chong Furniture Sdn Bhd, a leading Malaysian wooden bedroom manufacturer and exporter, was installed as president of MFC in September 2014. To the uninitiated, Malaysian Furniture Council is the result of a merger in September 2014 between two national-level organisations – the Malaysian Furniture Industry Council (MFIC) and the Malaysia Furniture Entrepreneurs Association (MFEA). The merge seeks to consolidate the views and strengths of all industry players to embark on a long-term, holistic approach to enhance the future development of the industry. Since taking on the role, Chua has been actively engaged in dialogue with the various state associations and key figures with the objective to unite the Malaysia furniture industry.

The Malaysian furniture industry currently boasts 700 manufacturers producing a variety of furniture products. It is especially strong in the making and export of case-goods (in categories such as dining, bedroom, occasional), upholstery and office furniture. Although much of its products for export are predominantly on an OEM basis, its ODM capabilities has been growing steadily over the years.

Design has been identified as one of the key challenges the Malaysian industry face today said Chua. To address this, government agencies and related industry associations have organized many programs to develop and enhance the industry’s design capabilities. While some companies work with foreign designers to tap their expertise, more and more companies are investing in the training of their own designers. According to Chua, one of the most recent program is the Professional Designers Program (PDP), a collaboration between the Malaysian Furniture promotion Council (MFPC) and the Malaysian Timber Industry Board (MTIB) with the support of the Ministry of Plantation Industries and Commodities (MPIC). Local manufacturers are encouraged to venture into ODM. More specifically, a team of four professional designers from Europe will mentor 12 local furniture designers with 20 prototypes to be produced at the end of the program.

Besides efforts towards ODM, there have even been attempts for the industry to go one level up towards OBM. Unfortunately little success has been achieved. For example, there is little heard now about the Malaysian Pride, an exercise to brand Malaysian furniture and companies through the appointment of outstanding companies as brand ambassadors and promoting them.

The other much lamented challenge the Malaysian furniture industry faces is the shortage of labour. To help the industry, Chua mentioned that MFC has been actively engaged in discussions with the relevant government agencies to ease the import of foreign labour. At the same time, furniture companies are investing in automation and machinery to reduce the dependence on manpower. This in turn also helps to increase efficiency and productivity.

MFC also made deliberate efforts to enhance the industry’s exports by promoting awareness with foreign media in key target markets, added Chua. During the middle of this year, MFC flew in an editor from Furniture Today, a leading magazine in North America. A week-long visit to a dozen or so factories was organized for the journalist to develop an understanding of the local industry, its top companies and their capabilities. The resulting write-up created positive exposure for the industry in North America, Malaysia’s number one export destination.

Besides the US, UK was also identified as a priority market. To grow export to this market, a trade mission was conducted in 2014 to study the market, its requirements and preferences and to meet with leading buyers. Upon return, participating companies developed new designs and products targeting the UK. Chua said the new designs will be presented at a Malaysian pavilion during The January Show, a national trade fair to be held in Birmingham in January 2016. He added that China is another market that is being targeted.

One of Chua pet project is the Export Furniture Exhibition (EFE), the annual furniture trade fair held every March in Kuala Lumpur, Malaysia. With a strong conviction of the importance of EFE, Chua has been personally engaged in the promotion of the event. Accompanied by the organizing team, he visits prospective exhibitors, disseminates EFE information and even go about distributing EFE brochures at his company’s booths at trade fairs that Hup Chong participates in overseas.

According to Chua, EFE is crucial for the Malaysian furniture industry. Entering its 12th edition next year, EFE’s competitiveness lies in it being a showcase for Malaysia’s best. It also helps that its booth rates are kept low to rank amongst the lowest in the region. This is to encourage participation as well as to allow exhibitors to take more space to feature more designs. Kuala Lumpur Convention Centre, where EFE is held, is a mature 5-star venue with comprehensive facilities within and in its vicinity. There are ample hotels, F&B outlets as well as shops. Visitors are also assured of the ease of transportation.

To visiting buyers, EFE is strong in its presentation of upholstery suppliers and is well balanced in the dining and bedroom segment, highlighted Chua. This is a view echoed by many visitors FFE spoke to in the past. However, to some, there may be a little confusion with the different 2016 event dates. They were initially changed to March 9-12 and during the later half of this year was again changed to March 5-8. According to Chua, there were significant consideration and trouble with the date changes but in order to best cater to exhibitors and visitors, the dates were decided as March 5-8 and they are final.

The positive prospects of Malaysian furniture is obvious. With a high level of commitment from the industry’s president and his colleagues, as well as everyone else working together to further improve their lot, the future of the industry is certainly bright.