A worker piles various types of semi-finished furniture before being sold to collectors in Ngabul village, Tahunan district, Jepara regency, Central Java, Friday (24/2). In its development, furniture and carving craft industry experience ups and down due to the problems of raw materials to marketing. Currently furniture business people in Jepara have to have timber verification and legality system to penetrate the international market.
CIREBON, KOMPAS – Furniture makers using rattan fear they will not be able to compete in the international market because of the difficulty they face in getting the raw material. This could potentially cause a decline in customer loyalty, which would easily trigger a decline in the export value of furniture.
“Recently, a customer from the Unites States had to wait for three months because the raw material of rattan that we needed was not available. I am left to accept paying for the compensation,” said Kampung Wisata Rotan Galmantro foundation chairman Solihin on Wednesday (2/8) in Cirebon, West Java.
The difficulty he was referring to was the lack of type and size of the rattan. To make a chair, for example, a factory needs rattan sticks 22 millimeters to 32 millimeters in diameter.
According to Solihin, this was not only a disadvantage to industry players, but it also affected the trust of the international market. The condition could worsen when the demand is high in October-June.“Companies could be ‘crossed out’ and customers could turn to Vietnam and China. The uncertainty regarding raw materials has made industry players afraid of promoting their businesses,” he said.
This situation was caused by a number of problems. One of them is the lack of information of business players in the upstream and downstream sectors. Industry players in the downstream sector are not informed of the type and size of raw materials available in the upstream sector. Likewise, those in the upstream sector are not aware of the needs of those in the downstream sector.
Lengthy supply chain
The supply chain of the rattan industry is very long. Rattan that is produced by farmers in the forests of Kalimantan, Sulawesi and Sumatera are first collected by small collectors in the region. Then, the rattan is taken to big collectors in Surabaya, East Java, to be cleaned and polished and then sent to a raw material factory in Cirebon before being used by companies that produce rattan products.
“There should be data of the needs and availability of raw materials. With the technological advancements of today, industry players should be able to know this,” he said.
The head of the furniture, rattan and bamboo department at the Indonesian Furniture and Crafts Association (HIMKI), Sumartja, said that the data on raw materials was not properly managed and that the government needed to play a role in collecting the data and linking the upstream and downstream sectors.
Revision of SVLK
Furniture industry players in Central Java have urged the Environment and Forestry Ministry (LHK) to revise the wood legality verification certification (SVLK) regulation that is included in the Environment and Forestry Ministerial Regulation No. 30/2016. Apart from costing industry players tens of millions of rupiah to obtain the certificate, the regulation also requires the construction of an integrated factory, said Central Java Indonesia Furniture and Crafts Industry Association (Asmindo) chairman Anggoro Rahmadiputro.
The wood legality certification fee ranges from Rp 30 million to Rp 40 million for the period of two years. “As of today, there is not yet a concrete solution to the complaints by furniture businesses on the SVLK. The SVLK also does not involve all types of businesses in the furniture industry,” he said.
The SVLK rule also requires small businesses to conduct operations in factories and build an integrated warehouse. The factory and integrated warehouse must also be stated in the business permit letter, free of disturbance permit letter, taxpayer identification number, raw material supplier identity and raw material process documents.
This may be difficult given that 80 percent of furniture business players, especially those running small and medium businesses, usually have their production workshop, warehouse and raw materials center located in different places. To build an integrated business center, funds of at least Rp 1 billion toRp2 billion are needed, not to mention the cost of building its supporting infrastructure. The total cost could reach Rp 5 billion.
Anggoro also asked that incentives continue to be given for businesses obtaining the SVLK documents. At the moment, of the 600 small and medium furniture enterprises in Central Java, only around 30 percent have the process of obtaining the SVLK eased through the granting of subsidies.
According to the chairman of HIMKI Jepara Raya regional council, Maskur Zaenuri, prolonged problems related to the obtainment of SVLKs occurred because of a lack of consistency by officials of the Environment and Forestry Ministry in how they handled the regulation. This is despite the fact that the issue has on numerous occasions been brought up by HIMKI and Asmindo.
“Businesses support the government’s policy to regulate the legality of wood as raw material for furniture. Businesses are not asking for the policy to be revoked, but there needs to be a common solution to support the achievement of the economic growth target from the furniture sector,” said Zaenuri.
