Exports Targeted at US$5 Billion

The furniture industry is one of national foreign exchange-generating sectors that utilizes local raw materials, the absorption of which uses the rupiah currency, while the export results are denominated in US dollars.

KOMPAS/M PASCHALIA JUDITH J

The Coordinating Minister for the Economy Airlangga Hartarto gave his opening remarks at the opening of the International Furniture Expo 2023 at the Jakarta International Expo Kemayoran, Jakarta, Thursday (9/3/2023).

JAKARTA, KOMPAS — Supported by a financing scheme in the industry, market expansion and exhibitions that can bring in 12,000 buyers from 112 countries, Indonesia’s furniture exports are targeted to amount to US$5 billion next year.

Coordinating Economic Minister Airlangga Hartarto said the export value of furniture including handicrafts throughout 2022 had been only $3.5 billion. "It means an export value [of furniture] of $5 billion has yet to be achieved," he said when opening the 2023 International Furniture Expo (Ifex) at the Jakarta International Expo in Kemayoran, Central Jakarta, on Thursday (9/3/2023).

The furniture industry is one of national foreign exchange-generating sectors that utilizes local raw materials, the absorption of which uses the rupiah currency, while the export results are denominated in United States dollars.

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Airlangga asked Industry Minister Agus Gumiwang Kartasasmita, who was also present at the opening ceremony, to facilitate a study on the potential market expansion based on the industry’s road map to boost furniture exports to $5 billion. He also expected the Indonesian Export Financing Agency (LPEI) to be involved in preparing the road map.

Despite the pressing geopolitical situation in Europe, the Indonesian Furniture and Handicraft Industry Association (HIMKI), as disclosed by its president chairman Abdul Sobur, was upbeat about 2024’s prospects, with industry players having targeted new export markets in developing countries, such as India and Middle East region.

Data at Statistics Indonesia (BPS), as released by HIMKI, show the value of furniture exports was $2.49 billion in 2022, which was 1.2 percent lower than the previous year.

KOMPAS/TOTOK WIJAYANTO (TOK)

International furniture exhibition (Ifex) 2023 at the Jakarta International Expo, Kemayoran, Jakarta, Thursday (9/3/2023). The exhibition will last until Sunday (12/3/2023) and will be attended by more than 500 participants from within and outside the country.

Regarding export financing scheme, Abdul said 54 HIMKI members had been supported by LPEI with an interest rate of 6 percent. "Hopefully, as many as 2,500 HIMKI members will benefit from this [financing] facility," he said.

He saw the International Furniture Expo as industry players’ strategy to boost furniture exports. The previous event, which was held in August last year in the midst of the COVID-19 pandemic, drew 8,000 buyers from 80 countries.

This year’s event, which will run from 9 to 12 March, is expected to generate $250 million in on-site transactions and another $750 million in follow-up transactions. Last year’s on-site transactions reportedly amounted to $120 million.

Hopefully, as many as 2,500 HIMKI members will benefit from this [financing] facility.

Featuring more than 500 participants at a 60,000 square meter exhibition area, the expo, according to Dyandra Promosindo, president director Daswar Marpaung, looks to attract 12,000 buyers from 112 countries, including India, the US, Australia and Japan.

By the end of 2022, the national furniture industry still struggled to regain its thriving pre-pandemic performance, as exhibited in 2019. Industry Ministry’s agro-industry director-general Putu Juli Ardika said he was optimistic the exhibition would be able to boost the furniture industry’s performance in the coming years.

This article was translated by Musthofid.