Indonesia Furniture Industry and Wood Craft Products in the global market

Indonesia Furniture Industry and Wood Craft Products in the global market. the furniture industry and wood craft products in the context of developing the national industry

One of the priority industries that produce high value-added products and global competitiveness is the furniture industry and wood craft products in the context of developing the national industry.

Foreign Minister Retno Marsudi said, with the receipt of the Forest Law Enforcement Governance and Trade Voluntary Partnership Agreement (FLEGT-VPA) license, Indonesia must utilize the comparative advantage for Indonesian wood products to reach a larger market in the European Union (EU).

Readmore: Jepara Wood Carving, Motif and Art in the World

The FLEGT-VPA agreement helps EU partner countries in combating illegal logging through improved forest governance and regulation. FLEGT-VPA is an agreement made by the EU with its partner countries to guarantee that timber exported from partner countries comes from legal sources, and is produced sustainably and in accordance with the principles of environmental protection.

According to Retno, the inauguration of the FLEGT license was an important momentum for relations between Indonesia and the EU. This also reflects Indonesia's strong commitment to sustainable timber products. With the FLEGT license, wood products from Indonesia exported to the EU can enter the European market through the green channel.

Retno added, now Indonesian wood products are increasingly superior in the EU market. According to him, as a country that received a FLEGT license, Indonesian wood products have a comparative advantage in the EU market. Competitiveness and broader market access possessed by Indonesian wood products must be utilized immediately before being overtaken by wood products from other countries.

Meanwhile, President Joko Widodo stressed, the quality of domestic craft products is already good and can compete in the global market. However, the marketing aspect must be improved if it wants to boost export value. As is known, exports of Indonesian wood products and their derivatives to EU countries have increased since the launch of the FLEGT license on 15 November 2016.

The Director General of Sustainable Production Forest Management at the Ministry of Environment and Forestry, Ida Bagus Putera Parthama, said that Indonesia had issued 14,548 licenses with a total weight reaching 364,735,450 kilograms. "The value reaches US $ 400,156,088 until March 31, 2017. If the value is converted to Rp5.325 trillion," he said.

Parthama said, Indonesia became the first country in the world to have the right to issue FLEGT licenses to export wood products to the EU market and no longer go through a due diligence inspection stage.

The amount of exports in accordance with the licensing of the Timber Legality Verification System (SVLK) ranges from two thousand to six thousand cubic meters. In accordance with data from the European Timber Trade Federation, as many as 23 million hectares of forests received SVLK certification, 2,700 timber factories received SVLK certificates, and 1,800 timber exporters received SVLK certificates in Indonesia.

The World Wide Fund for Nature (WWF) through WWF Indonesia appreciates Indonesia's achievements in obtaining a Forest Products Trade Policy (FLEGT) license. According to Acting CEO of WWF Indonesia, Benja Mambai, this affirms Indonesia's commitment in preserving Indonesia's forests through improved forest governance, as well as a country that only sells wood products that are guaranteed of legality.

Indonesia became the first country in the world to successfully obtain a FLEGT license which is part of an effort to combat illegal logging and illegal timber trade. The EU and Indonesia have agreed that from 15 November 2016, Indonesia has been able to issue FLEGT licenses for wood products exported to the EU. With the FLEGT license, Indonesian forestry products no longer need due diligence to enter the European market.

Readmore: Banyuwangi's Handicraft Art is Made Worldwide

This agreement fundamentally places the SVLK as one of the important instruments to ensure that Indonesian wood which is marketed in Europe is wood that is free from lawlessness and comes from forests that are managed legally and responsibly.

The Importance of Product Innovation

Like fashion, processed wood products also continue to experience growth and follow trends. Therefore, businesses must know the types of wood crafts that are in demand by customers. To increase handicraft exports, there are still many things that businesses must evaluate. The number of handicraft exports can increase if domestic products are able to compete with other countries. At present, Indonesia's main competitors are Vietnam and Malaysia. Therefore, to increase exports, Indonesia must have competitiveness in the international market.

The Chair of the Indonesian Furniture and Handicraft Industry Association, Mugiyanto, said that there were two big challenges facing the Indonesian furniture industry. First, product design innovations that are marketed to international consumers. Innovation and creation are the keys so that the products produced develop according to market tastes. The second challenge is the case of illegal timber trade affecting the future of the furniture industry in Indonesia, because it is directly related to the supply of raw materials.

Meanwhile, Chairman of the Indonesian Furniture and Crafts Industry Association, Soenoto, revealed, there are still a number of obstacles that are often encountered by business actors in developing business. "We hope the government can strengthen support starting from conducive policies, design development, and promotion abroad," said Soenoto.

Readmore: CNC: Wood Carving Machines to Increase Productivity

The government feels it is necessary to develop the furniture and craft industry which plays an important role because it bases the business on three main things. "First, the industry is made from 100 percent raw material from Indonesia; second, absorbing a large workforce; third, export-oriented and foreign exchange earning. These are three important things in this industry, "stressed Soenoto.

One of the government's support in developing the furniture and craft industry is the strengthening of SVLK owned by the Ministry of Environment and Forestry. This system tightens trade by only selling verified legal timber for export abroad.

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Indonesia Furniture For International: Indonesia Furniture Industry and Wood Craft Products in the global market
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Indonesia Furniture Industry and Wood Craft Products in the global market. the furniture industry and wood craft products in the context of developing the national industry
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