Saturday, June 6, 2009

SWOT Analysis of Pakistani Furniture Industry

SWOT Analysis


 Skilled Labor Force
 Wood seasoning facility centre is available
 Suppliers of raw material are available
 Local tools available
 350 furniture manufacturing units
 8,000 people (approx.) are directly and indirectly attached with this occupation
 Strong historical background of craftsmen


 High cost of production due to high rate of raw material
 Lack of educated, certified and professionally trained, work force
 Unavailability of ready to use raw material
 No Designing and R&D facilities available
 Unawareness of Social compliance and Environmental issues
 Unawareness of any quality control and standards
 Lack of international marketing skills
 Unavailability of ready-to use seasoned wood
 Constraint of Technology
 Fluctuating prices of the raw material.


 Technical up gradation
 International exhibitions
 International warehouses
 Networking & linkages of cluster players/stakeholders
 Development of consortiums with specified objectives


 Migration of trained work forces from the sector
 Raw material cost increase (shortage in the stock of Sheesham wood at any stage
because no further plantation as required)
 Import of low price articles from China and India
 Instable political set up of the country.

Investment Opportunities

 Chip/Hard Board Manufacturing
 Win Board Manufacturing
 Particle/Veneer Board
 Flush Doors/Windows
 Small wood seasoning plant
 Furniture Design Center

Friday, June 5, 2009

Kinds of woods in Gujrat Cluster

Kinds of Woods;

Following different types are available to cluster

 Sheesham
 Deyodar
 Popular
 Pertal
 Chilgoza

The woods that are fashioned into furniture fall into following three categories:

1. Hardwoods
2. Softwoods
3. Composites

Even the term 'hardwood' or 'softwood' is deceptive. Hardwoods aren't necessarily harder, denser material. For example, balsa wood is one of the lightest, least dense woods there is, and it's considered a hardwood. Technically, lumber is classified based on how the tree reproduces. As a general rule, though, softwood trees are evergreen year round while the hardwoods create the gorgeous autumn foliage that we all love so much.

Hardwoods are considered the highest quality and are the most expensive. Their natural colors vary from the darkest woods to the lightest ones and they can be stained or painted for even more variety. Hardwood furniture is least likely to warp or bend and is prized in all high quality homes. The five woods most commonly used in furniture production are cherry, walnut, oak, maple and mahogany.

Softwoods are less expensive than hardwoods, but they require extra care. Because they are less durable, it's much easier to scratch or dent softwood furniture. In addition, they often don't have the beautiful grains of a hardwood, and therefore don't stain as beautifully.
Pine is an example of softwood that is commonly used for furniture. These woods are often used in construction as well so the choicest pieces are reserved for furniture. In construction, knots and splits are common. Lots of construction lumber will not accept paint and this kind of wood is used for shelves or packing crates.
The softwood used in furniture is designated as "Appearance" lumber and includes most softwood lumber that has been custom milled to a pattern or otherwise surfaced on all four sides.

Composites are the cheapest form of wood and are literally manufactured, rather than grown.

Plywood: multiple layers of thin wooden sheets are glued together and pressed. Plywood is strong and resists swelling, shrinking and warping. There is some furniture made directly from plywood, but generally it is only used as a support when incorporated into furniture.

Particle board:
sawdust and small wood chips are mixed with glue or resin which is then shaped and pressure treated. When used for inexpensive furniture, particle board is usually covered with laminate or veneer. This is necessary because particle board splits easily and the laminate prevents splitting. However, the downside is that the laminate may separate from the wood because the particle board responds to temperature and pressure changes by swelling and shrinking.

Hardboard: is made like particle board but it's placed under higher pressure so it's stronger.

MDF or Medium Density Fiberboard: wood particles are bonded with resin and compressed. It is harder than particle board or hardboard, and can be cut like plywood although it isn't as strong as plywood. Some MDF is covered with melamine which is a durable plastic in a variety of colors. The exposed edges of MDF are rough and needcovering with molding or some other decorative material.
Technically, furniture made from all of these wood products is "real" wood furniture, even the composites. Prices and quality range from the hardwoods down to the composites. The higher you go up the spectrum, the more you can expect to pay for your wood furniture. The good part, of course, is that with proper care hardwood furniture will last for decades or even generations. If you can afford it, always choose hardwood furniture.

Major Furniture Cluster City of Pakistan-Gujrat-2

Other Cluster Actors
Following are the supportive actors of the cluster.

Hard Board/Plywood/Chip Board
As mentioned before, these items are also used in the manufacturing of the furniture. The supply sources of these items to Gujrat cluster are the different plywood factories in district Gujrat and Jhelum. These factories include KDC Plywood Factory Jhelum, National Plywood Factory Jhelum, Chenab Particle Board Alipur Chatha, Plyfo Industries Alipur Chatta, Islamabad board Hattar. These items are sold on the hardware shops in Gujrat.

Foam & Cloth
Foam and Cloth are used in sofa sets, chairs and the bed sets. These are 15% of the total quantity of raw material used in the furniture manufacturing.


These items are about 5% of the total raw material used in the furniture manufacturing. These are also sold at the hardware stores in the city. There are different varieties of the accessories available in the market. These include local as well as foreign made accessories.

Paint/Polish/Other Related Material
These include about 15% of the total raw material used in the furniture manufacturing. These materials are available at the hardware stores as well as the agents of the different companies sell these materials directly to the furniture manufacturers.

Sales Distribution Channels
There are different sales distribution channels of furniture industry of Gujrat. The medium sized and the small sized units have their showrooms on the G.T road, Sargodha Road, Railway Road and Gujrat Bypass. The micro sized manufacturers don’t have their own showrooms, so they are dependent on the other two categories for their furniture sales. Around 10% of the total furniture manufactured is sold in Gujrat. The rest 90% of the furniture is sold in the other cities like Lahore, Sialkot, Gujranwala, Rawalpindi, Islamabad, Peshawar, Karachi, Quetta etc. Medium sized units have made their sales points (showrooms) in Lahore & Rawalpindi and certain other cities. Most of the furniture that is sent to the other cities is sold to the traders who have their own showrooms. A small quantity of furniture is also exported to different countries but this export is dependent on the personal contacts of the manufacturers.

Current Cluster Scenario
Furniture industry is developing gradually at its own and the idea of setting up showrooms on G.T Road, and Gujrat By-pass is increasing. The estimated overall furniture sale from Gujrat is about Rs. 250 million per annum. This figure is gradually increasing with the increasing demand and quality consciousness of the consumers.

There are around 350 units overall and over 8,000 persons are directly or indirectly involved in this sector. At the moment, a few of the local furniture manufacturers are exporting furniture items to the individual clients in UK, US, Saudi Arabia and Middle East. The total export of Furniture from Gujrat is about US$ 4.5 million. (Directorate of industries), however due to limited production capacity these firms are not able to fulfill the large export orders and hence can not compete vigorously in international markets. China and India are the major competitors. Their prices are less and quality is better.

Sheesham wood which is basic raw material is short in supply to fulfill the local market requirement. This shortage has caused a price hike. There is no schedule rate of wood in the market.

Major Furniture Cluster City of Pakistan-Gujrat-1

Real wood furniture is the most popular furniture in existence. It's been around for hundreds of years and probably existed when the cave people got tired of squatting on the dirt floor of their caves and looked around for a better way. Furniture industry is developing gradually at its own and the idea of setting up showrooms on G.T Road, and Gujrat By pass is increasing. The estimated overall furniture sale from Gujrat is about Rs. 500 million per annum. Furniture cluster of Gujrat is famous for the production of quality wooden furniture. Gujrat was known for its furniture manufacturing even before the independence because of the availability of cheap skilled labor. Presently most of the manufacturers are depending on traditional method (labor intensive technology) that results in the low productivity. Following are the categorization of the Units with respect to capacity of the major cluster Gujrat.

Micro Sized Units
According to the statistics provided by the industry, there are about 300-325 micro sized units involved in the business of furniture manufacturing. The number 300 include all the units that are either directly or indirectly involved in the furniture manufacturing. These units are vertically integrated and are involved in the different stages of furniture manufacturing. Some of these units also have organized themselves in specialized products manufacturing, i.e. one unit is producing only one kind of products not all the products (e.g. a unit producing chairs will only produce chairs). The furniture manufacturing units are selling their products in semi finished and finished form in Gujrat as well in the other cities.

The small-scaled units can be further divided into:

 Saw Mills
 Furniture Manufacturers
 Upholstery Units
 Polishing & Finishing Units

Small Sized Units
Gujrat furniture cluster consists of about 35-40 small sized units. These units manufacture the furniture themselves as well as depend on the micro sized units for their manufacturing requirements. In the second case these units buy the semi finished furniture from micro sized units and then finish these products. These Units have their own show rooms to display their finished products. Most of their sales are domestic (inside country) but a few of them are also involved in the exports. These units have workers ranging from 15 to 50 in number depending upon the amount of work. These units sometimes also hire workers on contract basis in case of more orders.

Medium Sized Units
Gujrat cluster consists of 4 to 5 medium-sized units. These units can be called as the market leaders because of their level of achievement. Most of these units are operating at least for the last 30 to 40 years and have developed a lot during this time period. These units can be called self-sufficient because they have solved most of their problems and issues related to production. These units have workers ranging from 50 to 100 in number depending on the work load.

Employment Generation
According to the estimates provided by the industry there are about 7,000 to 8,000 persons in Gujrat that are directly involved in the furniture manufacturing. These persons can be divided into the categories of carpenters, polishers, upholstery workers and the general laborers. As far as the training of this work force is concerned, there is no specialized training institute for furniture workers in Gujrat except for the wood working service center but this center is producing only 10 certified furniture workers per year. These workers can work as supervisors but the quantity is negligible as compare to the demand of supervisors and skilled workers in the cluster.

Total Production
The estimated annual wood consumption is around 350,000-400,000 cubic ft. The average cost of this wood is around Rs. 160 million calculating on the basis of 400 rupees per cubic foot on an average. Besides this around 100 million of manmade material is also used. Hardly, any source available to gather the anticipated growth rate. Estimated growth figure is around 10%.

Capacity Utilization
Capacity utilization of the existing unit is not sufficient even to meet the demand of the domestic market. It is below 50%. None of the unit has the capability to produce goods at mass level. Even the medium sized units take minimum 3-4 months for an order. Sufficient gap exists and it is increasing day by day with the increase in the population of the country.

Wednesday, May 27, 2009

Furniture Clusters in Pakistan-2


There are about 300 units (including shops) in Gujarat associated with this sector. The sector breakdown shows that majority of the sector is based on 225 to 250 micro units, 40 to 50 small units and 5 medium sized units. There are approximately 7,000 to 8,000 people directly employed in this industry. Gujarat is well known for its top quality furniture all over Pakistan. A few units are exporting furniture to different countries including, UK, USA, Saudi Arabia, Middle East etc. The total export of Furniture from Gujarat was about US$ 4.5 million. (Directorate of Industries). However, due to limited production capacity these firms are not able to fulfill the large export orders and hence can not compete vigorously in international markets. China and India are the major competitors. Their prices are less and quality is better.


Furniture items produced in Sindh comprise of chairs, tables, musical instruments and other items like doors and windows. During the last decade, the units have started diversifying their products into office and kid’s furniture, which is designed more trendy designs. At present there are two main clusters of small furniture manufacturers in Karachi, i.e. Manzoor Colony and Akhtar Colony. There are some 1,200 to 1,300 units in these clusters that have employed almost 6,000 to 7,500 people.
The machinery used includes four basic tools/ machines for furniture making. The average wood requirement of each of these units is around 150 to 200 cubic feet per month. Wood is purchased by unit owners and seasoned naturally. This market mostly caters to the needs of the domestic market and because of the poor finishing/polishing quality the furniture manufactured here is not exported.
Two smaller clusters in Patelpara and Liaquatabad are also engaged in the manufacturing of low quality (MDF and Keekar wood) furniture. Almost three hundreds small/micro units are operating in these areas. Ayshamanzil, Arambagh, Nursery, Liaquatabad and Manzoor Colony are some of the major furniture retail markets in Karachi selling hardwood, steel, MDF furniture. The prices of raw material fluctuate tremendously and quality raw material is scarce. Seasoned quality rosewood trades at around Rs 650 to Rs 850 per cubic ft. American Oakwood and Burma teakwood can be purchased at a price of Rs 2,400 and Rs 3,200 respectively in this market.
Lacquer work is another powerful traditional craft of Sindh. These items have grown popular over the time period. However, furniture items are simple in design. Articles such as table lamps, chairs and sofa sets produced by Lacquer industries of Hala in Hyderabad district and Kashmir in the Jacobabad district are very popular.
Moreover, these areas are also in close proximity from retail markets. Majority of the wooden furniture manufacturing units are classified as small and medium sized having small and specified production. Most of the manufacturers do not have the complete manufacturing facilities to manufacture the complete range of products. The orders are sub contracted to independent workshops for manufacturing. This reduces the capital cost of the manufacturer but increases the quality control cost.

Furniture Clusters in Pakistan-1

There are some furniture clusters working in different countries in Pakistan.


The Lahore cluster is basically based on the traders of wooden furniture. There are more than 1,500 retail shops trading in MDF furniture, office, bedroom and living room furniture. However, in the last decade this market has diversified its product range to all kinds of furniture articles. These traders usually purchase furniture in semi-finished form from Chiniot and polish and upholster it in their workshops. However, there are around 100-200 small cottage sized workshops in Lahore are engaged in wooden furniture manufacturing. There profit margins are quite high as all the value addition is done in Lahore according to the requirement of the customers.
Majority of these manufacturing units use low-tech machinery which are either locally made or are second hand imported machines. However, some furniture manufacturers have established a production line based on new modern machinery and seasoning kiln facilities. On average each manufacturing facilities employs 5 to 20 workers depending on its scope of work.
At present there are around five large clusters of furniture markets within Lahore i.e. Fortress Stadium, Gulberg, AIlama Iqbal Town, Ferozepur Road and Multan Road. These markets mostly cater to the needs of the domestic market. Because of the poor finishing quality and inferior packaging the exports are not existent or negligible.


Although Chiniot wooden furniture industry is approximately 150 to 200 years old, but still remained at cottage sized scale. There are almost 3,000 to 4,000 manufacturing units in Chiniot, which use primitive technology and techniques for manufacturing. Around 40,000 people are directly employed by this industry. The demand for this kind of furniture is increasing in the international market.
Chiniot is a major cluster engaged in the manufacturing of handmade wooden carved furniture. The basic raw material used for hand carved furniture is Sheesham wood, which is under an attack of an unknown kind of disease. This has resulted in a shortage of raw material and increase in its price.
The stakeholders can be categorized into manufacturers, craftsmen, traders, timber merchants, exporters, transporters and financial institutions. The number of skilled craftsmen is declining, which is creating severe shortage in the industry. The semi-finished items (Kora) are sold to all major cities throughout Pakistan. Direct export from this industry or cluster is negligible.

Tuesday, May 26, 2009

Some Recommendations for the Furniture Producers

Enforcement of the rule of law and good governance on timber cutting and trade. Eradicate illegal and rent-seeking behaviors of Forestry Department officials, if such misconduct is proven.

Sustainable raw materials. A plan is needed to create and develop a sustainable source of wood raw materials. Forestry/reforestation programs should ensure a stable source of low cost raw materials, and to the extent possible maintain or improve ecological conditions, enhance the community income and employment, etc.

Product quality. The quality of furniture is determined by professionalism in the handling of raw materials, production techniques and manufacturing process. Due to insufficient skills and facilities, as well as the lack of quality standards and agencies conducting inspections, quality is bound to suffer. Quality enhancement and Standardization is thus needed, and all furniture manufacturers should preferably adhere to the quality management system (ISO).

Design. Creation of easily accessible design libraries in each major furniture cluster of the country would disseminate effectively new designs. The items collected could include trend reports, contemporary design books, consumer magazines, mail-order catalogues, trade publications, raw material samples, etc. Training programs and exchange of foreign designers can be an integral part of this design upgrading.

Human resources. Even if labor force is abundant, lack of technical capabilities can hinder competitiveness. Public support to vocational training for workers in factories is recommendable, in order to reduce direct training expenses of enterprises, and for managers to allow them to professionally grow with their businesses.

Market information. Access to information on market characteristics (for example trends in distribution, retail success stories, and new furniture marketing concepts) and market access (tariff and non-tariff barriers) is often very difficult. It would thus be useful to centralize this information (into Furniture Exporters’ Association level) for regular distribution.

Marketing activities. The furniture industry should focus on marketing activities in key markets (the United States, Japan, the European Union, and the Gulf). A concerted action should include exhibitions; websites; international trade fairs; in-depth market analyses, etc. Special encouragement may be warranted for importers and retailers’ buyer’s groups to visit Pakistani factories or Permanent Exhibition Halls. Marketing efforts in the booming Gulf markets should be intensified.