Kenneth Cobonpue

Kenneth Cobonpue

2006 2007 2008 2009 2010 2011

Jan-November

2012

Jan – November 2013

Furniture

274.12 240.32

219.73

137.19

150.75

161.36

145.89

203.68

Furnishings

21.33

20.29

20.43

11.61

18.82

23.22 25.53 27.84

Total Export 295 261 239 148 168 184

171

231.51

Furniture and Furnishings's Annual Export PerformanceFurniture and Furnishings's Annual Export Performance2006 -20132006 -2013

Lifted from the presentation of DED Emma Mijares during Road mapping workshop of Furniture industry updated by BETP

PUBLIC CONSULTATIONPEDP 2014-2016

1 12%

A. NoBecause the traditional markets were expected to rebound end 2013

B.

i. Domestic Economic Environment Fell Short

Exchange rateInflation rate - changes on the prices of chemicals, packaging, etcLabor CostPower CostUncompetitive pricing

ii. Govt Policies and Regulations

EO 23, DAO 99-46, Pending Sustainable Forest Management Bill

iii. External environmentSlow down in the economic activities of target marketsInternational standards on Sustainable sourcing of wood.

Lack of an intensified global marketing strategy/ approach for the industry

Lack of sustainable supply of raw materials – wood (EO 23) and other non-timber products

Influx of foreign furniture products due to the low tariff imposed to China, Malaysia and Indonesia products. Local condominiums, residential, hotels and resorts tend to import furniture rather than purchase locally.

Lack of management education/manufacturing program – for middle managers and skilled workers – institutionalize in selected schools in the Philippines

High cost of inter-island shipping due to the “Cabotage” principle

iv Industry situationRare introduction of new technologies as companies are not willing to invest on machines anymore

New designs introduced but there is always an issue on pricing

v. Industry initiatives to promote exports

No budget for international trade fair promotions - companies joining individually

vi. Government export promotions

No budget allocated for export promotion for the BSO initiated projects

There are inbound and outbound missions but not significant enough to push the companies forward

2Target is very low.

Domestic Economic Environment

Address the abrupt strengthening of the domestic currencyRetail Open Access for Power Consumption

Attract more investors in the Furniture industry to decrease pressure in the prices of inputs

Government policies and regulations

Sustainable Forest Management LawEU Timber Regulation complianceEstablishment of industry plantation programs

PLEASE REFER TO ITEM C

5-10%Yes with the implementation of the programs above

Yes with the support of the government in the implementation of the Roadmap

Yes with the establishment of a Business plan to complement the Roadmap

Element Description

Products Diverse range of furniture and furnishings which vary according to material, function and utility

MarketsMedium to high-end segment of the traditional markets (i.e., North America, Europe, Middle East and Japan); Asia (specifically, Kuala Lumpur, Jakarta, Shanghai, Ho Chi Minh, Bangkok and Singapore); and BRICs.

Growth ProjectionTarget growth rate of 1% in 2013; 2% in 2014; 5% in 2015; 7% in 2016; and 10% in 2017 Assumption: US market continues to grow positively in the next 5 years

Timeline 2013 - 2017

Key Strategies Market Development - Niche Marketing

Indicators

Jobs Generated - maintain for 2013 – 2014 Local Sales - Php50M in 2013; 10% increase every year until 2017 Export Sales - 1% increase in 2013 from the 2012 BETP export figures of US$159.59M Investments - green technologies

PRODUCT DEVELOPMENT PROGRAMS

1. Material Manipulation and Innovation

2. Design Development Seminars

3. Hiring of International Trends consultants

4. Region-Based material innovation and Furniture component production

5. Product Development programs

6. Green Furniture program

Marketing ProgramsTie up with leading brands in target (glocal) marketsEstablishment of local showrooms in the ASEAN regionBuyer-Designer-Exporter Merchandise Development ProgramSelling missions (inbound and outbound)Participation in International shows abroadPhilippine Furniture Shows for promotion, sales and brandingTap design consultancy programs Branding of Philippine furniture productsAlternative Markets Program (BRICS)

Strategic Options Action Step Timetable

. Technology and Packaging development program

. Continuing R&D programs

1)Raw Material Development Reverse Trade Fair (suppliers of parts,

components) Materials suppliers' Database program2) Product and Design Development R & D Clinic Design Development Program Student Internship Program (SIP) Obra Design Green Design Competition KAGIKAN

Strategic Options Action Step Timetable

. Tap CBI, DTI and Philexport for market information

. Conduct continuous market intelligence

. Do country profiling of target markets

. Invite professional designers who are knowledgeable in other markets

Market IntelligenceSubscription of CSILInfo Sessions on BRICs Market OpportunitiesBuyers’ ForumMarket Analysis

20132014

Starting 2014

Strategic Options Action Step Timetable

Creation of marketing team for local markets

. Strategic regional showrooms for domestic market

. Linkage with allied industries (e.g., PhilConShows)

. Organize Design Congress

Domestic marketingRegional Roadshows (Davao, Palawan, Panay Is.)Strengthening of regional / local Chamber trade shows•"TUBOD" The Philippines' Ultimate Domestic Furniture Trade Show•Furniture & Furnishings Equipment Show•Pampanga Furniture & Furnishing Show

October (Davao)

June

September

December

Strategic Options and Action PlanINPUT PROVISION

Strategic Options Action Step Timetable

. Massive information campaign in all levels on EO 23

. Consistent implementation of EO 23

. Strengthen linkage with Philexport for advocacy issues

Organize info sessions to BSOs re updatesDetermine what plantation species are not part of the log banWork out for the DENR Certification that the wood is sourced from a plantation

Link / Bridge plantation owners to manufacturers

To get data from DENR on the list of plantations and with reactivated cutting permits

2013

Review relevant policy particularly on the value added process (e.g., DENR - Section 46.4 of DAO 04 Series of 1989 exportation of raw rattan poles; abaca fiber)

Submit letter to DENR to review Section 46.4 of DAO 04 Series of 1989 2013

Strategic Options and Action PlanStrategic Options Action Step Timetable

Lobby for the abolishment of DAO 9946 with DFA (Authentication of Supplier’s Contract on Importation)

Aggressive follow-up with the Office of the DENR Secretary ongoing

ENABLING ENVIRONMENT:Lobby for the reclassification of plantation trees from forest to agriculture product and compliance to Timber Legality Assurance System (EU FLEGT)

Benchmark with Malaysia (Ministry of Timber) experience / best practicePrepare project studyPosition Paper to lobby for the reclassification

EU FLEGT: done by 2013

Reclassification: done by 2015

Establish bulk buying facilities (Cebu, Pampanga, Metro Manila)

Prepare business plan to secure PhP10M funding from SBCorp. for bulk buying

2014

Locate / establish SSFs in the identified plantations (e.g., North Cotabato, Butuan)

Submit proposal to PD Bravo re establishment of SSF 2013

Strategic Options and Action Plan

Strategic Options Action Step Timetable

Promote the use of manipulated industrial materials and mixed-media

Use alternative raw materials for product development . Aluminum and metal. Synthetic / Plastic. Environment friendly or green materials (e.g., bamboo, coconut)

2013-2017

Increase the critical mass and upgrade the level of technology and skills

Commission a consultant to conduct a study on the best practices of Myanmar, Vietnam and Indonesia in inviting foreign companies to their countriesDevelop incentives specific to the furniture industryInvite foreign companies to locate in the Philippines

2014

Strategic Options and Action PlanMANUFACTURING

Strategic Options Action Step Timetable

Declaration of existing furniture companies with at least 1 hectare facility as ecozone

Follow-up with PEZA for the approval of one hectare company / two or more companies as an ecozone

Greening the workplace Implement ‘RECP’ (resource efficient clean production)

Skills upgrading

. Skills transfer from OFWs to PH workers. Organize skills upgrading programs (e.g., upholstery, packaging training, quality control, product re-engineering, carving). Train new generation of workers and expand the HINABI (e.g., weavers)

Develop short intensive management courses for the furniture executives & middle managers

Commission an academic institutions to develop the module 2014-2017

Strategic Options and Action Plan

Strategic Options Action Step

Encourage companies to invest in capital equipment to technology and productivity

Tap the DOST SET-UP Program

Green manufacturing Tap wastes of other products as inputs to manufacturing

PRIVATE SECTOR:PRIVATE SECTOR:

LEAD THE INDUSTRYLEAD THE INDUSTRY

GOVERNMENT SECTOR:GOVERNMENT SECTOR:

RESOURCE GENERATOR/PROVIDERRESOURCE GENERATOR/PROVIDER

Public-Private Partnership

THANK YOU..