The Ministry Of Industry Reveals Three Causes Of The Indonesian Furniture Industry Difficult To Develop

Director General of Agro Industry of the Ministry of Industry Putu Juli Ardika. (Photo: Doc. Ministry of Industry)

JAKARTA - The Ministry of Industry (Kemenperin) revealed that the Indonesian furniture industry is facing current challenges. There are at least three challenges that surround the domestic furniture industry.

"The Indonesian furniture industry is currently facing challenges, especially due to geopolitical conditions which have hampered the logistics of export shipments," said Director General of Agro Industry of the Ministry of Industry Putu Juli Ardika in a written statement, Thursday, February 20.

"Another challenge is the issue of environmental sustainability policies in export destination countries, such as The European Union Deforestation Regulation (EUDR). As well as increasing imports of furniture, especially metal and plastic furniture, to become competitors for the wood-based furniture industry to develop," he added.

In fact, this industry is part of the agro-industrial sector which has played an important role in the national economy.

The reason is, throughout 2024, the furniture industry recorded growth of 2.07 percent. This positive achievement also boosted the growth of the agro-industrial sector which touched 5.20 percent.

Thus, the agro industry was able to contribute up to 51.81 percent to the GDP of the non-oil and gas processing industry.

Meanwhile, the export value of furniture (HS 9401-9403) in the January-November 2024 period was recorded at 1.47 billion US dollars, an increase of 0.7 percent when compared to the same period the previous year.

Therefore, the Ministry of Industry has compiled five strategies in its market control efforts and responded to the current furniture industry trend.

The five strategies, namely facilitating the availability of raw materials, facilitating the availability of skilled human resources, facilitating market improvements and strengthening market reference research, facilitating increased productivity, capacity and product quality as well as facilitating a conducive business climate and increasing investment.

Regarding the first strategy, namely facilitation of the availability of raw materials, the Ministry of Industry will coordinate with relevant ministries and institutions to increase the provision of access. Thus, achieving the supply chain pattern of ideal furniture raw materials through the facilitation of logistics centers for furniture industry raw materials.

Then, in the context of facilitating market improvements and strengthening market reference research, the Ministry of Industry has facilitated the participation of industry players in international furniture exhibitions. In 2024, the Ministry of Industry facilitated six furniture collaborators for the Furniture Industry Design Concept Development Program at the New Delhi Index Plus international furniture exhibition in India.

"A number of Indonesian furniture products were enthusiastically welcomed by Indian consumers," said Putu.

In addition, the government is also aggressively promoting APBN spending through the use of TKDN products, thus providing opportunities for furniture industry players to improve the domestic market.

Next, the Ministry of Industry runs the Kayu Processing Industry Restructuring Program which has been going on for three years since 2022 to facilitate increased productivity, capacity, and product quality.

A total of 33 wood processing industry companies (including wood furniture) have been facilitated, with a total value of IDR 20.6 billion.

The Ministry of Industry also implements a furniture design development program, in the form of a collaboration workshop between furniture designers and industry players. "Then to improve product quality, the implementation of SNI is carried out," he said.

As for creating a conducive business climate for furniture industry players, the government provides tax allowances, tax holidays, super deduction tax facilities, tariff preferences, lartas provisions and ease of export procedures for finished products and imports of raw materials or auxiliary materials.

"In addition to continuing to increase the export market, furniture industry players are also expected not to leave the domestic market. With more efficient production innovations, domestic consumers will also enjoy quality furniture products made by the nation's children," he concluded.