The wooden furniture industry in Bangladesh has been struggling to flourish due to the inability of market players to export their products at competitive prices. The main hindrances are the high tariffs on imported raw materials and the subsequent dearth of quality components, according to industry experts who participated in a discussion on the future of the furniture industry in Bangladesh. The event, titled “Future of the Furniture Industry in Bangladesh,” was jointly organized by Hatil and The Daily Star at The Daily Star Centre in Dhaka.
Bangladesh, with its abundant labor force, capital flow, and technological facilities, holds great potential for the wooden furniture business. However, the increasing popularity of wooden furniture faces challenges as most raw materials, including quality wood and chemicals, have to be imported, as stated by Salim H Rahman, the chairman of the Bangladesh Furniture Industry Owners Association (BFIOA). Rahman further highlighted that the country’s production cost remains high due to the reliance on imported raw materials, resulting in a competitive disadvantage.
To overcome these challenges, Rahman suggested granting the furniture sector partial bonded warehouse facilities, which could lead to increased furniture exports. Currently, local entrepreneurs meet approximately 95 percent of the demand for wooden furniture. The industry comprises more than 40,000 small and large companies engaged in furniture production and marketing, making it a significant contributor to the country’s economy. Surprisingly, despite the presence of over 100 brands such as Hatil, Akhtar Furnishers, Partex, and Regal Furniture, the majority of the Tk 30,000 crore market (approximately USD 3.5 billion) is controlled by a non-branded cottage, micro, and small enterprises.
The furniture sector in Bangladesh is the second-largest job provider after the garments and textiles industry, employing approximately 2 million people. Rahman, who is also the chairman of Hatil, emphasized that the lack of foreign investment remains a challenge for the industry’s growth. However, if these obstacles can be addressed sustainably, the furniture industry could become a key source of foreign income for Bangladesh.
A Karim Mazumder, the managing director of Nadia Furniture Limited, countered the misconception that granting partial bonded warehouse facilities to furniture makers would lead to irregularities. He emphasized the importance of dispelling such concerns to promote growth and innovation in the industry.
Despite the challenges, the furniture industry in Bangladesh has experienced a significant surge in exports, which have more than doubled in the past six years. In the fiscal year 2021-2022, Bangladesh exported furniture to around 61 countries, indicating the potential for further growth in international markets.
Rayana Hossain, the managing director of ISHO, raised concerns regarding import duties on furniture. Currently, individuals importing furniture have to pay the same amount of duty for importing parts or pieces as they would for a complete set. This situation is seen as unfair and discourages the import of furniture.
Mohammad Abdur Razzaque, the chairman of the Research and Policy Integration for Development, stressed the importance of connecting the local furniture market with the global value chain to succeed in exports. He also highlighted the need for government support to address the challenges faced by the industry.
According to a report by Spherical Insights, the global furniture market was valued at $548.38 billion in 2021 and is projected to reach $780.8 billion by 2030, with a compound annual growth rate of 5.1 percent during the forecast period. In contrast, Bangladesh’s current contribution to the global furniture market stands at only 0.03 percent, based on data from the BFIOA.
The discussion panel also included Amer Karim, the chief executive officer of Legato Design and Fabrication, Shah Alam Monshi, the chief operating officer of Partex Star Group, Nazim Hassan Sattar, the general manager of SME Foundation, and Abdus Samad Al Azad, the joint secretary of the commerce ministry. Their insights shed light on various aspects of the furniture industry and the potential for growth and development in Bangladesh.