The furniture industry in Bangladesh needs strong policy support from the government, especially the provision of bonded warehouses, to enable duty-free import of raw materials. This would help the sector be more competitive globally, experts and manufacturers say.

They also highlighted the need for stronger international branding to elevate the status of the sector, similar to the success of the ready-made garment (RMG) industry. Government support could play a key role in this regard by helping manufacturers participate in international trade fairs and fostering ties with global stakeholders, thereby strengthening the industry’s global presence.

Speaking to The Business Standard, Dr Mohammad Abdur Razzak, Chairman of Research and Policy Integration for Development (RAPID), said Bangladeshi furniture exporters need to integrate into the global value chain to unlock their manufacturing potential. export.

Manufacturers also need to understand consumer preferences and market demands to remain price competitive, he added. Highlighting the challenges, he explained that opening overseas outlets for furniture exports involves significant costs, making it a less viable option.

These costs include hiring staff, marketing, and providing after-sales services, as many furniture companies offer a 21-day return policy.

Razzak suggested that the best strategy for Bangladeshi furniture makers is to connect to the global supply chain, similar to the garment industry. For example, partnering with a global brand like IKEA, which designs and sells ready-to-assemble furniture, could build consumer confidence and gain a foothold in the international market.

He further noted that except the garment industry, no other export sector in Bangladesh has successfully integrated into the global supply chain. To address this problem, he proposed that attracting foreign direct investment (FDI) into the furniture sector could be an effective way to achieve such integration.

Regarding bonded warehouse facilities, Razzak explained that under the current tariff policy, any industry can use bonded facilities up to 70% of the value of its exports. This provision could provide a significant boost to furniture exporters looking to expand their global presence.

Speaking to TBS, Kawser Chowdhury, director of the Bangladesh Furniture Exporters Association (BFEA), highlighted the challenges faced by entrepreneurs in the sector. He pointed out that they currently pay up to 70% duties on raw materials, which significantly hampers their competitiveness.

Allowing the import of raw materials under customs warehousing would provide much-needed relief and help the industry thrive internationally.

To build brand awareness in the global market, Chowdhury suggested that the government should support exporters by making it easier for them to participate in international trade fairs. Citing Vietnam as an example, he explained that after the United States imposed tariffs on furniture made in China in 2018, Vietnam seized the opportunity to become the top exporter of furniture to the United States. United States, with exports reaching $7.4 billion per year.

Bangladesh, he believes, has a similar opportunity to capture a share of this market. However, this requires strategic branding to position the country as a furniture exporting country and greater engagement with relevant stakeholders and associations.

Salim H Rahman, president of the Bangladesh Furniture Industries Owners Association, echoed these sentiments. He said: “We are now looking to secure a greater share of the global market, but the prices of our products are uncompetitive. »

He highlighted that the provision of bonded warehouses would enable the sector to significantly increase its export earnings over the next five years, driven by strong international demand.

Data from the Export Promotion Bureau (EPB) paints a mixed picture of the sector’s performance. In FY24, Bangladesh exported $45.7 million worth of furniture, a significant decline from over $110 million in FY22. However, with policies and a With appropriate support, the sector has the potential to regain, or even surpass, its previous achievements.

The global furniture export market is estimated to reach $770.4 billion by 2024.