Local Furniture Struggles to Keep Up with Imported Rivals

Before spending thousands on furniture, deciding upon a specific item when there are more choices than ever the task of choosing the one that ticks all the boxes becomes even more daunting. With the burgeoning retail market for furniture and large options, it finally comes down to choosing between locally produced or imported ones. The mindset of buyers that an imported item is better in quality and appearance has sidelined locally manufactured furniture, writes HAIMANOT ASHENAFI, FORTUNE STAFF WRITER.

It has been a long month for the engaged couple Biniyam Asresaw and Metasebiya Nigussie who are waiting for the fasting season to end in January 2018 and to celebrate their wedding.

Just ahead of their wedding, Metasebiya and her fiancé are looking for household items for their newly rented condominium located at Gotera. For Metasebiya to buy a couch fair at price is important, while for Biniyam it is all about the quality and durability.

From the items displayed for sale, Tsige Mulatu, a retailer who has been in the business for more than 15 years, told the couple that none of the products was imported.

Currently, in the market, a majority of the couches are locally produced. According to her, most of the retail stores have their workshops. Likewise, she has a furniture workshop and a retail outlet named after her.

Tsige assesses the current change in taste of her customers who go by the looks rather than durability. She believes replacing home furniture has become common.

“Previously my customers would refurbish their furniture if it was broken or out of use,” she adds. “Now, they are rushing to fill their houses with up to date ones.”

With a significant rise in the number of furniture manufacturers, the market seems to depend on the small and micro level enterprises for the production of couches. Almost every manufacturer is also wholesaler and retailer.

Kidus Dagnachew, an architect and interior designer, TV show producer on one of the local Tv stations Nahoo, explains the high demand for furniture pushed the manufacturers to become retailers with various outlets across the city.

Currently, in the market, a majority of the couches are locally produced.

“When the production capacity has fulfilled the demand, competition follows,” Kidus asserts.

But he believes the products displayed across the city are identical. He attributes this to low creativity where some of the manufacturers just replicate others’ designs. This according to Kidus, makes manufacturers less productive.

A study conducted by Birhan Getaneh for a Masters degree fulfilment at Addis Abeba University, titled Competitiveness Analysis of Ethiopian Furniture Industry indicates a Chinese manufacturer produces 4.5 chairs a day while a Vietnamese produces 1.9. But an Ethiopian manufacturer produces only 0.3 chairs a day even lower than the 0.5 in Tanzania and 0.4 in Zambia.

Biniyam, the groom to be, shares Kidus’ view mentioning his fruitless efforts to purchase a unique and attractive locally produced Tv set or coffee tables across the furniture retail shops located in front of Agona Cinema.

“Almost all are identical, and none of them appealed to me,” he told Fortune.

And that is where international companies come in.

“The foreign companies bring skilled manpower and new technology,” said Kidus who believes the drawback of the locally produced furniture is the finishing.

Hence, the couple was forced to buy imported as well as locally produced household items. They bought a local sofa set but an imported Tv set, coffee table and cupboard.

To mitigate this price escalation, imported items such as screws, locks and drawer handles have to be replaced with locally produced ones.

Tsige, who sold the products to the couple, warned them that once the cupboard’s assembly gets detached or falls apart, it cannot be fixed. Yet, they insisted on taking the imported one reasoning that the locally made closets were unappealing.

For Getachew Demesse, a major shareholder at GM Furniture S.C, not all imported items are of poor quality; rather it is the importers who supply low-quality items to increase their profit margin.

This, as a result, makes locally produced items seem costly, according to Getachew.

“Minimising costs is the easiest way of raising earnings,” said Getachew, whose company has over 350 workers. “Shortage of Medium Density Fiberboard (MDF) and High-Density Fiberboard (HDF) drives the prices of these items.”

To mitigate this price escalation, imported items such as screws, locks and drawer handles have to be replaced with locally produced ones.

Even though many local manufacturers such as GM Furniture are emerging, they still prefer to buy imported Raw materials.

According to a research conducted by the World Bank (WB), most of the items used locally are imported despite the country’s vast wood resources. It also stated that there is a gap in the country’s wood supply chain deeming it unreliable, unsustainable, and poorly organised.

“Looks instead of quality seem to be winning the hearts of both governmental and non-governmental organisations,” according to some importers.

This is also a headache for Getachew who claims that his company is discouraged from participating in procurement processes.

“Most bids to procure office furniture demand imported ones and most of them are international bids,” he said.

Unlike the recent trend, local furniture products were preferred since the establishment of the first wood and wood products factory in 1899 during Emperor Menelik II’s reign. Traditional furniture, especially from the southwestern parts of the country, were trending in the local market especially beds and small chairs called Kursi produced from Cordia Africana and Wanza wood.

The Wanza wood was a quality evaluating criteria in the traditional market. The native African tropical tree wood Wanza or Cordia Africana usually grows between 4m and 15m tall and 60cm in diameter. With the significant decrease in the country’s forest coverage, finding affordable furniture made out of strong wood like Wanza has become rare.

As a result, cheap imports have penetrated the market owing to the stringent legal frameworks on deforestation.

One such manufacturer forced to import products from overseas is Samrawit Tasew, the owner and general manager of Ablante Furniture Plc, which produces 70pc of its furniture locally.

She asserts that poor quality of the local raw materials forced her to import the products from Australia. She also claims that locally produced wood boards are infested with pests.

Samrawit’s business began from Small Scale & Micro Enterprises in 2005, now flourishing into a factory with more than 70 workers. Samrawit would prefer to source everything from the local market, she claims.

Still, the import based furniture manufacturer fails to engage with local wood suppliers owing to the contraband markets wired from areas with relatively better forest coverage.

Presently, most of the local manufacturers import the majority of their raw materials from China, Malaysia, and other countries.

According to a value chain analysis conducted by the World Bank (WB) some years back, Ethiopia was listed 130th with only a 1.5 million dollar export value, in a list topped by China, Germany, and Italy earning billions of dollars from the sector.

A similar study ranks Ethiopia fifth African country in furniture importing preceded by South Africa, Nigeria, Angola, and Senegal.

For Sebele Habtamu, a marketing team leader at Yonatan BT Furniture, the market competition between the local suppliers is amongst themselves.

“As there is no difference in our output, we don’t need to carry the locally manufactured items,” she said adding, “In the market though, the competition is based on the few unique imported items that you display to make you stand out.”

Samrawit of Ablante shares Sebele’s conclusion.

“We possess the skills that fit the demand,” she told Fortune.

Though local companies still claim that they produce furniture that can compete with the imported ones, some buyers, including the couple, opt for the imported than the locally made items.



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