The Jakarta Post, Jakarta | Business | Mon, February 18 2013, 11:15 AM

Paper Edition | Page: 13
Furniture enterprises are preparing a special lot to set up a shared workshop-cum-store in Sukabumi, West Java, aimed at integrating businesses and improving efficiency in the industry.

The Rattan and Furniture Association (AMKRI) chairman, Soenoto, said that the first-ever furniture industry center would be established on a 1,000-hectare lot in Sukabumi. He further added that construction had kicked off last year and was expected to be completed by 2015.
“We will construct the area gradually. We are currently acquiring and building on the first 650 hectares. We are spending around Rp 200 billion [US$20 million] on it,” Soenoto said at a conference recently.
He said that the idea of forming an industry cluster came after the country saw a significant surge in furniture exports due to raw rattan export restrictions stipulated in a ministerial regulation issued in 2011.
Indonesia is the world’s biggest rattan producer and supplies 80 percent of the world’s raw rattan needs, but most of its raw rattan has been exported mainly to China and Taiwan.
Indonesia sold $300 million worth of finished rattan products in 2008, which plunged to $167 million in 2009 and to $138 million by the end of 2010. Despite wide criticism, the government decided to ban the export of raw rattan, opting to focus on the processing industry.
In 2012, according to Trade Ministry data, exports of rattan furniture and handicrafts soared to 26.9 percent and 213.8 percent to $215.7 million and $42.4 million, respectively, compared to those in 2011.

The cluster, which is designed to be the country’s biggest furniture outlet, is expected to help with maintaining the numbers and improving Indonesia’s domestic and international furniture sales.
“China, which is the world’s biggest furniture exporter, has a furniture cluster to produce and promote their products, which is how we learned about the importance of establishing a cluster,” Soenoto explained.

He also added that the cluster was projected to help the association in achieving its $5 billion export target and creating 5 million jobs within the next five years. The association data shows that the furniture industry provides about half a million direct jobs and two million indirect jobs.
He said that the cluster would be managed by PT Cahaya Sakti Furintraco, known for its mass furniture product, Olympic, which first coined the idea.

PT Cahaya Sakti Furintacro’s Au Biantoro told reporters that the center would be equipped with adequate facilities such as schools, housing and hotels, to accommodate workers, and potential buyers and investors.
“We chose Sukabumi for its affordable human resources and available land so we can further cut production costs,” he told reporters in the meeting.
Biantoro said that being a labor intensive sector, furniture businesses were hurt badly by the increased minimum wage applied simultaneously last year, which prompted him to relocate his factory in Sentul, Bogor, where minimum wage was set at Rp 2 million a month.
The minimum wage in Sukabumi is Rp 1.2 million, much lower compared to those in Greater Jakarta (Jakarta, Tangerang, Bekasi, Depok, and Bogor) where minimum wage ranges from Rp 2 million to 2.2 million a month.
“My factory would occupy only around 10 hectares of the lot and the cluster can accommodate up to 300 furniture industries,” Biantoro, who is also an advisor for the furniture association, explained.
“My company will buy and clear the land, but we’ll leave the construction [of workshops and outlets] to each company or investor,” he said. (aml)