Making Folks Want What You Produce

Business Mirror
Monday, 16 March 2009 21:16

EXPORT furniture manufacturer Charles Streegan is known in Cebu not to mince his words. And so when asked during a press conference how bad the business are these days, people braced for his words and reality. “It’s terrible. There is no business these days.
We’ve been in this business for 35 years, and I have not seen anything like it,” Streegan, who is also vice president of the Cebu Furniture Industries Foundation (CFIF), said. “2009 is practically lost. We are now already looking at how to make it in 2010.”

The recently concluded Cebu International Furniture and Furnishings Exhibition (CebuX) 2009 was a clear gauge of the sheer size of the challenge the industry is facing these days, with exhibitors and attendance down by almost half. It did not also help that Manila- and Luzon-based manufacturers set their own show, Manila NOW, exactly on the same dates as the 25-year-old CebuX.

In less than two years, close to 15,000 direct employees of the industry lost their jobs, while around 30 companies closed. This does not count the subcontractors, suppliers and support economies relying on the industry.

Yet in many corners during the CebuX, manufacturers were still hopeful, in many booths business was still being transacted and overall industry players said they are hitting rock-bottom and there should be no other way but up.

The Cebu furniture industry is a proud example of Filipino creativity, ingenuity and craftsmanship—the best example of how a local industry can make it big abroad. From Hollywood movie sets, the recently most popular being the Las Vegas set of Ocean’s 12, to homes of celebrities like Brad Pitt, as well as Mr. and Mrs. André Agassi, or even Big Brother Australia, Cebu-made furniture is making a splash wherever it is displayed.


As of three years ago, Cebu made up almost half of the country’s estimated $300-million total in furniture exports, despite comprising only 20 percent of the total number of manufacturers in the country—a testament to Cebu’s positioning as a center for design-oriented, high-end furniture pieces as compared with mass-produced chairs and tables of China and Vietnam.



That is why the Department of Tourism, through Secretary Joseph Ace Durano, formally adopted the industry as a tourism attraction and with it valuable assistance in terms of marketing for the industry.

“There is no other industry that best describes the best of what the Philippines can offer,” the Cebuano secretary said. “The materials show our rich natural resources and the design and craftsmanship reflect the culture and the aptitude of our people.”

Despite the slowing world economy, manufacturers are holding fast, trying to survive the year while getting ready for the good times they all hope would come soon.

According to Lita Quisumbing of JLQ International Inc., they were already expecting a slow show this year, yet they committed to display and take up two booth spaces just to show to their clients and buyers that they are still in business and ready to take orders.

“We need to show to our buyers that we are still here, that is why we joined the show,” she said.

Another exhibitor, Jim Cassels of Mandaue City-based Lenbert Manufacturing Inc., said Cebu is surviving the hard times because it positioned itself as a design destination, not for promo furniture.

“We know that during bad times the rich are not that affected. They are affected but they can still buy furniture,” Cassels said. “If you look at the promo market, they’re dead. Factories in China are closing because there are no buyers anymore.”

Buyers are also recognizing the value of attending the Cebu show, although many lament the small size in terms of number of exhibitors. Tom Bihari of Australia said he had been visiting CebuX for many years, missing the event only last year.

“I come here because I know Cebu is very creative, and so I come here to look for new designs,” Bihari said.

Just like many other buyers, however, he said the show was small.

“I don’t understand why Manila is having another show. It’s just silly. There should only be one show,” he added.

According to Eric Vincent Casas, president of CFIF, the economic crisis is also in a way weeding the industry of players who could not slug it out in the international market. He said the companies that are surviving are finding ways to further cut costs and “going back to the basics”—design and material innovation.

“This is the time for us to reassess ourselves and how we are doing things, because we have to be ready for the future,” Casas said.

Angela Paulin, also the vice president of CFIF, said many companies like her take these times to develop more designs.

Despite the challenges, industry players are still optimistic about the future of the industry. During a side seminar at the CebuX, Hans Merkel, the editor in chief of Mobelmarkt magazine in Germany, said the country and its €8-billion-a-year furniture import, the biggest in Europe, is a lucrative market during these crisis years.

“They say there is a relationship between cars and furniture. When people buy less cars, they buy more furniture,” Merkel said. “It is about culture, Germans like to make a cozy home while there are problems outside.”

German furniture imports grew by 8 percent during the first nine months of 2008 compared with the same period in 2007, just as the global economic crisis was setting in. Imports from China hit €720 million, Vietnam €111 million and Indonesia €77.5 million, underlining the vast market the Philippines could tap with its superior design.

“Furniture is seen to be the winners during the crisis,” Merkel said. During the last day of CebuX, several German retailers visited the show to look for potential pieces they could sell to the Germans. “The situation is not as bad as expected. The Germans continue to be the highest spender per capita on furniture, making them very attractive to international manufacturers and suppliers.”

Merkel said the Chinese market, once the juggernaut of the export furniture industry, is losing its foothold because of poor quality and failure to meet strict German standards, creating an opportunity for Philippine manufacturers.

Streegan said that with all the economic problems, 2009 is the defining moment of the industry—the stronger, better managed companies will survive to live for the better days while the weaker ones will disappear.

“This is the defining moment in the industry and the people who want to make it big in the industry. This is a great opportunity for us to change and be better for 2010,” Streegan said.

Cebu-based celebrated designer Kenneth Cobonpue said during crisis, Filipinos and designers are pushed not only to create beautiful pieces but ones that are truly global.

“The world does not need another chair. But we have to create something that will make the buyer say, ‘I want to have that piece,’” Cobonpue said.