| Furniture industry in Indonesia has boomed since | | | | There has been no government initiative to |
| the 1998 Asian crisis. The main reason behind this | | | | support this industry. Furthermore, low |
| boom was the weak rupiah, availability of | | | | investment in machinery and training from small |
| abundant teak plantations and no or very little | | | | manufacturers has rendered such companies very |
| competition from outside. Furniture buyers from | | | | stagnant. Most of the local manufacturers neither |
| all over the world took advantage of this cheaper | | | | have marketing knowledge nor top management |
| teakwood furniture prices including a lot of big | | | | will to present their products directly to offshore |
| global hypermarkets. The result was the | | | | customers. The big foreign trading companies are |
| availability of Indonesian teak furniture in almost | | | | exploiting this situation. They are using local |
| every part of the world. Plenty of small furniture | | | | manufacturers to produce goods for them and |
| manufacturing firms start entering this furniture | | | | market them at premium prices into their |
| boom to provide cheap teak furniture to the | | | | markets. These foreign companies are exerting |
| global market, which benefited everybody at that | | | | lot of pressure on local manufacturers and |
| time. There is no denial that the growth in number | | | | demanding the cheapest price possible. This |
| of enterprises and the number of jobs in furniture | | | | resulted in local manufacturers paying lower |
| sector did rose dramatically but since then other | | | | wages to their workers, using lower quality raw |
| internal and external factors had slowed this | | | | materials and do everything they can to keep |
| Indonesian teak furniture boom. | | | | their businesses profitable. This vicious circle has a |
| Indonesian teak furniture industry is suffering | | | | bad effect on all sectors of the industry: labor, |
| from the scarcity and cost of the raw materials. | | | | investment, social responsibility, quality of products |
| The illegally logged timber is not available the way | | | | and so forth. |
| it used to be few years back. This made the | | | | Another challenge to Indonesian teak furniture |
| small furniture enterprises, which had benefited | | | | Industry is the competition from countries like |
| earlier with the abundant use of illegal logged | | | | Malaysia, Vietnam and China. Malaysia is one of |
| wood very difficult to sustain and most of them | | | | the major exporter of wood furniture to the |
| have even stopped their operations. The prices of | | | | global market, though it does not have plantation |
| teak timber for viable source (PERHUTANI) has | | | | resources like Indonesia, still very good amount of |
| almost tripled in last 7- 8 years and the buyers | | | | teak furniture to the global market is exported |
| from outside still want to pay the same or even | | | | from Malaysia. It is because of the fact that illegal |
| less. They don't want to increase the prices at | | | | logged timber from Indonesia still goes to Malaysia. |
| which they used to buy as they are selling their | | | | Malaysia, Vietnam, and China export the teak |
| goods cheaper in their markets compared to 7 | | | | furniture from their countries at cheaper prices |
| years back. This has forced many small | | | | than Indonesian though those countries still lack |
| enterprises to lower down the quality of teak | | | | experienced and skilled craftsmen. |
| timber used in their furniture. This has resulted in | | | | In nutshell, the Indonesian teak furniture industry |
| the evolution of treated teak furniture in the | | | | has benefited a lot of people in Indonesia and |
| market. Treated teak timber furniture is made of | | | | abroad but the competitive pressures now from |
| very low quality timber which is then chemically | | | | inside and as well as from outside, are dragging |
| treated to make sure that furniture has the | | | | the industry into the race to the bottom. |
| homogeneous color. | | | | |