In May 2003 the European Union (EU) initiated an action plan (FLEGT – Forest Law Enforcement, Governance and Trade) followed by the issuance of EUTR (European Union Timber Regulation), effective March 2013, which prohibits the entry of illegal timber and timber products into the EU market. Indonesia as one of the exporting countries reacts with the FLEGT-VPA since 2007 where the Indonesia Timber Legality Assurance System (Sistem Verifikasi Legalitas Kayu – SVLK) forms the basis of the agreement andrecognized by the EU through FLEGT licensing of November 15, 2016. This study is intended to examine the effect of licenses on competitiveness of Indonesian wooden furnitureproducts in EU market. The study covers 8 provinces of wooden furniture center in Indonesia. The methods used include interviews, surveys, focus group discussions; involving producers and related institutions. The data obtained were processed and analyzed using Diamond Porter Model. The FLEGT license has increased the competitiveness of Indonesian wooden furniture in facilitating entry into the EU market. However, there are other factors at play such as relatively new nature of FLEGT-VPA and FLEGT licensing, transition period that every major policy process such FLEGT Licenses experience, level of implementation the EUTR as an incentive towards FLEGT-VPA, timber price, quality, availability, technical performance, logistics and fashion trends, especially for furniture retailers. All these factors have implications for the competitiveness of Indonesia’s FLEGT licensed timber in the EU.
Tag: furniture
Value Chain Approaches in a Stagnant Industry: The Case of Furniture Production in Jepara, Indonesia
This article assesses impacts of the Jepara Furniture Value Chain project, which was intended to address challenges faced by small-scale furniture producers in Jepara, Indonesia. The assessment focuses on effects of membership in the APKJ, an association started as part of the project. Propensity score matching was used to compare differences in outcome variables for association members and matched non-members. A limited, positive impact of APKJ membership was found. Members have improved their marketing behaviors in ways that will allow them to retain more value compared to non-members. APKJ members are also more likely to have obtained certificates of timber legality. Membership in the APKJ does not have a significant effect on firm profit and there is little evidence of an industry transformation. The paper also provides a critique of indiscriminate use of a value chain approach.
National demand for sawnwood in Cameroon: A barrier to or an opportunity for promoting the use of timber resources of legal origin?
By signing the Voluntary Partnership Agreement of the FLEGT Action Plan, Cameroon made a commitment to supply its domestic timber market with sawnwood produced in compliance with the legislation. This report reviews the various types of demands and supplies of sawnwood on the Cameroonian internal market (in Yaoundé and Douala) in order to identify the possibilities of promoting the long-term consumption of sawnwood and furniture of legal origin.
The private and public demands of the national market target three main uses of timber: construction material for the building and the public works sector, door and window frames and furniture. These demands are expressed at four levels of trade: (1) the urban markets, where 830,000 m3 of sawnwood are sold per year; (2) the joinery workshops, which produce a minimum of 130,000 items of furniture a year, for a total volume of 22,000 m3 of sawnwood after the fourth stage transformation and for a turnover in excess of XAF 8 billion; (3) the furniture sales shops and showrooms, which sold at least 22,282 items of furniture in 2015, corresponding to a sawnwood volume of 5788 m3 and a turnover of XAF 3.33 billion; (4) the government procurement contracts, where the demand for sawnwood stands at around 13,000 m3 a year, making the State the main buyer of sawnwood and furniture on the internal market.
To meet these various demands, there are four supplies of sawnwood and furniture of supposed legal origin: (1) the community forests, whose total legal sawnwood production has never reached 10,000 m3 a year since their creation; (2) the timber exploitation permits (PEBOs), which were launched in 2012 but with limited success as they only allow a maximum sawnwood volume of 8000 m3; (3) the industries, which supply the domestic market with 145,000 m3 of sawnwood – mainly in the form of sawmill scrap – but without monitoring the volumes by these companies; (4) the imports of wooden furniture, which have doubled since 2007 and reached a sales level of XAF 3 billion in 2015, for approximately 10,000 m3.
By matching these sawnwood demands and supplies, we realize that there are today two major barriers to the emergence of a legal sawnwood domestic market in Cameroon. On one hand, the buyers’ acceptance of an increase in sawnwood prices as a result of their legalization will not be sufficient to cover the current costs of sawnwood from legal sources. On the other hand, the maximum production of artisanal sawnwood from legal sources will cover only a small part of consumers’ needs. Thus the legalization of the domestic market of timber in Cameroon faces a double constraint of price and volume.
To address these problems, the most often quoted and, to a certain extent, experimented approach is a decrease in the production cost of legally sawnwood destined for the domestic market. A complementary approach of supporting the private and government demands of sawnwood of legal origin could also be promoted.