BUY NOW Furniture Essential sourcing intelligence y l n o e g a p e l p m a S December 2013 US$150 Philippines supplier profiles Detailed profiles of 20 suppliers with verified manufacturing and export credentials Pampanga LA Bulacan MANILA Cavite vite Product gallery Specifications and full-color olor lor elling images of 163 top-selling export productss ranging ging o beach ach chairs cha from beds to Cebu Negros Occidental Industry ndustry trends Coverage of current cur issues, plus insight insights into supply centers, pro centers products and pricing Global Sources is offering this series of Developing Country Sourcing Reports as part of its corporate social responsibility undertakings in partnership with the Hinrich Foundation, a philanthropic development organization whose mission is promoting sustainable global trade. The aim is to give international buyers new sourcing opportunities from experienced exporters, generating orders and creating lasting jobs in developing economies. www.ChinaSourcingReports.com Executive Summary Supplier capability in the Philippines FURNITURE The furniture industry in the Philippines anticipates favorable prospects in the coming year as the recovery of the US economy results in burgeoning demand. In addition to this key destination, growing revenue from alternative markets such as the Middle East and South America is a major factor driving the sector. Key findings 1. A crucial challenge facing the industry is the government’s adoption of stringent policies on the sourcing of locally harvested wood. Several enterprises are compelled to import lumber because of this directive, pushing up raw material costs by as much as 20 percent. The lack of a certification system that complies with EU requirements also presents a considerable difficulty to makers with clients in the bloc. The industry emphasizes the midrange and upscale segments to sustain development and avoid intense competition in the low end with neighboring sourcing centers, particularly China. Because of the popularity of such models in emerging markets, many manufacturers are able to maintain their profit margins. A number of advantages benefit the sector. The most important of these is the steady availability of plant-based ed inputs such as bamboo and Manila anila hemp. Strong OEM capability lity is another strength possessed byy the industry. ndustry. 2. Due to obstacles in timber procurement, product design esign focuses on the utilization tion of natural materials such as bamboo, rattan and Manila hemp. mp. Releases also feature elements ts that enhance vvisual appeal, including complex carvings and woven patterns. p m 3. Overseas Overse revenue in the coming year is i expected to generally climb, with more than two-thirds of featured companies projecting an improvement in shipments. Most will continue to concentrate on the US or the EU, although a gr growing number are expanding xpanding their reach in alternative markets. arkets 4. The majority ority of manufacturers featured expect to tured in this report expec keep stable over the next six eep prices stab months to maintain competitiveness and retain buyers. A considerable d retai minority will raise quotes to counter escalating production expenses. The rate of increase is generally seen to be within 10 percent. 5. Metro Manila and the provinces of Cebu and Pampanga are the key supply hubs in the country. Makers in these areas specialize in pieces made of plant-based inputs and metal and marble. Objective, e, methodology ethodology & scope This Philippines Sourcing Report Re is part pa of a series buyers with eries designed to provide prov buy information formation ormation on new p products produc from export manufacturers ufacturers facturers in i supply markets that specialize handmade merchandise. ize in handm h The Developing Country Sourcing Report series is part of Global Sources’ corporate social responsibility initiatives. It is offered in conjunction with the Hinrich Foundation, whose mission is promoting sustainable global trade. One of its objectives is to help create jobs in developing Asia through export promotion. To produce this report, large, midsize and emerging manufacturers, all with substantial export experience, were surveyed. The selection of suppliers is designed to reflect the composition of the industry in the Philippines in terms of geographic location, materials used and range of products offered. For in-depth profiles, our researchers visited the facilities of each company and interviewed senior executives who discussed their recent performance and provided forecasts for the next 12 months. All other makers in this report were either visited or contacted by phone. In each case, companies were required to answer specific questions designed to verify their manufacturing and export credentials, including a breakdown of exports by product type and market. Suppliers also participated in a survey designed to provide insight into the industry. This report covers different types of furniture available in the Philippines, including living room, dining and kitchen, bedroom, bar and bistro, and outdoor pieces. Each product category has its own price guide that describes features of the low end, midrange and high end. In this report • 18 in-depth company profiles • 163 top-selling export products • Supplier demographics • Supplier survey • Industry statistics and charts The Industry Overview section discusses key issues affecting export manufacturers. It provides insight on the composition of the industry and elaborates on the important supply centers within the Philippines. The Products & Prices section details the features and price ranges of furniture. It also examines the design and manufacturing processes, main materials used, and sourcing centers where components are procured. www.ChinaSourcingReports.com 3 Contents CONTENTS EXECUTIVE SUMMARY Key findings Objective, methodology & scope 3 INDUSTRY OVERVIEW Exports 11 Products & prices Production & export statistics Typical parts & components Price guides 13 Supplier survey Export prices Export sales Export markets Major challenges R&D focus 20 SUPPLIER PROFILES Supplier matrix: Comparison ison off supplier location location, sales revenue & export port capability bility Profiles of 18 verifi rified suppliers 23 PRODUCT CT GALLERY Living ing ng room furnitu furniture Dining ng & kitchen fu furniture Bedroom furniture Bar & bistro fu furniture Outdoor furnitu furniture 67 CONTA CONTACT DETAILS 97 y l n o e g a p e l p m a S Copyright 2013 TTrade Media Limited. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Trade Media Holdings Limited and Trade Media Limited is prohibited. Published by Publishers Representatives Limited (on behalf of Trade Media Limited) 4th Floor, Century Yard, Cricket Square, Elgin Avenue, P.O. Box 32322 SMB, George Town, Grand Cayman, Cayman Islands c/o 22/F Vita Tower, 29 Wong Chuk Hang Road, Aberdeen, Hong Kong ISBN 978-988-8245-00-0 Disclaimer: Any recommendation contained in this report may not be suitable for all investors or businesses. Moreover, although the information contained in this report is obtained from sources believed to be reasonably reliable, the accuracy or completeness of such information cannot be guaranteed. The author and the publisher of this report (and the publisher’s affiliates, agents, sales representatives and service contractors) do not make any representation or warranty whatsoever (whether express or implied) in relation to any of the contents of this report (including any information, opinion, recommendation or conclusion contained in this report) (collectively, “Contents”), whether as to the accuracy, completeness, quality, fitness, suitability or reliability of such Contents (or any portion thereof ) or otherwise, and shall not be liable under any circumstances whatsoever for any error, omission, defect or deficiency in, or for any use of or reliance on, such Contents (or any portion thereof ). All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. Products that are not the specific topics of editorial articles are shown for illustrative and/or demonstrative purposes only. We, our affiliates, and our affiliates’ respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof ) which infringe on any intellectual property or other rights of a third party. 4 Philippines Sourcing Reports Industry Overview Industry Overview Furniture suppliers in the Philippines maintain an optimistic outlook on exports despite a slight drop in outbound shipments last year. Companies have been receiving more orders for customized pieces from hotels, resorts and department stores. Local customers are usually based in Metro Manila, and the provinces of Cebu, Bohol and Palawan, where resorts frequented by tourists are mostly located. competitiveness against their foreign counterparts. y l n o e g a p e l p m a S Although foreign revenue shrunk roughly 1 percent to $160 million in 2012, domestic makers are confident of registering higher turnover in 2013 because of robust sales in emerging destinations. Estimates point to growth reaching 5 percent amid strong demand from the Asia-Pacific region, particularly Southeast Asia. Shipments to Indonesia jumped from $7.7 million to $13.2 million, making it the industry’s second-biggest market last year. Earnings from deliveries to Thailand expanded from $1.3 million to $2.8 million. Income from Singapore soared 40 percent to $2.2 million. The US remains the line’s largest importer, with deliveries accelerating elerating g 8 percent to $77.3 million n last year. ear. After Indonesia, Japan an rounds nds out the top three, contributing ibuting g $12 million to foreign sales. es. s. Other key destinations are the UK, Germany and the UA UAE. Exports to o China and Austral Australia each went down n to $2.6 millio million in 2012, a decline of 78 and 228 percent, l to South Korea respectively. Sales dipped 73 percent to $1.1 million. The drop was blamed on intensifying price competition in the region, particularly from suppliers in Vietnam and Indonesia. Makers in both sourcing hubs are able to reduce quotes because of lower production costs. Competitive advantages One of the industry’s strengths is the ready availability of natural materials emp such as bamboo, rattan, Manila hemp panies and water hyacinth. As such, companies rt these no longer need to import ng them em to produce components, allowing petitive prices. rices. models at competitive es show that there are 52,000 52 Estimates ctares of land planted w with bam hectares bamboo across the archipelago. Re Rece Recently, the government has comm commi committed to add up to 166,000 hec hectares of bamboo farms by 2015 to mee meet the growing demand for tthis plan plant. An Another edge enjoyed by makers is the presence of a large pool of workers proficient in various manufacturing steps such as weaving and carving. Because of this, suppliers can easily subcontract some of the production processes that require their expertise. Craftsmen are also hired to highlight traditional themes in new models, thereby strengthening local enterprises’ To cope, domestic makers are shifting their focus on midrange and highend versions, which are popular in developed economies in the Middle East. Companies are also boosting fabrication of models that adopt indigenous materials such as Manila hemp, bamboo, buri fiber and capiz shell. Demand for these items is rising, especially in the US and the EU. Another roadblock facing the sector is the implementation of stricter timber sourcing policies. Because of an existing logging ban, some enterprises are forced to use imported wood, which is typically 10 to 20 percent more Value Value by month $ million $ thousand 2012 2013 35 $160 30 25 $151 20 15 10 5 2010 Stable domestic demand is also fuelling the outlook of manufacturers. Challenges ges Price competition is con considered as the most crucial difficult difficulty affecting the industry. Supplie indust Suppliers are losing orders to their fforeign rivals because they find it hard tto match quotes offered by m ma makers in China, Vietnam, Myanmar and Indonesia. Exports $161 With these developments, domestic enterprises are expanding their clientele in emerging markets such as South America and the Middle East to make growth conducive. Saudi Arabia, the UAE, Brazil and Panama are cited as the top targets for the year ahead. Acceptance of small orders is ano another dus advantage possessed by the indust industry. Some manufacturers allow MOQs tems such as of one piece for large items d five pieces for stools, gazebos, and nd tables. s. chairs and 2011 2012 Source: Bureau of Export Trade Promotion J F M A M J J A S O N D Source: International Trade Centre www.ChinaSourcingReports.com 11 Supplier Profiles SUPPLIER MATRIX Company Year established Head office location Factory location(s) Ownership Full-time employees Part-time employees Avanti 2012 Mandaue (Cebu) Mandaue (Cebu) Locally owned 15 Carved Marble 1999 Angeles (Pampanga) Angeles (Pampanga) Locally owned 15 Cebu Fil 1986 Lapu-Lapu City (Cebu) Lapu-Lapu City (Cebu) Foreigninvested 80 20 ✗ Country Accents 1994 Bacolor (Pampanga) Bacolor (Pampanga) ly Locally wned owned 8 50 ✗ Cymru 2004 Mandaue (Cebu) Mandaue (Cebu) Locally cally owned 35 Diamond Cane 1986 Mandaue (Cebu) Mandaue ue (Cebu) bu) Locally owned 100 100 ✗ Ezra 2006 Makati (Metro Manila) Las Piñas (Metro Ma Manila) Lo Locally owned 5 50 ✗ Golden Fortune 2008 Quezon City Metro Manila) (Metro Quezo City Cit Quezon ro Manila) (Metro Locally owned 12 30 ✗ John Joven Handicraft 011 2011 Paete (Laguna) (Laguna Santa Maria (Laguna) Locally owned 5 20 ✗ Kahoyan 2007 200 Calum Calumpit (B (Bulacan) Calumpit (Bulacan) Locally owned 60 10 ✗ n Lakan 2008 20 Marikina (Metro Manila) Marikina (Metro Manila) Locally owned 15 30 ✗ kline ne Markline 2008 Muntinlupa (Metro Manila) Muntinlupa (Metro Manila) Locally owned 40 ton Maturan Stone 2007 Liloan (Cebu) Liloan (Cebu) Locally owned 10 50 ✗ Peter’s 1980 San Fernando (Pampanga) San Fernando (Pampanga) Locally owned 48 4 ✗ Ronnie Handicraft 2009 Angeles (Pampanga) Angeles (Pampanga) Locally owned 11 20 ✗ Silahis 1967 Parañaque (Metro Manila) Parañaque (Metro Manila) Locally owned 30 10 ✗ Tumandok 1988 Bacolod (Negros Occidental) Bago (Negros Occidental) Locally owned 46 Winners 1993 Bacoor (Cavite) Bacoor (Cavite) Locally owned 9 40 ISO certified ✗ y l n o e g a p e l p m a S 24 Philippines Sourcing Reports ✗ ✗ ✗ ✗ 30 ✓ Supplier Profiles Supplier Profile Avanti Philippine Furniture Inc. INQUIRE NOW Established in 2012, Avanti specializes in synthetic rattan furniture. It generates $600,000 in total annual revenue. About two-thirds of output is sent abroad. France takes up 70 percent of shipments. The Middle East absorbs one-fifth of exports, with Bahrain, the UAE and Saudi Arabia as the key markets. The rest goes to Australia. All manufacturing steps are performed in a 1,100sqm factory in Mandaue city of Cebu province. The plant is equipped with locally purchased welding and sewing machines. Avanti employs 10 full-time and 40 temporary staff members. They can turn out 500 pieces every month. The peak season is from August to December. Outdoor models contribute 50 percent to foreign sales. The best-sellers in the line are chaise lounges and garden dining sets. Ten inspectors make up the QC team. Visual checks focus on the quality of assembly and weaving. Products for all price segments are available. Basic dining chairs are offered for at least $60. Living room sets start at $900 and reach $2,500. ally Bubble wrap and cartons are normally um order used as packaging. The minimum requirement is one set per model. ays. Delivery is within 30 days. The company buys teak, synthetic rattan and aluminum from Indonesia. ember of the The supplier iss a member rs Confederation and an Philippinee Exporters ure Industries Foundation. Foundatio Cebu Furniture Itt plans to further expand its ma market presence esence in the EU in 2014. Two designers release up to five models every year. Company facts p m Year established stablished hed Head ead officee location Factory location(s) Ownership Full-time employee employees em Part-time employees Part-t emp Total annu Tota annual sales (all products) Capability Materials used Mahogany Teak Bamboo Rattan Water hyacinth Other wood types ct Exports by product urniture Living room furniture hen furniture Dining & kitchen oom furniture ture Bedroom Bar & bistro istro furniture Outdoor oor furniture 25% 25% – – 50% Exports by m market North America A EU Europ Europe (non-EU) A Asia-Pacific Middle East Other – 70% – 10% 20% – n o e Contact details 2012 2 Mandaue (Cebu) Mandaue (Cebu) Locally owned 15 40 $600,000 Business contact BORDEN Sherimae Phone (63-32) 420-4481 Fax (63-32) 414-0010 E-mail [email protected] URL www.avantiphilippine.com Sales & output: Furniture Annual sales Share of total sales Annual export sales Total monthly capacity Average monthly output Capacity utilized Average monthly exports Export ratio Major export customers 28 Philippines Sourcing Reports $600,000 100% $360,000 500 pieces 300 pieces 60% 200 pieces 67% Hazel Furniture (Bahrain), Stylish Outdoors (Australia), Sicomex N.C. (New Caledonia) ✗ ✓ ✗ ✓ ✗ ✗ Address S.E. Jaime Street, Paknaan, Mandaue, Cebu, Philippines Supplier Profiles Executive SumSupplier Profile Popular export models y l n o e g a p e l p m Model: MOQ: Packaging: Delivery: Price: Description: Breeza 1 set Bubble wrap, carton 30 days $986 Outdoor furniture set; synthetic rattan body and aluminum frame; powdercoated; 82x82x72cm sectional sofa, 82x82x30cm ottoman and 60x120x30cm table Model: MOQ: Packaging: Delivery: Price: Description: Cassandra 1 set Bubble wrap, carton on 30 days $2,575 Outdoor door furniture ure set; synthetic tic rattan body and aluminum num frame; powdercoated; two 107x96x72cm 97x96x72cm sofas, two 97x96x72c 97x armcha armchairs and 90x90x31cm 90 coffee table coffe Model: odel: MOQ: OQ: Packaging: ckaging: Delivery: Price: Description: Des Pal Palau 1 set Bubble wrap, carton Bub 30 days $3,625 Outdoor furniture set; synthetic rattan body and aluminum frame; powdercoated; 92x305x72 and 92x123x72cm modular sofa, and 100x148x48cm coffee table Model: MOQ: Packaging: Delivery: Price: Description: Paulina 1 set Bubble wrap, carton 30 days $520 Outdoor dining set; synthetic rattan body and aluminum frame; 80x80x75cm table and four 56x60x88cm chairs Model: MOQ: Packaging: Delivery: Price: Description: Romana 1 set Bubble wrap, carton 30 days $907 Outdoor furniture set; synthetic rattan body and aluminum frame; powder-coated; 83x154x73cm loveseat; two 83x85cmx73cm armchairs and 60x120x38cm coffee table Model: MOQ: Packaging: Delivery: Price: Description: Paris 1 set Bubble wrap, carton 30 days $2,605 Outdoor furniture set; synthetic rattan body and aluminum frame; powder-coated; 190x90x72cm sofa; two 71x 90x72cm armchairs and 120x80x40cm coffee table www.ChinaSourcingReports.com 29 BUY NOW Yes! 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