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Semarang, February 1 -- The Center for Furniture Development of Central Java and the International Finance Corporation’s Program for Eastern Indonesia SME Assistance (IFC PENSA), launched today the inaugural event of a series of programs aimed at helping the furniture industry overcome its main three obstacles to business development:
“The furniture industry will grow and prosper through constant innovation and improvements in the manufacturing process,” said Central Java Governor H. Mardiyanto, who opened the event. “Its competitive position will further be strengthened by understanding export market requirements and producing products accordingly.” Customers in Indonesia’s export markets are demanding greater environmental responsibility in furniture production. IFC PENSA Sustainable Supply Chain Linkage Program has developed a program to help small and medium-sized enterprises break into new markets. “Through a partnership with World Wildlife Fund, IFC PENSA is looking to stimulate and expand the supply of responsibly harvested timber available to the furniture industry. Through training and direct technical assistance we are working to help small medium enterprises source and use this timber,” said Euan Marshall, IFC PENSA's Program Manager. Timber sourced from well managed plantations in a sustainable manner will help suppliers meet the increasing wood demand from the furniture industry and help reduce natural forest depletion. IFC PENSA promotes Acacia substitution as an environmentally responsible approach. Acacia in furniture production has proved commercially sound because it is acceptable to customers in export markets and significantly cheaper than teak or Kalimantan woods. PENSA’s Sustainable Linkages Program research demonstrates that there is a significant supply, as much as 100,000 square meters, of Acacia logs that could be made available for furniture production each year. PENSA has been working to help plantations join certification programs and also developing an Acacia drying schedule. PENSA will provide direct training to furniture companies and saw mills on how to dry the wood effectively. “Acacia offers a very exciting opportunity given the current supply shortage of teak. Finding alternative and environmentally friendly wood sources will be crucial for the long-term sustainability of the furniture industry,” said Toni Prahasto, chairman of the Center for Furniture Development of Central Java. He also stressed that using alternative wood sources alone would not stop the worrying decline in competitiveness for furniture makers. “Greater attention needs to paid to quality control and improvements in manufacturing processes to comply with export market safety standards” he said. At the seminar, CEFED announced its intention to work with its members to establish a standardized scheme that will certify the quality of export-oriented products. CEFED combines the resources of the Board of Investment of Central Java, leading furniture manufacturers in Central Java, the University of Diponegoro and the Semarang Institute of Research and Standardization on Industry and Trade. CEFED has been established with a shared commitment to the strengthening of the competitive position of the Indonesian furniture and home furnishing in the global market. IFC-PENSA, is IFC’s technical assistance facilities supporting small and medium enterprises in Indonesia. IFC is the private sector arm of the World Bank Group. The PENSA facility has a five-year mandate and has been co-funded by IFC and the governments of Australia, Canada, Japan, Switzerland, The Netherlands and the Asian Development Bank with initial funding commitments of $23 million. The mission of International Finance Corporation (www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability and provides technical assistance and advice to governments and businesses. For further information contact:
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