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