A look at the local furniture business

Business News of Tuesday, 6 January 2015

Source: Graphic Online

Furniture Sofa

Wood processing and furniture production is an age-old vocation in Ghana. The sector undoubtedly employs a huge number of artisans. In addition, it is an immediate employment avenue for young people who are unable to continue their education to tertiary institutions due to financial limitations.

As such, the sector has become a major contributor to local economic development, and also offers local communities the opportunity to work together for the improvement of the country’s economy.

In many jurisdictions across the globe, the sector has been identified as a major revenue contributor to the country’s gross domestic product (GDP).

Available data from the Turkish Statistical Institute (TurkStat) indicates that the furniture sector which employed some 150,427 people with 34,438 companies contributed $2,85 million to the that country’s GDP in 2009 alone.

In the last 10 years, export of Turkish furniture to some 172 countries worldwide increased from US $192.1 million in 2001 to $1,607.3 million in 2011. Local manufacturers

While Ghana’s wood sector continues to be an avenue for informal sector employment for many young, creative people, the demand for imported furniture has seen many manufacturers folding up and diverting into commerce. Some of the wood used by furniture manufacturers have been banned.

According to the Spokesperson for the Tema Wood Manufacturers Association (TEWOMA), Mr Delali Amexo, specialised lumber and solid wood for furniture production has become an illegal commodity in most timber markets nationwide.

The exportation of specialised woods such as mahogany, cedar, walnut, asanfena, hyedua, sapale and odum used for furniture production by the government and its agencies have surged, as such, local producers solely rely on imported chip boards for their production.

Mr Amexo further stated that woods such as laminates and medium density fibre board (MDF) that were not very strong were also being imported into the country for the purposes of manufacturing furniture. Furniture produced from these boards, he explained, often tended to have a short lifespan.

The increasing interest in the exportation of sawn wood in solid lumber form has seen local producers exclusively relying on chainsaw operators for the supply of their raw materials to ensure that they remain in business.

The association was of the view that a percentage of the export concessions ought to be made available to the local industry.

Chainsaw operation

The existing ban on the felling of trees using the chainsaw, on the other hand, has compounded the woes of local producers. The ban stems from the destruction of minor wood species when they are felling trees.

However, Mr Amexo was of the view that logging even cause much more damage to new plantations owing to the manner in which such activities were carried out. While admitting that sawn woods were easy to process, their unavailability to local producers has necessitated the need for them to look elsewhere.

Similarly, the influx of cheap imported furniture continues to derail the efforts of local producers.

Security harassment

Owing to the illegality attached to chainsawn wood, people engaged in this trade were constantly at the mercy of the police, the military and Forestry Commission’s officials.

In many instances, security personnel intercept trucks loaded with chainsawn wood meant for most timber markets in Tema, Accra and its immediate environs, with owners being made to pay huge sums of money they are allowed to transport the products to their destinations.

“Security operatives often charge GH¢4,000 or more depending on the quantity of wood being transported. Failure to pay more often leads to a confiscation of the woods, which are often auctioned by officials of the Forestry Commission to their cronies”, Mr Amexo alleged.

“There are many instances when police and military patrol teams including forestry officials pursue transporters into the timber market, particularly at night, amid indiscriminate firing of shots in their quest to ensure the transporters meet their demands”, he added. Such moves, Mr Amexo explained, had often led to most chainsaw suppliers pricing the woods at very high prices to ensure they recoup their investments.

The dependence on chainsaw operators for supply to the local market has seen manufacturers working on limited quantities of furniture for the market.

While querying how much the government was earning from the export of lumber and other solid wood, Mr Amexo also questioned the wisdom in the mounting of a strong crusade for the patronage of made-in-Ghana products by the government.

Govt’s local furniture policy

The government in September this year instituted an administrative ban on the importation of furniture in line with measures aimed at stabilising the local currency, which witnessed a historic fall against major trading currencies. The move was also to ensure that the patronage of locally produced furniture generates employment for young people.

While many players welcomed the development as one that would likely ensure a transformation and promote growth in the industry, local furniture producers, on the other hand, have queried the wisdom in the policy, when raw materials challenges continue to plague the local industry.

“If government wants to use locally manufactured furniture, how is it addressing the issue of the raw materials to the local market? Mr Maxwell Mathew Prempeh, President of TEWOMA queried.

Whereas the government sought to promote local-led development by igniting the patronage of made-in-Ghana goods, the country’s legislative assembly gave justification to the importation of some 300 pieces of furniture for the refurbishment of the parliamentary chamber. The leadership of Parliament gave the indication that it was impossible for local producers to manufacture the furniture within a given time frame, hence the need for the import from China.

“It is not the issue that because they say we should use made-in-Ghana goods, then if you want to buy 300 furniture at the end of this week, you must go from shop to shop,” Deputy Majority Leader, Mr Alfred Agbesi remarked.

The move, Mr Prempeh argued, was an insult to local producers, who could do a better job if they were given the opportunity.

Way forward

The contribution of every sector is key to attaining development goals. As such, the wood sector cannot be ignored. The ongoing construction of some 200 new day senior high schools, an initiative by the government, could be used as a test case for technical students to gain practical knowledge in their areas of study. For instance, students offering programmes in woodwork could be tasked to produce windows and doors for the structures under construction.

In doing so, revenue generated by the school could provide a respite for them and wean them off government funding.

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