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FORTY
furniture-exporting firms in
Cebu have closed down in the past two years not only due to
tougher competition but mainly owing to the
strengthening peso and declining demand from the
US
market. The number represents some 35 percent of the
number of furniture companies in Cebu.
Eric
Casas, Cebu Furniture Industry Foundation (CFIF)
president, however, said he is still optimistic with the
overall performance of Cebu’s furniture makers in 2007
as they posted less than 1-percent positive growth,
compared with a negative showing by the industry
nationwide.
“If the
companies earned $41 million a year, that would have
been P55 million two years ago, now it’s only P40
million,” he said.
The
closure of the companies caused the loss of some 5,000
direct jobs and more than double the figure in
contracted jobs and indirect economic opportunities.
Casas,
however, explained that the closures were mainly on the
small and medium-sized makers who found it tough to
market in big retail outlets in the United States.
“It was
the new and small players who were overwhelmed with the
requirements of exporting. But the older and bigger ones
are still there and fighting it out,” Casas said.
A bigger
segment of the industry—the subcontractors—are also not
very much affected because they could transfer their
work elsewhere.
Casas
said 2008 would still be a challenging year for the
industry, especially with the reported
US
recession. He said, however, that emerging markets like
Russia and the Middle East and Cebu’s presence in the
upper-end markets of the
United States
would pull the industry through.
Cebu’s
furniture industry make up close to half of the
Philippines’
$275-million industry. Cebu’s markets are mainly
high-end brands with clients in the United States,
Manila and Luzon furniture firms which target
middle-class clients and local markets.
Cebu’s
furniture makers have been known to create pieces for
homes of Brad Pitt, Steffi Graf and other celebrities.
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