Economy, Domestic Economy
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Furniture Industry Lacking Past Attraction

Furniture Industry Lacking Past AttractionFurniture Industry Lacking Past Attraction

As many as 20,000 manufacturers of luxury furniture are active in Iran, the head of Tehran Carpenters and Furniture Producers Union said.

“Despite this, Iran’s furniture industry has a poor presence in regional markets. Turkey is the main exporter of furniture in the region,” Abdolhossein Abbasi added.

Noting that the private sector provides for 100% of the capital required to run such units, Abbasi said the ongoing economic recession in the country has caught up with this market as well, leaving 65% of its capacities untapped, Forsat-e Emrooz daily reported.

“Many producers have distanced themselves from this market and the number of people working in this sector is declining by the day. In view of the unfavorable economic conditions, customers have also lost their purchasing power,” he said.

“When people have to struggle to meet their basic needs, they won’t consider buying new sofas or even re-upholstering their furniture. This leads to sales stagnation and consequently recession in the market. Therefore, investment in this potentially-lucrative business carries high risks in Iran. It does not hold its past attraction.”

Worldwide, according to a new report by Allied Market Research, the luxury furniture market is expected to reach $27.01 billion by 2020, registering a compound annual growth rate of 4.1% during 2015-20.

“However, the Iranian furniture market faces many problems,” Abbasi said.

“The payment of tax, wages, insurance and debts have all discouraged manufacturers. Beleaguered producers are the victims of credit crunch and unavailability of banking facilities. The government also fails to offer support to the private sector.”

Saeed Sarraf, furniture producer and seller, said more than 70% of the furniture in Iran are manufactured traditionally, that is in workshops of up to 200 square meters.

“The main shortcomings of traditional manufacturing are low quality and waste of raw materials. We need to streamline production process and shift to advanced, mechanized production,” he said.

“Iran relies on the import of wood to meet the need for this basic raw material for making furniture. In the past, the domestic market would supply the wood but since about one and a half years, logs are imported from Russia, Armenia and Georgia. Fabric, another component of upholstered furniture, should also be imported, thanks to the closure of textile factories.”

Financialtribune.com