Fierce competition from low-cost imports poses a formidable challenge to Canadian furniture manufacturers. Stefan Wille – President of the AKTRIN Furniture Information Center – says that the need to relocate production to off-shore sites is increasingly becoming a necessity to survive and prosper in the furniture business.
The selection of the best off-shore location requires a constant re-assessment of the business environment and cost structure in foreign countries. Mexico used to be the country of choice some 10 years ago, but it lost its competitive edge to Taiwan, and later to China and Vietnam. According to Wille, forward looking entrepreneurs continue to search for more advantageous locations and it may very well be that Bangladesh – with its huge but still untapped potential – will become a furniture supplier to the North American market. The early detection of emerging off-shore locations and the timely striking of collaborative ventures with local suppliers will give manufacturers a crucial competitive advantage against other companies lacking this strategic vision, Wille says.
The AKTRIN Furniture Information Center – on behalf of the Local Enterprise Investment Centre (LEIC) of Bangladesh – will bring five top Bangladeshi furniture companies to Canada with the objective of exploring production out-sourcing opportunities and other forms of long-term joint ventures with Canadian furniture manufacturers.
LEIC is funded by the Canadian Government through the Canadian International Development Agency (CIDA). Bangladeshi companies contemplating entering into collaborative ventures with Canadian furniture companies will qualify for financial assistance for pre-investment feasibility studies. This enables Canadian furniture companies to evaluate the conditions in Bangladesh as well as the capabilities and requirements of their potential partner companies. This will help to reduce the business risk associated with any foreign venture. To meet the specific needs of the Canadian companies, LEIC will also provide assistance at the implementation phase by transferring required technologies to Bangladesh, assisting with process improvements, training the local staff, getting quality certificates, complying with environmental and CSR regulations and more.
The Bangladeshi economy is developing at a fast pace and the government has declared the furniture industry as a “Thrust Sector”. Bangladesh has been named by Goldman Sachs as a country with a promising outlook for foreign direct investments and future growth. Profits, invested capital, dividends, royalties, and management fees can be freely and fully repatriated.
On November 12, 2007 (09:00 am) the Bangladeshi High Commissioner in Canada will open a seminar at the Four Points Sheraton Hotel in Toronto (1926 Lakeshore Blvd. West). During this seminar, an overview of the Bangladesh furniture sector and related business opportunities will be presented. For details about the seminar, contact Mr. Mohammed Hossain, Vice Chairman of the Canada Bangladesh Business Council at 416-833-5206 or email@example.com
Bangladesh enjoys several benefits afforded to developing nations. Its’ exports have duty-free and quota-free access to countries in Europe and North America. These benefits are not granted to the same extent to most of Bangladesh’s Asian competitors.
Wille explains that Human Resource costs in furniture manufacturing constitute over 50% of total production costs and Bangladesh offers a substantial advantage in this labor-intensive sector. Wage rates are well below those in China, Malaysia, Thailand, India, South-Korea, Philippines, Indonesia, and Vietnam. Labor is available in abundance and is very skilled in hand-carving. Workers are easily trainable. In addition to labor costs, utility costs are also most affordable.
Bangladesh remains a developing nation. The furniture industry is still lacking innovative designs and international marketing skills. As a development project by CIDA, Canadian companies that are contributing to the knowledge transfer to Bangladesh will benefit from substantial financial assistance.
The AKTRIN Furniture Information Center has pre-selected several Canadian furniture manufacturers in Ontario and Quebec that appear to be suitable candidates for off-shore furniture production in Bangladesh. Between November 12 and 23, 2007 the Bangladeshi delegation will visit these companies for exploratory meetings and factory visits. In the meeting the Bangladeshi guest will be able to explain the strengths and weaknesses of their companies and how a long-term partnership could benefit the Canadian furniture industry. AKTRIN is still searching for a few additional Canadian companies, interested in meeting the Bangladeshi delegation. More information can be obtained from Stefan Wille at 905-845-3474 or firstname.lastname@example.org