US hardwood producers see improvements in Cebu

THE Philippine furniture export sector has yet to recover from the softening of its biggest market, the United States, but American hardwood producers see recent improvements in the industry, particularly in Cebu.

Members of the Cebu Furniture Industries Foundation Inc. (CFIF) that produce wooden furniture import hardwood from the US, among other countries, because of their buyers’ requirements. But their purchase volumes have dropped drastically following the recession in the US, the biggest market of Cebu-made export furniture and furnishings.

One company owner, who asked not to be named in this story, said they used to import 20 to 25 40-footer cargo containers of US hardwood. But after the recession, they now import only four to five 40-footer cargo containers.

“The Philippines is a difficult market at the moment,” Michael Snow, executive director of the American Hardwood Export Council (AHEC), said during the AHEC 19th Southeast Asia and Greater China Convention from June 25 to 26, 2014.

“But we see opportunities, especially in Cebu. We want to do more in Cebu,” he said in a press conference during the convention.

Tom Inman, president of the Appalachian Hardwood Manufacturers Inc., said there are improvements in the US that offer opportunities to Philippine furniture manufacturers.

He said the interest rates in the US remain low, which encourages borrowing and spending on the home market. There is also a growing trend in home improvements, he added.

“We expect these (improvements) to continue,” he said.

He said most of the growth in the sector can be seen in flooring, home furniture and cabinets, which are associated mainly with home improvements.

Sustainably sourced

There are five regions in the US that export hardwood. One of them is the Appalachian Region, which covers the state of New York, Pennsylvania, Maryland, West Virginia and Virginia.

Some CFIF member-companies said they import hardwood from the US to comply with requirements of their buyers.

US hardwood are certified as legally and sustainably sourced in compliance with timber and wood product regulations, not only in the United States, but also in the European Union and Japan.

According to the National Statistics Office, Japan is the Philippines’ top export trading partner in the first semester of 2013. More than 28 percent of Japan’s imports from the Philippines were woodcraft and furniture, valued at US$1.4 billion.

But a CFIF member-company that responded to a Sun.Star Cebu survey said its US hardwood imports can no longer fill a cargo container so it cannot maximize shipping costs.

Mark Barford, US National Hardwood Lumber Association executive director, told Sun.Star Cebu that Philippine companies can pool their imports into one container.

“They can also follow a practice in China where one company imports hardwood in bulk and then distributes these to local (Chinese) saw mills and other manufacturers,” he said.

He said becoming familiar with NHLA lumber grading can save Philippine companies a lot.

Right grade

US hardwood lumber is priced according to its grade, which is based on cut and quality. Long and clear cuttings are priced higher than common-grade lumber.

Long and clear cuttings are suited for high-quality visible furniture parts, like a table top. A 2A common grade, also known as economy grade, are suitable for various furniture parts and flooring.

“Getting the right lumber grade also prevents wastage from cutting,” Barford said.

He said Philippine companies can consult the NHLA and even US hardwood exporters about lumber grading.

In 2009, AHEC and NHLA conducted a seminar on lumber grading for CFIF members.

CFIF member-companies that responded to the survey said they also import hardwood from Europe. They usually buy hard wood species like oak (red/white), maple, walnut and cherry.

One company said it imports medium-density fiberboard from Malaysia, China and Australia, and plywood from China and Singapore.

Many Philippine export furniture makers import wood and wood products to be sure about quality and environmental compliance.
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