Development of the Indonesian Rattan Furniture Processing Industry

To improve the competitiveness of the national rattan processing industry can be seen from the development of the rattan industry as follows:

 

Potential Rattan Raw Materials

Indonesia is the largest rattan producing country in the world, an estimated 80% of the raw material of rattan worldwide is produced by Indonesia, the rest is produced by other countries such as the Philippines, Vietnam, and other Asian countries.





Rattan-producing regions are Kalimantan Island, Sumatra Island, Sulawesi Island and Papua Island with the potential of Indonesia rattan around 622,000 tons / Year

 

Development of the Rattan Processing Industry (2003-2006)

In the 2003 – 2006 period, the capacity of the national rattan processing industry only experienced an average growth of 0.38% per year or only increased from 545,405 tons/year to 551,585 tons/year and the realization of production decreased from 381,784 tons in 2003, to 372,761 tons in 2006 or experiencing growth by an average – 0.79% per year.

 

The export volume of processed rattan decreased from 193,078 tons in 2003 to 172,782 tons in 2006 or decreased by an average of – 3.63% per year, but on the other hand, the value increased from the US $ 359 million to the US $ 399 million or increased an average of 3.58% per year. This shows an increase in export sales prices per unit of processed rattan products.

 

Meanwhile for imports of processed rattan, although the volume and value are relatively small compared to the volume and value of exports, the growth is very rapid, so it needs to be watched for in the 2003-2006 period, imports of processed rattan increased from 788 tons (valued at the US $ 1.41 million )

increased to 2,709 tons (valued at the US $ 3.74 million) or the volume of imports experienced an average growth of 50.92% per year, while the value increased by an average of 38.43% per year.

 

The Rattan industry is mostly located in Cirebon and surrounding areas. In the period 2001-2004, the number of companies, production, exports and employment in the rattan processing industry sub-sector in Cirebon increased, where the number of companies increased from 923 business units to 1,060 business units,

production increased from 62,707 tons to 91,181 tons, exports increased from 32,871 tons (worth the US $ 101.67 million) to 51,544 tons (worth the US $ 116,572 million) and employment increased from 51,432 people to 61,140 people.

 

However, since 2005, both production, exports, and employment in the rattan processing industry sub-sector in Cirebon have decreased significantly. And the decline continued in 2006.





In 2007, a number of rattan furniture producers in Cirebon experienced a decline in production, including those that were originally able to export as many as 120 containers per month, currently only able to export 15-20 containers, some even no longer producing.

 

This is caused by the difficulty in obtaining quality rattan raw materials, but conversely, in competing countries, such raw materials are easier to obtain.

 

As a result, many small rattan entrepreneurs who initially as sub-contractors did not get jobs anymore, causing much unemployment. In addition, it also has an impact on the impediment of returning credit by the rattan processing industry to banks (aka bad loans).

 

If this is not resolved immediately, then it could be that the rattan processing industry will become worse off.





The decline in the rattan processing industry, both that occurred on a national scale and at the Cirebon industrial center since 2005, allegedly caused the issuance of the Decree of the Minister of Trade No. 12 / M-DAG / PER / 6/2005 concerning Rattan Export Provisions,

which allows the export of raw rattan and semi-finished rattan (coupled with the illegal flow of rattan raw materials abroad), making it difficult for domestic rattan processing industries to obtain the raw material.

On the other hand, the rattan processing industry in competing countries, especially China and Taiwan is growing rapidly again, thereby seizing market share and export market potential of rattan products from Indonesia.

 

On the other hand, the export of Chinese rattan products which in 2002 was still in balance with Indonesia at the US $ 340,000, in 2006 had increased 4-fold, while Indonesia as a producer of rattan raw material exports of rattan products decreased.

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