Our furniture industry needs a seat at the table: Hatil MD

Bangladesh's furniture industry has seen rapid growth in recent decades. 

Case in point, in a Tk25,000 crore market, the industry has over 25 lakh workers currently employed and the industry now enjoys an annual growth of 18-20 percent, according to recent reports. 

Bangladeshi furniture is now being exported to foreign markets as well, and thriving. For instance, there has been a 267 percent rise in the last decade, jumping from Tk180 crore to Tk665 crore in fiscal year 2018-19, according to the Export Promotion Bureau.

The industry has over 80,000 entrepreneurs. However, the market is still dominated by unbranded furniture and local carpenters that account for 65 percent of all the products sold.

But Selim H. Rahman, chairman of the Bangladesh Furniture Industries Owners Association (BFIOA) and the Managing Director of Hatil told the Business Standard that the market will eventually lean towards the brands. 

"Branding signals quality, service, warranty and credibility. When you buy a furniture piece from a brand, you get all that, especially credibility. That is why conscious buyers always go for branded furniture as they realise it is an investment," said Rahman. 

Hatil is one of the country's leading furniture brands. Not only in Bangladesh, but the company also has franchises in India, Nepal, Bhutan and Canada.

In a conversation with The Business Standard, the veteran furniture tycoon talked about the various aspects of the burgeoning furniture industry. 

When did Hatil start? Tell us about the journey.

It was 1988. After finishing my graduation, I joined my father's timber and sawmill business at Farashganj in old Dhaka. Not as the son of the owner, but as an inexperienced worker. There I learnt from my father and other workers. 

What I noticed there is that customers bought pricey and high-quality wood from us, but they used to complain about the product their carpenters would make from the wood.

The quality of a product depends mostly on the seasoning and processing of the wood more than the quality of it. If you let a fine piece of Burma teak lay on the ground for a long time, no matter how marvellous that material is, the piece would rot and dampen eventually.

And that seasoning and processing depend on the skill of your carpenter.

"For the last 32 years, the company [Hatil] has been thriving in the local furniture market. It has already opened franchises in India, Canada, Bhutan and Nepal"                                         

-Selim H Rahman, Chairman of BFIOA and the Managing Director of Hatil

It was almost the end of 1988 when I thought of a one-stop solution space where customers would get a 360-degree solution for their woodworks- from raw materials, processed wood to ready-made products. And that is when I came up with HATIL- a name I got from my father's timber mill- Habibur Rahman and Anowara Begum Timber Industries Ltd. 

For the last 32 years, the company [Hatil] has been thriving in the local furniture market. It has already opened franchises in India, Canada, Bhutan and Nepal. 

Traditional furniture vs branded furniture - which one do you think Bangladeshi customers prefer more? 

I think with time, people will eventually prefer brand furniture more. Because when we talk about quality, it is not just about the wood. A piece of wood needs several steps of processing for the finished product's longevity and quality. For example, seasoning- it takes almost a year to season wood if you follow the traditional methods. But with modern machinery and industrial technology, wood is seasoned in 21 days in our factories.

Besides, in an industrial area, every piece is cut, maintaining a distinct thickness and accuracy. Internal joinery is kept precise in every piece we make. We consider the size, functionality, weather and climate, material, price range, ergonomic issues, etc.

Not everyone can afford branded furniture. And if they do, it is not something that people buy every day. Then how does this business sustain itself? What is the target customer group for branded furniture?

Furniture is not a luxury anymore here in Bangladesh.

Earlier and even now, we think teak is the best wood to choose for furniture. Although it is true to an extent, if well-seasoned and processed, furniture made from 'koroi' or even 'aam' (mango) wood will also last you for years. 

We need to change the perception because earlier when we did not have the technology, using the strongest wood made sense. But now with better machinery and technology, why not get creative?

If you look at the market, on average, our purchasing power has increased with the growing economy. And with changing social structures, we no longer think of a larger family where a piece of furniture will pass down to the successors as an heirloom piece. With the growing cosmopolitan culture, we think more about functionality and maintenance. That is why I think people will lean more towards brands for furniture.

There is another reason for this industry to expand more in the future. You see, as a brand when we do business, we have to pay taxes to the government. Besides VAT and other taxes, in the industry, we have to follow the compliance rules and environmental protocols, a local carpenter may not do any of that.

Apart from wood, what are the other raw materials needed in this industry? Where do you source these from?

For wood, we use FSC (Forest Stewardship Council) certified beech and red oak that we import from Germany and the United States. Apart from that, hardware (handle, lock and key, screw, latch etc), lacquer and most of these materials are imported from other countries. 

Hardware is imported from China and Malaysia, lacquer from Italy and Europe, fabric from India, China and Indonesia. 

We have to pay import taxes for all these - 16% for wood, 58% for hardware and 89% for lacquer spray. As we do not get incentives, we often struggle to reduce the price. 

What has been the government's policies regarding this market?

The government has already announced it to be an industry. But that is not enough. My 32 years of experience says that this industry has huge potential. The labour cost is low here in Bangladesh and we have a huge labour market. 

This is the factor that helped grow our RMG sector. I have 3,000 workers employed in Hatil's factory alone. There is a huge scope for employment here as well. If the government recognised its export potential, it could grow further. 

Amid the global concern regarding the environment and climate, do you think the wooden-furniture business is sustainable? 

If we talk about sustainability, the first thought that comes is –buy local. But Bangladesh already has limited forest areas.
So what do we do? That is why Hatil imports FSC (Forest Stewardship Council) certified wood from Germany and other countries. The number of greens we are using to make furniture, are we giving it back to nature? I do not think so.   

Again if you look at the traditional designs, you will find immense wastage of material and wood. Large ornamented headboards, intricate crafting - everything looks like wastage of wood, time and labour. 

Of course, custom-made traditional furniture pieces will always be precious and a lifetime investment, but it is mass production for mass people that we are talking about. As an industry, this sector requires precision, creativity and functionality. 

We opt for sleek, creative designs that are functional and convenient for users. The pieces can be packed in a box and then all you need to do is assemble the parts. 

And our forest department should have a research section that will come up with smart solutions for supplying raw materials. We tried to bring bamboo furniture to the market as well. 

Bangladesh has the perfect climate for growing bamboo. But the outer layer of our bamboo is thinner. If we could bring some bamboo species from China that have a thicker wall, we could use that. So there is a lot of scope for innovation here.

What is holding back the furniture industry the most?

Designers. Prominent architects and designers, around the world, pursue furniture designing as their career. But here in Bangladesh, this profession is still perceived as 'carpentering'. 

If we do not realise the importance of local creative designers, it will become a huge issue if we want to export our furniture. South Asian countries share the same kind of aesthetic taste. 

But beyond that, if we want our pieces to be bought by Western countries, we will need our own designers. But unfortunately, we have no such institution or even specialised courses to foster furniture designers.

RMG is the top export sector of Bangladesh. And as a result, we have so many home-grown brands, fashion designers that compete in the international arena. That should be the case for our furniture industry as well.