Contents

Labor.......................................................................................................................... 1
Skilled labor............................................................................................................. 2
Availability............................................................................................................ 2
Quality.................................................................................................................. 2
Price..................................................................................................................... 2
Training and Human Resource.................................................................................... 2
Human Resource..................................................................................................... 3
How technology advanced is the industry..................................................................3
Technology levels.................................................................................................... 3
Discussion on technology categories......................................................................4
Local/imported technology...................................................................................... 4
Availability............................................................................................................ 4
Quality.................................................................................................................. 4
Strategic Goals and expansion................................................................................... 4
Type of competition amongst local businesses...........................................................5
Threat of new entrants............................................................................................... 5

Firm Strategy, Structure and

Rivalry
Labor
Skilled and experienced carpenters are necessary for the unit. Staff having
experience in craftsmanship, carving, polishing, etc. should be preferred.
In Pakistan, the wooden furniture industry can be categorized into small scale and
cottage. These units unfortunately use obsolete machinery, inadequate tools and
manual labor for manufacturing wooden furniture. This means high costs and poor
output.
(http://tribune.com.pk/story/19304/prospects-and-fears-for-pakistans-furnitureindustry/)
Pakistan has been gifted with valuable craftsmanship e.g. Carved Sheesham tables
are the specialty of the craftsman of Chiniot (Punjab).

The workers are usually unaware of the procedural standards and quality control
requirements of the international market.
Wood seasoning facility center is available in Pakistan.
The labor required for manufacturing process is easily available on daily wages, per
unit basis and permanently employed.
The wood carvers skills are predominantly visible in furniture making, apart from
carving wooden ceilings, wooden panels, doors and windows.
(https://thiscostblood.wordpress.com/tag/furniture-sector-of-pakistan/)

Skilled labor
Availability
The exporters of Chiniot, Gujrat and Peshawar say that skilled labour is easily
available in their areas. But according to the exporters of Rawalpindi, Gujranwala,
Karachi and Lahore, there is a scarcity of skilled labour in their localities.

Quality
The quality of labour is good, but it only has the skills passed on generation after
generation. There is no formal training facility available. Labour is not aware of
production techniques, world requirements and ways to improve efficiency, etc.
They are not trained to use the latest machinery. However, there are (a handful of)
people who can produce good quality furniture by following model pictures without
any formal training. Quality controls, checks and standardisation according to
international requirements need to be introduced. Also, there is no International
Trade Centre 23 concept of training the workforce how to improve their efficiency.
Skill development centres should be set up in all regions of the country to counter
the situation.

Price
According to the exporters of Chiniot, Gujrat and Peshawar, labour rates are
reasonable. While in Rawalpindi, Gujranwala, Karachi and Lahore, the rates are high.

Training and Human Resource

Training
PFCs CEO, Ashfaq said the main issue is the dearth of middle management and
nearly no institutions to train carpenters who are working in family oriented setups
in different clusters .
Couple of government owned institutions are providing training to such
carpenters, however, they are not up to global standards , he said.
PFC collaborated with some Italian companies to train staff, who passed on their
experiences to local carpenters. Additionally, the PFC is currently working on
bringing a few Italian furniture experts to Pakistan and negotiations with nearly 10

local furniture associations have been a success, Ashfaq added.

Furniture and interior decorators are in ample demand in Pakistan and different
clusters of artisans, including those operating in Gujarat, Lahore, Chiniot,
Sargodha, Peshawar and Karachi, are famous for providing handmade solid and
classic furniture lines.
However, majority of the carpenters are not aware of the innovations that have
been made over the years and how these latest tools can add much needed value
to their products.
(http://tribune.com.pk/story/1055693/institutions-needed-to-help-furnituresector/)-2014
FIEDMC management will also build a skill development center in the furniture
city in an attempt to train artisans in coming up with good and attractive designs.
In Pakistan too, best-quality wood is produced that can be utilized to manufacture
furniture.
(http://tribune.com.pk/story/724213/furniture-city-on-the-cards-to-promoteindustry-exports/ )

Human Resource
Even if labour force is adequate in numbers, lack of technical capabilities can hinder
competitiveness. Public support to vocational training for workers in factories is
recommendable, in order to reduce direct training expenses of enterprises, and to
allow managers to professionally grow with their businesses.
Absence of common support services. The sector is largely devoid of cost-efficient
provision of common support service (tool maintenance, training, etc.). Everything
is done at furniture workshop level. This leads to losses in skilled furniture makers
productivity and sub-optimal allocation of scarce human resources. Air-drying of
wood is still the norm, and no business model is developed yet to use contract-kiln
operators.

How technology advanced is the industry

Technology levels
There are a number of different levels of mechanization that can be identified in the
furniture market of Pakistan. In fact, the Pakistani furniture makers could be
benchmarked against the following categorization of technology levels put into use
by furniture makers on average in the world. This has been developed by UNIDO,
and represented in ITTO-ITCs publication Tropical Timber Products: Development of
Further Processing in ITTO Producer Countries (2000).
Box 2.1 Technology levels in furniture industries of the developing
countries
Facilities that use basic portable tools and universal woodworking machines

 Facilities that use basic woodworking machines (band saw, planer, thicknesser,
spindle moulder, boring machine etc.) to produce in small batches
Facilities same as in 2, but producing larger batches, using low-cost mechanization
and jigs suitable for serial production whenever possible
Facilities that use special purpose machines (4-side moulders, copying lathes,
edge benders, CNC moulders etc.)
Facilities with integrated machining lines (linked machines used for production of
panel furniture, doors, surface finishing, robots used for painting, integrated lines).
Source: ITTO-ITC (b), 2002.
A jig is a self-constructed modelling appliance that facilitates production, lowers
labor costs and improves product quality. The use of jigs enables the production of
interchangeable parts and avoids manual adaptations in the assembly of the final
product. Machining and assembly jigs are commonly used in furniture factories.

Discussion on technology categories

Categories 1 and 2 typify the technological status of furniture processing in a
large number of producer countries, consisting of a great number of micro
enterprises, usually employing 20 to 50 persons.
Category 3 is the first one to which the term industrial production can really be
applied. They use jigs, higher quality machines, low-cost mechanization and wellmaintained, simple machines. It is possible to produce interchangeable components
at this level. Production units are in a position to enter export markets. Products
tend to be standardized, and a series of up to 500 components may be put into
production. This is the category of firms that would be the most receptive to
technical assistance by ITC or by other international organizations. Many enterprises
in this group are preparing to take the crucial step from supplying only the domestic
market to engaging in exports. In addition, there are particularly good opportunities
for network development among these types of companies.
It is still comparatively rare to find companies that have reached Categories 4 and
5 in terms of technological advancement.

Local/imported technology
Availability
Mostly traditional methods are used in the production process of furniture. Local
machinery is used by most of the exporters because it is easily available. Imported
technology is available too but with an added cost. In the long run, expensive
imported machinery would tend to be cheaper as its results would produce much
better outputs and savings.

Quality
Exporters are satisfied with the use of local technology. However, they would prefer
using imported technology, but due to scarce resources, they end up using

traditional methods. A general perception exporters have of imported machinery is

that it is second hand.
The prices of local machinery are reasonable in comparison with imported
machinerys. But for small exporters, even the prices of local machinery are high.
The financial incentive provided by banks is not very easy for exporters to make use
of. The available local machinery is of very basic nature. In other words, no
professional machinery is available due to lack of resources/finances. In the given
situation, affording exporters should visit machinery shows.
(http://www.tradecapacitypakistan.com/new/pdf/itc/SS1.pdf)

Strategic Goals and expansion

While some of the wealthier furniture manufacturers from the city have expanded
their business to different cities and set up display centres in Lahore and Islamabad,
etc, several others are producing furniture for local brands with showrooms across
the country.
(http://www.dawn.com/news/1200844)

Type of competition amongst local businesses

For the premium furniture manufacturers, competing with hundreds of low price and
low end furniture manufacturers is not based on price. The competition is based on
classical designs and outstanding quality of its furniture to acquire and keep loyal
customers.
Carpenters charge fairly low prices for manufacturing primarily low quality
customized products; however, they cannot offer consistent quality and scale.
The importers sell both high end and low end furniture without a warranty or after
sales service for their products.
(Principles of Marketing, Phillip Kotler)

Firms constantly position and re-position themselves to gain competitive

advantage in the marketplace.
They typically compete on price or with new products and services, but
companies also increasingly differentiate themselves through sustainability
performance.
For some companies, sustainability has become central to their rivalry and
not just for building brand equity.
The forces of competitive strategy are changing, and sustainability is a driver
for many of these changes. Firms, analysts, and investors can no longer
afford to ignore the link between sustainability performance and the
competitive landscape of the market.
Major brands in the market such as IKEA or Habitt has been able to attract

customers to buy the same product for higher price due to having strong
customer brand loyalty.
(https://thiscostblood.wordpress.com/tag/furniture-sector-of-pakistan/)

Threat of new entrants

Threat of new entrants is very low in the furniture sector because of the following
main reasons:
1. There is a high initial investment needed to set up the manufacturing plant.
2. Access to capital is not favorable.
3. Lack of skilled artisans because of less training centers is another problem
that the industry faces.
4. The dearth of availability of raw material is another factor.