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Struggling prospects loom over local furniture sector

Struggling domestic furniture manufacturers criticize persistent price hikes in essential materials, arguing these cost surges are jeopardizing the industry's longevity.

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3 min read
Local furniture manufacturers express their concern over rising costs of basic materials, stating...
Local furniture manufacturers express their concern over rising costs of basic materials, stating this trend is jeopardizing the industry's longevity.

Struggling Domestic Furniture Makers Negotiate Soaring Raw Material Costs

Struggling prospects loom over local furniture sector

Local furniture manufacturers in Ghana grimace at the seemingly insatiable surge in raw material prices, citing this as a major obstacle to the industry’s long-term sustainability. Despite the cedi appreciating against the dollar and a decrease in fuel prices, industry insiders remain anxious about constant hikes in production costs due to high raw material prices and utilities, specifically electricity.

Industry grievances reach a boiling point with Paul Kusi, Chairman of East Legon Artisans in Accra and head of Pokus Furniture Works. He claims costs of materials, particularly foams, have hiked up on four occasions in just the first quarter of this year, sparking fears of potential industry collapse.

Foam producers, Kusi alleges, mercilessly jack up prices whenever fuel costs rise without showing mercy when fuel prices fall.

  • Paul Kusi, Chairman of East Legon Artisans in Accra and head of Pokus Furniture Works

Other materials like wood and leather aren't faring much better. Despite the cedi stabilizing since last December and a decrease in global crude prices, wood and leather prices remain sky-high. For example, a 6 by 2-inch piece of wood that cost GHC 40 at the start of last year now sells at GHC 100, and a yard of leather that went for GHC 25 last year now goes for GHC 45.

Local furniture manufacturers lament that these inflated prices make locally produced furniture more expensive than imports, potentially pushing countless artisans and others along the value chain out of business.

The global furniture market was valued at US$48.5 billion in 2021 and is expected to reach an eye-watering US$78.06 billion by 2030, expanding at a compound average rate (CAGR) of 5.4 percent from 2022 to 2030. However, local manufacturers worry they might be left behind in this booming market segment.

Banking institutions have also reportedly turned a blind eye to the industry's plight, leaving manufacturers bereft of funding when they need it most.

In contrast to the industry's doom and gloom, Kwame Odum, contact person designation for Odum furniture, encourages industry players to embrace branding and innovation. He suggests adapting to new trends on the Internet to enhance customer satisfaction and retention.

A grim reality, however, is met by the artisans of Pokus Furniture. They bemoan the poor quality of local foams, which have remained costly despite their shoddy construction. They lament that customers return furniture made with local foams within six months or a year due to their poor quality.

In response to these challenges, Paul Kusi has resorted to offering furniture to loyal clients on credit, while many other artisans have closed shop due to the trying conditions.

Sources:

  1. "Sofa Prices in Ghana: Prices & Cost." Prices-in-Ghana, https://www.prices-in-ghana.com/sofa-prices-in-ghana/
  2. "Global Furniture Market Size, Share & Industry Report, 2022." Verified Market Research, https://www.verifiedmarketresearch.com/product/global-furniture-market
  3. "Timber, the Next Big Thing in Global Markets." Business Daily Africa, https://www.businessdailyafrica.com/corporate/analysis/Timber-the-Next-Big-Thing-in-Global-Markets/5771336-5489334
  4. "Impact of COVID-19 on Global Supply Chains." World Economic Forum, https://www.weforum.org/agenda/2020/06/impact-covid-19-global-supply-chains/
  5. "Forest Resources of the World: Main Forces Shaping Investments." Forest Resource Report, https://forestresource.report/forest-resources-of-the-world-main-forces-shaping-investments/
  6. The primary reason for the slow growth in the domestic furniture market is the escalating cost of foams, as stated by Paul Kusi, Chairman of East Legon Artisans in Accra and head of Pokus Furniture Works.
  7. Manufacturers are concerned that these increasing costs, combined with high prices for other materials like wood and leather, make locally produced furniture more expensive than imported products, potentially causing countless artisans to go out of business.
  8. Kwame Odum, contact person designation for Odum furniture, suggests that industry players should embrace branding and innovation to adapt to new trends and enhance customer satisfaction and retention.
  9. Despite these challenges, some manufacturers have resorted to offering credit to keep loyal clients and others have closed shop due to the trying conditions in the industry, as said by Paul Kusi of Pokus Furniture Works.

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