Furniture Business in Sme Sector

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FURNITURE BUSINESS IN

SME SECTOR 

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GROUP MEMBERS

 ISHRAT JAHAN ID-26

 MD. ABU JUBAIR ID-38

 FARHAN HABIB ID-41

 FARHA SULTANA ID-79

 RUKSHANA IRIN ID-100

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PRESENTATION OUTLINE

1. HISTORY OF FURNITURE SECTOR

2. CURRENT SCENARIO OF SME SME

FURNITURE SECTOR

3. PROCESSING & FUNCTIONING

4. MARKETING PROCESS

5. FINDINGS BY KATALYST 

6. PROBLEMS AND PROSPECTS

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OVERVIEW OF FURNITURE SECTOR

�The Bangladesh furniture industry is one of the mostpromising growth sectors with high export potential.

�The industry constitutes about 41,560 enterprises, which

employ around 1.8 lakh people unskilled and semi-skilled.

�There are 121 clusters of furniture companies across thecountry 93 micro and small, 17 medium and 11 large. Thebigger clusters are mostly located in Dhaka and Chittagong.

�According to a household income and Expendituresurvey, the domestic consumption growth rate isaround 20% and export markets are almost entirelyuntapped.

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Contd..

�Currently dominated by thousands of smallworkshops, the furniture sector is in a transition phasetowards industrialization.

�Simultaneously there are approximately 40,000

furniture SME s all over the country, employing around180,000 people.

�Turnover is in excess of BDT 100billion (GBP 1billion).

�There is a small but growing segment of larger firms

who are gradually entering the export market.

�The sectors contribution to the gross domesticproduct is 0.29 percent on an average, according toKatalyst.

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MDF (Medium-Density

Fiberboard)REPLACING

WOOD

CURRENT SCENARIO

RAW-MATERIALS AREIMPORTED FROM OTHER

COUNTRIES

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 THE SECTOR IS GROWINGRAPIDLY

MANY ENTERPRISES ARETRYING TO ENTER INTO

FOREIGN MARKET

 THE SECTOR IS

EMERGING AS ANINDUSTRY FROM SME

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Initially TK. 70,00,000-80,00,000 or 100,00,000 isrequired to start business.

Capital

Sole proprietorship orpartnership

Nature ofbusinessNature ofbusiness

Situated near theshowrooms.

WarehousesWarehouses

Showrooms No. of showrooms are 1/2 in thecity.

FURNITURE SME s

� Contract base workers.� 100-150 employees.

Workers

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PROCESSING & FUNCTIONING

MDF(Medium-Density

Fiberboard)

HARDWAREACCESSORIES

CHEMICAL-LACQUER

LAMI A EDOARD

MEHGO I,GORJO ,SEGU WOOD

FROMMALAYSIA

FROM CHI A

FROM I ALY

LOCAL

LOCAL

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0

0.2

0.4

0.6

0.8

1

1.2

Wood

MDF

DEMAND FOR RAW-MATERIALS

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COST OF PRODUCTION

MDF

Raw-material 10,000

Labor 10,000Other Cost 2,727

Total cost = 22,727

Profit (10%) = 2,273

Selling Price = 25,000

WOODRaw-material 20,000Labor 10,000Other Cost 2,000

Total cost = 32,000

Profit (25%) = 8,000

Selling Price = 40,000

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TARGET CUSTOMERS

CUSTOMERS

Higher Class50%

Upper MiddleClass 33%

Middle Class16%

Lower MiddleClass 01%

Lower Class 0%

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MARKETING

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Problems of Furniture Marketing

in Bangladesh