By Chuang Peck Ming

Old and low-technology they may be, but Singapore's furniture makers have been doing a brisk export business. They have been shipping, on average, 15 per cent more of their products to world markets every year - nearly twice the global growth rate of 6-8 per cent yearly.

Total export of furniture shipped from Singapore-owned furniture plants hit $2.4 billion in 2007, according to International Enterprise Singapore, the government's trade promotion arm.

IE Singapore says that Singapore-made furniture are sought after in Europe, one of the world's largest furniture market. The continent was Singapore's second biggest trading partner last year, with the two chalking up $97.5 billion in trade.

Among Singapore's top trading partners within the European Union were Germany, the United Kingdom and France. Singapore's trade with Germany came to $21.2 billion in 2007, the UK $19.5 billion and France $16 billion.

The enlargement of the EU has opened fresh opportunities for Singapore furniture producers, according to IE Singapore. 'Many European buyers who previously sourced from Eastern European countries have started looking for alternative source of supply,' says Tan Soon Kim, IE Singapore's deputy director, Corporate Group, Lifestyle Division.

'Singapore furniture companies, in particular, have a good track record in Europe and are well poised to extend their presence into the market by offering good quality furniture for the middle-high market,' he says.

Singapore has already made a strong name for producing innovative, well-designed and high quality furniture, according to Mr Tan. He says that furniture makers here can leverage on Singapore's 'brand' name, which is synonymous with reliability and credibility.

'As an industry, Singapore companies have diversified manufacturing sources, which is attractive to buyers looking to diversify manufacturing risks,' Mr Tan says. 'Furthermore, designs from younger Singapore furniture companies provide a cosmopolitan feel and is more readily accepted in international markets such as Europe.'

The current slowdown in the global economy may hit Singapore furniture producers, as they face weaker demand in established markets such as the UK. At the same time, their costs are driven up by escalating prices of raw materials.

Expanding into new markets in Eastern Europe also will be tough because there are new cultures and the language barrier to overcome, according to Mr Tan.

To meet these challenges, he suggests Singapore companies come up with new concepts and focus on specific market segments.

'Innovative ideas and targeting niche markets is one way in which our furniture companies are able to generate interest and increase their value proposition to potential buyers,' Mr Tan says.

As an example, he singles out local furniture manufacturer Koda which has created a range of products out of bamboo.

'Using eco-friendly manufacturing process, this bamboo range of furniture does not take on the ethnic look of bamboo unless inspected closely, allowing for versatility in design,' Mr Tan says.

Bamboo also has an edge over wood because converting bamboo into furniture saves more energy, he notes. Drying bamboo, for instance, takes eight to 12 hours in a kiln, while wood takes up to six weeks.

'Koda's bamboo collection complies with European emission standards and water-based solvents are used,' Mr Tan says.

This article was first published in The Business Times on September 11, 2008.