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Furniture makers still wary of prospects

CEBU CITY -- Some furniture factories here have started humming again, but exporters have remained wary, adopting a conservative outlook for 2010.
Angela Figueroa-Paulin, president of the Cebu Furniture Industries Foundation, Inc. (CFIF), said furniture factories might simply be stocking up for next year after their inventory, which had been kept to a minimum due to the global economic crisis, was depleted.
"Right now, there are activities. Some factories are busy. But we don¡¯t know if this is a positive sign," Ms. Paulin said.
She added, however, that the furniture sector has bottomed out.
The industry contracted by 30%-40% in Cebu in terms of the number of establishments and work force, said CFIF consultant Ruby Babao-Salutan.
Export figures in the first quarter, normally a good time in terms of sales, dropped to $12.9 million, just a third of the yearago level of $37.8 million. Revenues for the entire year were expected to decline by more than 50% from the $400 million recorded in 2008.
Only 120 active members remain with the CFIF. Sixty others have either closed shop or temporarily shut down since the housing bubble burst in the US. More than 70% of Cebu¡¯s furniture exports go to the US.
"The worst has happened. But I don¡¯t want to say we¡¯re out of it," Ms. Paulin said.
The survivors coped with cancelled purchase orders, delayed payments and unpaid accounts by adopting three-day work-weeks, tapping new markets and capitalizing on their design edge.
Some companies have turned to the domestic market, supplying the requirements of new hotels and condominium buildings, but Ms. Paulin said this was not enough to absorb the volume produced by the exporters.
Whether the sector would recover in 2010 remains to be seen. If it does, Ms. Paulin said the indicators would not be the same as pre-crisis levels.
"I don¡¯t think anybody can look to the end of next year. Everything -- the business, the clients -- has changed. We just have to be ready," she added.
Furniture exporters in Cebu are banking on their edge in design and craftsmanship to maintain a niche in the highly competitive global market.
Last October, Cebu-based manufacturer Obra Cebuana received the Katha Award for Best Home Furnishing for its yellow low-back chair made of rattan during the 50th Manila FAME International show.
The Katha Awards, which are given to exhibitors at the Manila FAME, recognize Filipino creativity and craftsmanship.
Winning products are judged by the creativity of their design, innovation, as well as form and function.