Boosting Performance of Furniture and Handicraft, Ministry of Industry and HIMKI Set Up Strategy


The Ministry of Industry and the entrepreneurs are developing a plan of action in an effort to boost the performance of the national industry of furniture and handicraft in term of growth and competitiveness. This industry is one of the sectors being prioritized in its development due to its labor-intensive and export-oriented.

“We will simplify the SVLK (Indonesia Timber Legality Assurance System) and lower the cost. Later, we will discuss with the banks how to increase the performance of the furniture and handicraft industry, such as through the program of KUR (credit for people’s business), bank financing, export financing institutions and regional development banks,” said Industry Minister Airlangga Hartarto to the reporters after meeting with the management of Indonesian Association of Furniture and handicraft Industry (HIMKI) in Jakarta, on Wednesday (4/5).

During the meeting, the minister was accompanied by Director General of Small and Medium Enterprises (SMEs) Gati Wibawaningsih and at attendance among others were HIMKI Chairman Soenoto, HIMKI Vice Chairman for Organization and Inter-Agency Relations Abdul Sobur, and HIMKI Secretary General Basuki Kurniawan.

According to the minister, the Industry Ministry would facilitate the establishment of raw material centers to supply the needs of furniture and handicraft industry in production. “Regarding to the raw material centers, a meeting will be scheduled with PT Perusahaan Perdagangan Indonesia (PPI) and PT Sarinah,” he said. The both state-owned companies are expected to support the small and medium enterprises including in promotion.

Another factor no less important is increasing the competence of human resources, in this case the artisans by preparing related vocational education. “We will arrange the vocational education program, not just for the long time period, but also a short program such as training for one to three months,” said Airlangga. In addition, the Ministry of Industry will inaugurate a polytechnic special for the development of furniture in Semarang, Central Java.

The minister also said that his ministry would coordinate with the Ministry of Environment and Forestry to find solutions to the problem of taking the raw materials of planted by people. There is a policy ruling that the trees planted by people must be on a certified land.

“It could be an obstacle. Therefore we will resolve it. Moreover, the Falcata timbers are currently in very good condition. Such a regulation will inflict the people’s economy,” he said.

Airlangga also urged the players of furniture and handicraft industry to continue the creative and innovate to improve the value-added of the products and to meet the tastes of today’s market. “In 2017, we are targeting the export value would reach US$ 2 billion. We are committed to create conducive business climate,” he said,

Meanwhile Soenoto said that he was optimistic that the export target of US$5 billion would be achieved in 2019. To that end, he appreciated the Ministry of Industry for its swift response in the efforts to solve the problems faced by the furniture and handicraft industry in the country. “The Ministry of Industry has become a partner as well as a counselor. The steps would be arranged to be run in synergy, including with the other relevant ministries,” he said.

Soenoto also called for the coordination meetings with various agencies to be held continuously to find the right solution for any problem. “Starting next week, it is expected to begin a coordination meeting to focus on discussing the problems one by one, for example about the right SVLK mechanism. Then the issue of raw materials up to domestic market. For example, coordinating with the Ministry of Education to supply the schools with bench made of rattan,” he explained.

Improving Quality

On the same occasion, Gati said that various strategies had been carried out in efforts to improve the quality of products and artisans of SMEs running furniture and handicraft business. In the last five years, the development of entrepreneurship was only done in 15 locations and the development of centers in 19 locations across Indonesia.

“A total of 14 SMEs have received restructuring aid in the form of rebates between 35-45 percent of the purchase of machinery with a total value of Rp1.8miliar, while the optimization of UPT (Technical Service Units) continues to be done in efforts to stimulate the development of furniture SMEs,” she added.

In addition, the Ministry of Industry also supports the marketing of the products of furniture and handicraft SMEs. In the last five years, 32 SMEs have been facilitated to participate in exhibitions abroad such as in Germany, China and the United States. Meanwhile, 39 SMEs have participated in the exhibitions in the country. This effort aims to boost exports and enhances the possibility of buyers and consumers in holding a direct business meeting.

Regarding SVLK, according to Gati, the policy is expected to be re-evaluated so it won’t hamper the development of the furniture and handicraft industry especially the SMEs. “Therefore, the Ministry of Industry will propose several points, including lower the cost for SVLK and simplify the documents required,” she said.

In addition, continued Gati, SVLK should not be applied in the downstream sector because when the raw material is legal then its derivative products must be legal too. It is also to prevent overlapping SVLK. “This year, we will facilitate the SVLK certification to 20 SMEs,” she said.

In 2017, the Ministry of Industry has developed activities in the development of furniture SME centers in Solo Raya, Ngada NTT, and in the border of West Kalimantan like Sambas and Bengkayang. The activities are in the form of training and facilitation of wood processing machine.

Another activity is the exhibition of IFEX JIFFINA in Jakarta and Yogyakarta, participated in by 19 SMEs in Jepara, Solo and Yogyakarta held in March 2017. “We will also carry out cross-stakeholder workshop in Central Java to support the exports and expand the domestic market,” she added.

The Ministry of Industry also supported the establishment of Furniture and Handicraft Industry Cooperatives in Solo Raya (KIMKAS) consisting of SMEs running the business of furniture for export and for supplying the domestic market mainly to meet the needs of schools and government institutions. Based on the record in 2015, there were 130 thousand units of furniture SMEs with the employment number more than 436 thousand people and an investment of Rp5.8 trillion.