IN THIS
ISSUE
- SFIC’s Newly
Appointed Executive Committee for Year 2004/2006
- SFIC Appoints The International
Furniture Design Advisory Panel
- Furniture Design Award 2005:
Preliminary Results
- American Hardwood Export Council
(AHEC): Supporter of the Furniture Design Award by SFIC
- Robust Sales & Emerging
Design Trends at IFFS/AFS 2005
- Life Long Learning to remain
relevant: Programmes at the Furniture Learning Institute
- Vietnam – the Next Rising
Star of the Asian Furniture Industry?
- An Insight into the German Furniture
Industry
- Legal Column: Performance Bond
– Stop That Call!
- Understanding Patterns of Sales
Performance
- Party Throughout the Viva Vegas
Night…
SFIC’s
Newly Appointed Executive Committee for Year 2004/2006
Top (L-R): Elsen Ng, Kenny Koh, Simon Ong,
Neo Sia Meng, Bert Choong, Choo Yong Fee, Jimmy Tan,
Por Khay Ti, Ann Kang
Front (L-R): Alison Kwok, Jeffrey Yong,
Sim Kah Choon, Andrew Ng, James Koh, Jerry Tan,
James Goh, Tony Pang
SFIC members elected in the new
Executive Committee for 2004/2006 during the SFIC Annual
General Meeting on 24 September 2004. Mr. James Koh of Koda
Ltd was unanimously re-elected to the post of President
for a second term. He was the President of SFIC from 1991-1994
and 2002-2004.
Under Mr. Koh’s capable leadership over
the past two years, the Council made substantial and impactful
progress in developing and advancing the six strategic thrusts
under the Furniture Industry Capability Upgrading Programme
(ICAP). Various initiatives to help companies further extend
their global footprints and to champion design excellence
as a key driver of national competitiveness took off successfully.
In addition, the Furniture Learning Institute (FLI) was
launched early this year to provide essential and continuous
training to equip industry players with the up-to-date trade
know-how and to value-add to their skill sets. More importantly,
the Council also successfully garnered the support of various
statutory boards and government agencies for Singapore’s
proposed international Furniture Trade Centre (IFTC).
Despite the inroads that the Council has already
made towards securing Singapore’s growing status as
Asia’s regional furniture hub, we must continue to
be mindful of the ever increasing competitive landscape
and constantly examine ways to sustain our business edge.
At SFIC, we are confident that our newly elected Executive
Committee will work tirelessly to continue the steady momentum
of progress and development for the industry over the next
two years.
As Mr. James Koh aptly encapsulated in his
thank you speech at the Dinner and Dance, “The world
is constantly evolving with new threats and opportunities.
SFIC will continue to re-assess its strategies and thrusts,
to embrace new initiatives to further the cause of our industry
and those of our members. The future looks bright. The exponential
growth of the global furniture market has created a dynamic
business environment with many challenges. I am confident
that SFIC’s forward-looking vision, collective business
and industry acumen as well as willingness to take on new
challenges will lead to greater rewards for all our members
and industry players in the years ahead.”
SFIC Executive Committe
for Year 2004/2006
Back
to Top
SFIC
Appoints The International Furniture Design Advisory Panel
Ten distinguished personalities have been
appointed as members of the International Furniture Design
Advisory Panel of the SFIC to help catapult the Council’s
design initiatives to greater heights.
Chaired by Mr. Simon Ong of Kingsmen
Projects Pte Ltd, the Panel comprises of three international
and six local persons from the design community, namely:
- Mr. Christophe Pillet, Founder of Agence Christophe PILLET
(France)
- Mr. Lars Engman, Chief Designer of IKEA (Sweden)
- Mr. Philip Koomen, Founder of Philip Koomen Furniture
(UK)
- Mr. Carsten Ovesen, Managing Director of Carsten Ovesen
Design
- Mr. Tan Kwang Kai, Group General Manager of Futuristic
Image Builder Ltd
- Mr. Sonny Boey, Managing Director of The Home Merchant
Pte Ltd
- Ms Kelley Cheng, Editorial Director of Page One Publishing
Pte Ltd
- Mr. Philips Connor, Director (Design) of Space Partnership
Pte Ltd
- Mr. Andrew Pang, Product Developer of X-Tra Contract
Back
to Top
Furniture
Design Award 2005: Preliminary Results
Adhering to the theme “New Asia”,
furniture design pieces inspired by everyday items like
instant noodles, Japanese slippers and even the traditional
Chinese cheongsam are just an interesting sampling of entries
received for the Students and Young Designers Categories
of the Furniture Design Award (FDA) 2005.
In total, 351 entries were received from the
Students and Young Designers Categories this year. This
is an increase of 11 per cent compared to participation
in these two categories last year. In particular, entries
for the Students Category grew by 14 per cent to 278. They
were by various institutions such as La Salle SIA, Singapore
Polytechnic, Nanyang Polytechnic, Temasek Polytechnic, National
University of Singapore (NUS), Nanyang Academy of Fine Arts
(NAFA), Raffles LaSalle and Inspiration Design School.
The Young Designers Category, which extended
to the Asia Pacific region, also received a 3 per cent increase
in entries compared to last year. With some 73 entries coming
from countries like Australia, China, Indonesia, Malaysia,
Philippines, Singapore, Taiwan and Turkey, one can expect
nothing less than an electric mix of cross-cultural inspirations
from the competition.
The preliminary judging for the Students and
Young Designers categories was held on 11 October and the
semi-finals on 29 October. Twelve finalists (seven each
from the Students Category and five from the Young Designers
Category) had since been selected to produce prototypes
to vie for the top spot in the respective categories at
the grand finals in March 2005.
The entries were judged based on the following
criteria: “Conformity with Theme”, “Creativity
& Innovation”, “Form”, “Functions
& Ergonomics”, “Material”, “Marketability”,
and “Environmental Friendliness”.
The local judges for FDA 2005 were Mr. Peer
M. Sathikh, President of Designers Association of Singapore,
Ms Rita Soh, President of Singapore Institute of Architects,
Mr. Nicholas Merrow Smith, Honorary Secretary of Interior
Design Confederation (Singapore), Mr. Carsten Ovesen, Managing
Director of Carsten Ovesen Design, Mr. Andrew Pang, Product
Developer of X-Tra Contract. The judges from overseas included
Mr. Christophe Pillet of Agence Christophe PILLET (France),
Mr. Lars Engman, Chief Designer of IKEA (Sweden) and Mr.
Philip Koomen of Philip Koomen Furniture (UK).
The Preliminary judging for the FDA 2005 Open
Category will be held in January 2005. The closing date
for submission of entries for this category is 1 December
2004. Six entries will be short-listed for judging at the
grand finals.
Sneak Preview into Some
Inspiring Masterpieces of FDA2005
|
|
|
|
Turn |
The Maiden's Hairpin |
Vox |
Qipao |
Back
to Top
American
Hardwood Export Council (AHEC): Supporter of the Furniture
Design Award by SFIC
Leveraging SFIC’s quest to raise design
standards regionally and to establish Singapore as a furniture
design hub boasting a strong “Asian” brand identity,
the American Hardwood Export Council (AHEC) partners SFIC
to encourage the use of American hardwoods in Asian furniture
designs.
From Left: Mr Peter King (1st Vice Chairman of AHEC), Mr
John Chan
(Regional Director of AHEC South East Asia & Greater
China), Mr Andrew Ng (1st Vice President of SFIC)
and Mr Tony Lin (President of Eurosa Furniture Co. (Pte)
Ltd
AHEC participated in the 2003 and 2004 Furniture
Design Award and will again lend its support for the third
year in 2005. A further initiative that AHEC conducted to
complement the design competition was a seminar on 28 October
2004 for aspiring designers to understand the diversity
and working properties of American hardwoods.
As the leading international trade association
for hardwood industry in the United States of America (USA),
AHEC represents American exporters of hardwood and major
hardwood product trade associations. AHEC’s member
companies service the growing global demand for American
hardwood and hardwood products including sawn lumber, veneer,
plywood, flooring, moulding and dimension materials.
In addition, AHEC provides the furniture industry,
hardwood trade importers and professional specifiers with
promotional assistance, technical and supplier information.
AHEC’s programmes are run through the joint efforts
of the U.S. hardwood industry and the Foreign Agricultural
Service of the U.S. Department of Agriculture. Long term
planning and careful forest management by AHEC also ensures
that the USA continues to produce reliable, sustained supplies
of temperate hardwood.
Over the last two years, AHEC has participated
in major trade fairs and exhibitions throughout South East
Asia, including Thailand, Vietnam, Malaysia and Singapore.
AHEC has also conducted several technical seminars in Singapore
as well as engaged in other promotional activities to increase
awareness of America’s huge hardwood resource and
processing industry.
AHEC is well known for its frequent involvement
in design competitions, having previously organized and
sponsored similar events in Italy, Spain, Japan and Korea.
John Chan, Director of AHEC in Hong Kong, said, “Our
continued support of SFIC’s Furniture Design Award
is a good demonstration of our long term commitment to the
region.”
American hardwoods are now readily available
in Southeast Asia. Recent export data for the first half
of 2004, issued by the U.S. Government, showed that American
hardwoods have recovered lost sales due to SARS and the
economic downturn and had made substantial gains in several
markets across Southeast Asia. In Southeast Asia, the trade
value of the main hardwood species was up 49% compared to
the same period last year while others saw even more spectacular
growth rates. Tulipwood (yellow poplar) lumber shipments
rose from $685,000 to $2.358 million – an increase
of 244 per cent.
For white oak, the shipment value to Southeast
Asia for the first half of this year stood at $12.5 million.
This marks a 57 per cent increase in value for the region.
The worldwide increase was 21 per cent.
AHEC’s headquarters is in Washington
DC and boasts offices in Europe, Japan, China, Korea and
Mexico. Recognizing Asia’s huge market potential,
AHEC Southeast Asia & Greater China Office (AHEC-SEA&GRCH)
was set up in early 1992 as a regional office.
To better develop business prospects in the
Asian market, an inaugural convention of American hardwoods
was organized last year in Ho Chi Minh City, Vietnam. This
is in addition to the annual convention organized by AHEC
in China. For 2004, AHEC held the convention in Qingdao
while Beijing will be the venue for 2005’s conference.
AHEC also produces a number of technical publications,
which are available free of charge. More information on
AHEC can be found on www.ahec-seasia.org.
Contact Details:
American Hardwood Export Council
Room 528, West Wing
20 Salisbury Road
Tsimshatsul,
Hong Kong
Tel: (852) 2724 0228
Fax: (852) 2366 8931
Back
to Top
Robust
Sales & Emerging Design Trends at International Furniture
Fair Singapore 2005/22nd ASEAN Furniture Show
More than 90% of the floor space at the International
Furniture Fair Singapore 2005/22nd ASEAN Furniture Show
(IFFS/AFS 2005) has already been snapped up.
A whopping 75% of the exhibitors who confirmed
their participation for IFFS/AFS 2005 are stalwart supporters.
Many of them have increased their exhibition space, like
Kenas Pacific from Hong King, DMC International from Ireland,
E&M Home Collection and Hong Kong & Shanghai Leather
Corporation Limited, both from China; more than doubling
their floor space.
Equally important, about 20% of the participation
will be making their debut at IFFS/AFS 2005. Debutantes
include Tetto Mobilya from Turkey; Encoe Australia from
Australia; Musha Cay from Spain; Vader Inc from India; Zanazan
and Furniture Classics from USA and many more to be expected.
“We are certainly encouraged by some
of the foreign exhibitors participating at the show as they
were traditionally more keen on their home-grown flagship
trade fairs. Their increased participation at IFFS/AFS 2005
affirms the show’s status as the “Best Show
in Asia”. We are also very pleased to note that even
the Malaysian participation has tripled from the 2004 show.
This is despite the existence of three other furniture shows
in Malaysia during the month of March,” said Mr. Jerry
Tan, Chairman of the IFFS/AFS 2005 Show Organising Committee,
SFIC.
Some other prominent exhibitors to look out
for at IFFS/AFS 2005 include Four Hands from USA. Four Hands
has been named entrepreneurial growth leader by Inc. Magazine
in the USA for three years running. Others include DeCoro
from Italy, one of the world’s leading leather upholstered
furniture producers and Interwood Vietnam Limited, the largest
Vietnamese exhibitor at IFFS/AFS 2005.
Adding to the variety of the show, furniture
trade players can also look forward to exhibitors from the
British Virgin Islands for the first time. IFFS/AFS 2005
will have exhibitors from 33 countries, establishing the
show as a truly international event with the largest number
of country participation than any other shows in Asia.
A design-led exhibition, IFFS/AFS 2005 is
increasingly recognized by leading furniture design companies
as the premier platform to showcase their award-winning
innovations. First-time Canadian exhibitor, Product Depot
Worldwide Limited, is one such company. It has patented
about 300 unique designs and innovative furniture since
its establishment in 1989 and won the Best Show Design twice
at High Point, USA.
Another design-focused exhibitor to watch
our for, among others at the IFFS/AFS 2005, is Design Tray
Interior (S) Pte Ltd, whose Systemind® Platform bagged
the Silver award at the 2003 International Furniture Fair
Tokyo (IFFT). The design, which was patented at IFFT 2003,
comprises sleek-fitting modular platform boxes that are
designed for multiple uses to provide creative furnishing
solutions for small homes and offices and to suit different
customer needs.
For 2005, IFFS/AFS is again looking to feature
innovative furniture design in Asia with its Design Gallery,
which will have twice the number of design-led companies
displaying their designer showpieces. In addition, the winners
of the 12th Furniture Design Award will showcase their creations
at IFFS/AFS 2005, while the ever-popular 3rd Furniture Design
Forum will be held on 2 March 2005.
For more information on IFFS/AFS 2005,
please visit www.iffs.com.sg.
Back
to Top
Life
Long Learning to remain relevant: Programmes at the Furniture
Learning Institute
It has been ten months since the Furniture
Learning Institute (FLI) was launched to help re-skill and
train staff so that they remain relevant to the ever changing
landscape of the furniture industry. On most accounts, the
FLI has been a success in identifying the training needs
of the industry and creatively coming up with training solutions
to satisfy those needs.
Very early on, the importance of the intra-company
communications as well as customer service through interpersonal
skills, were identified as key to building up a strong workforce,
able to adapt to change and increasingly savvy customers.
As Dr Toh Soon Huat of Novena Holdings notes:
Customers are now more discerning of quality
and service. There has to be a total upgrade in terms of
pricing, quality, design and importantly service. Only then
can the company differentiate itself from its peers and
give the customer confidence in its products and services.
Dr Toh has been a strong supporter of the
FLI programmes, sending over 200 staff faithfully to FLI
workshops such as Communications Works! For Staff in the
Furniture Industry, Advanced Communications Works! For Supervisors/Managers
in the Furniture Industry and Adaptive People Strategies
for Sales Effectiveness for Staff in the Furniture Industry.
Other companies such as Star Furniture and
the Kingsmen Group have also been sending their staff to
such workshops. One not-so-tangible, albeit significant,
benefit arising from staff’s participation in such
training programmes is the change in mindset after attending
the programmes. Many HR managers and directors have observed
that before the programmes, the staff’s focus would
be on the work and conflicts arising from a clash of working
styles and personalities often remain unresolved, thereby
creating an unproductive and resentful environment. However,
after attending the workshops, the staff learn to be aware
of one another’s working styles and communication
behaviours. They learn to be more flexible, they communicate
better with one another and enjoy better working relationships
with their colleagues. Coming together in a non-work environment
also gives them a chance to get to know one another better
through teambuilding and bonding exercises.
What the managers and directors of companies
interviewed appreciated was the FLI’s dialogue with
them through follow ups after the training programmes. FLI
staff would monitor the progress of a company’s training
programme and would initiate discussions as to how to tailor
the programmes to suit the company’s needs. Besides
the training budget allocated to each corporate member of
the SFIC, it is this support and dialogue that differentiates
the FLI from other generic training providers. The saying
goes “It takes one to know one” and in the FLI’s
case, it certainly knows its members’ training needs
well.
Interviews
Dr. Toh Soon Huat, Chief Executive
Officer, Novena Holdings
Novena is a well-established consumer lifestyle group in
the furniture and beauty industry. In Singapore, the group
comprises of Novena Investment, Novena Furnishing Centre,
Castilla Design, The White Collection, Natural Living, Leewah
Essentials, NC Essentials, BSP Global and NIClas International.
Dr. Toh firmly believes in life long learning
and puts his money where his mouth is – his company
has a training budget of S$150,000 per year excluding the
FLI training grant. His view is that:
A company is only as strong as its weakest
link. If your top management is strong and enlightened but
your support staff is weak, then the company cannot be said
to be a strong company. In order to grow, the company and
its entire staff must grow together.
That is why he has sent majority of his staff
to the FLI’s training programmes. He agrees with what
the FLI is trying to do.
The FLI is very supportive, very advanced
in terms of training technologies and concepts, and it knows
the industry’s problems. It is also creative in designing
courses that help fulfil the companies’ training needs.
His advice to other corporate leaders is not
to hold back on the training budget as:
The way forward is through the strength
of your work force. And this strength comes from learning
and applying the skills that you have learnt.
May Koh, Group Retail Manager, Star
Furniture
Star Furniture is a furniture and home life-styling retail
chain operator in Singapore and Taiwan with its own manufacturing
facilities in the region. With a total workforce of 500
staff in Singapore, Malaysia, Taiwan, China and Japan, its
retail chain includes Star Furniture, Mondi Lifestyle and
Zen Tradition.
One of the company’s objectives is to
develop concepts within its social responsibility scope
through continuous learning from experiences learnt and
shared within the group. It is this sharing of experiences
learnt that motivates Ms Koh to send 55 staff to the FLI’s
training programmes. She acknowledges:
The hands-on activities and discussions
are helpful, especially since the training provider is able
to conduct bilingual discussions. This helps to put some
staff at ease since they may not be proficient in the English
language.
Like the other managers, she notices that
after the workshops:
Staff give positive feedback. They learn
a lot from these sessions – both about themselves
and about their colleagues. Through games and activities
like Johari Window and role plays, staff find out more about
how others perceive them and how they can improve their
relationships with their colleagues.
Ms Koh feels that communication is one of
the most important skills to have in the industry:
Without knowing your customers’
needs, you won’t be able to do a product presentation
effectively.
Jeannie Thung, HR Manager, Kingsmen
Creatives Ltd
With over 28 years of impressive track record in commercial
interiors, exhibition & museums, research & design
to integrated marketing communications, Kingsmen has established
itself as a leading provider of three-dimensional design
and communications solutions across Asia Pacific and the
Middle East. Its network of 15 offices across the region
is each capable of providing one-stop-shop service, from
design consultancy to project management and construction
and efficient after-sales services, to clients from any
location worldwide.
At Kingsmen, it is believed that the heart
of quality lies with the people who are totally absorbed
in the notion that quality impacts the market. Everyone
has a vital role to play in the chain of activities that
produces customer satisfaction. Hence, consistent training
and upgrading of its staff allows them to stay relevant
to customer needs. After all, the customer’s success
is their success.
Ms Thung had the company’s philosophy
in mind when she sent 20 staff to a training sessions recently.
She said:
Interpersonal communication skills are
one of the most valid skills in today’s workforce.
When staff “speaks the same language”, and work
in synergy, the company becomes more efficient and effective
when handling the daily work processes.
Ms Thung notices that after the course:
Staff members gain a valuable insight
to their own as well as their colleagues’ unique working
style. As such they have become more accommodating and understanding
to one another’s needs. Furthermore, with an increased
knowledge of using the appropriate communicating style when
dealing with external parties, our staff is able to achieve
a higher level of customer service excellence.
New Series
of Training courses by FLI
Starting this November, FLI will be partnering with Singapore
Polytechnic to launch three new training courses on warehouse
management, operations and delivery management.
1. Certificate of Performance in Warehouse
Management
Topics Covered: Key warehouse
processes and activities, principles of good inventory control,
housekeeping and security, customer service, material storage
and handling, warehouse performance management, audit, design
and layout.
Who Should Attend: Warehouse
Supervisors
Duration: 16 hours
2. Certificate of Performance in Warehouse
Operations
Topics Covered: Key warehouse
activities, principles of good inventory control, housekeeping
and security, materials handling & storage systems and
customer service, basic warehouse management principles.
Who Should Attend: Warehouse
Operators
Duration: 16 hours
3. Certificate of Performance in Delivery
Operations
Topics Covered: Key distribution
activities, delivery scheduling, customer service and handling
complaints and safe product handling.
Who Should Attend: Delivery
operators
Duration: 12 hours
For enquiry, please contact Ms Joyce
Lee @ 6568 3251 or joyce@singaporefurniture.com.
Back
to Top
Vietnam
– the Next Rising Star of the Asian Furniture Industry?
Vietnam, with a landmass of about the size
of New Mexico in USA, boasts a population of about 82 million.
63% of its 38-million-strong workforce is involved in agriculture
trade while the rest works in other sectors.
Increasingly, the agriculture-based nation
is diversifying in other areas of growth and the wood furniture
trade is one non-farming sector that is yielding impressive
results and is fast becoming Vietnam’s next golden
goose.
In 2003, Vietnam’s total woodwork furniture
export was worth US$560 million – almost a 30% increase
from 2002. For 2004, the total woodwork furniture export
is expected to rise to US$1 billion, almost a 50% increase
compared to 2003 export estimates. (All figures based on
statistics by the Vietnam Ministry of Trade)
Today, the United States is the third largest
importer of Vietnamese furniture, right behind Japan. Vietnam’s
woodwork furniture export to the United States leaped seven-fold
over the past three years. Its value surged from just US$13
million in 2001 to US$93.4 million in 2003. The European
Union is currently Vietnam’s leading furniture importer.
While foreign-managed manufacturers currently account for
the majority of Vietnam’s wood furniture exports to
the United States, increasing demand is expected to come
from native US furniture companies.
| |
Top 3 Import Countries for Vietnamese
Furniture |
2003 Imports (US$) |
|
1 |
European Union (EU) |
163.3 million |
|
2 |
Japan |
110.9 million |
|
3 |
United States |
93.4 million |
3 main areas of furniture
production:
 |
1. Hanoi – It is the manufacturing centre for home accents
and solid wood traditional Vietnamese furniture with
exports primarily to Asia. Hanoi is considerably more
industrialized than other parts of the country and
looks set to become an important player in the furniture
export market.
2. Danang – This region is slated
for a round of clustered industrial development by
the Vietnamese government, of which initiatives to
further develop the furniture industry may be included.
3. Ho Chi Minh City – This is
the current centre for furniture manufacturing with
key exports to the USA market. A combination of home-grown
Vietnamese and foreign-managed plants can be found
located mostly in clusters in the city as well as
the adjacent Binh Duong, Dong Nai and Long An provinces.
|
Vietnam’s Competitive
Edge
1. Cheap Labour Cost
With a current minimum wage of approximately US$35 per month,
Vietnam has one of the lowest industrial wage structures
in the world. The low labour cost has attracted more manufacturers
to relocate their factory operations from countries like
Malaysia, Philippines and even China to Vietnam in recent
years.
2. Established Infrastructure
Existing well-established furniture manufacturing infrastructures
provide good supply-chain support essential for industrial
growth. The nine ports and harbours on the Gulf of Tonkin
and the South China Sea provide manufacturers ready and
easy access to international shipping lines. The US-Vietnam
Bilateral Trade Agreement, which took effect in 2001, will
significantly increase Vietnam furniture exports to the
USA. Currently, the USA is assisting Vietnam in the implementation
of legal and structural reforms required in the agreement.
3. A Strong Alternative to China
Despite China’s strong growth in the recent years,
Vietnam, with its low labour costs, quality craftsmanship
and highly adaptable work force proves to be a strong competitor
to China.
Disadvantages for Vietnam
1. The Moisture Issue
Most of the lumber found in the Southeast Asian region –
specifically in countries like Malaysia, Thailand, Indonesia
and Vietnam – are below 15 per cent equilibrium moisture
content (EMC). Without appropriate equipment and procedures
to treat and dry the wood, some of the problems that may
arise in the furniture products include splitting, warping,
twisting and even loosening of joints and veneers.
2. Cultural Differences
Compared to workers in China, Vietnamese workers adopt a
more laid-back attitude and would be less receptive to overtime
work requirements. In addition, they are also known to react
poorly to criticism or reprimands and resent being subjected
to close work supervision.
3. Communication Difficulties
The inability of many native Vietnamese workers to understand
English translates to production lines issues as the communication
of production goals and quality standards is hindered.
To overcome these challenges, the Vietnamese
government has embarked on several initiatives to boost
its competitive edge in the global furniture industry. For
example, to address the issue of Vietnam’s inadequate
ports and ill-developed transportation routes, the government
has developed a transportation infrastructure development
master plan that aims to double Ho Chi Minh City’s
port capacity by 2010. Part of this strategic blueprint
includes the development of a sophisticated network of modern
roads in the city to speed up transportation of containers
from factories to the dock.
To upgrade the skill sets of workers in the
furniture industry, the Handicraft and Wood Industry Association
(HAWA) in Ho Chi Minh City is planning to launch a technical
school for its members. Workers will be trained in furniture
production, product finishing and design. HAWA also plans
to partner companies like Akzo Nobel and Valspar to provide
finishing expertise and training at this school.
With such developmental strategies in place,
the Vietnam furniture industry is definitely poised to take
on strong regional competition in the coming years.
Some Foreign-owned furniture
factories at a glance
| Factory |
Green River |
Koda |
Latitude Tree |
Woodworth |
| Ownership |
Taiwanese-owned, part of Green River
Group |
Singaporean-owned |
Malaysian-owned |
Taiwanese-owned |
| Established |
2001 |
2000 |
2002 |
2003 |
| Product Categories |
Bedroom, dining, curios and occasional |
Bedroom, dining, occasional and upholstery |
Bedroom, dining, occasional and wall
units |
Bedroom and chairs |
| Workers |
2,100 |
450 |
1,100 |
1,500 |
| Current Shipment |
285 t0 300 containers per month |
250 containers per month |
150 to 200 containers per month |
40 to 50 containers per month |
| Product Facilities in Vietnam |
1.1 million sqft plant |
21,000 sqft plant in Vietnam was built
in 2000; 120,000 sqft Koda International plant was built
in 2002 |
600,000 sqft plant |
500,000 sqft plant in production |
Back
to Top
An
Insight into the German Furniture Industry
Though one of the most attractive furniture
markets in the European Union, Germany is also one of the
hardest hit by the prolonged sluggishness of the economy
over the last two years.
Nevertheless, Germany is still one of the
largest furniture consumers in the European Union, boasting
about Euro 313 per capita consumption of home furniture.
However, in the recent years, German furniture manufacturers
have experienced a steady decrease in consumer spending
on furniture. One of the reasons for this trend is the aggressive
proliferation of Ikea-like furniture concept stores, which
offer consumers a large variety of furniture and home furnishings
at very competitive prices. Stores such as Porta, Ostermann
and Lutz, which boast floor space between 4,000 to 10,000
square meters now make up about 25 per cent of the German
furniture market share.
The growing market segment for lower-end furniture
outlets has attracted traditional, high-end retailers such
as Zurbruggen, Finke and Segmuller to infiltrate the “budget
and mid-range” market in a bid to capture a share
of the business pie. Currently, the trendsetters in German
furniture trade include Rolf Benz, Cassina and De Sede (upholstered
furniture), Marktex (high-end furniture), Hulsta (middle
to high-end furniture), Bulthaup, Siematic and Zeyko (kitchen
furniture) and Paidi (children furniture).
Total
Germany Residential Furniture Imports
Germany is one of Europe’s major furniture importers,
with an average 5% growth in residential furniture imports
between 1997 and 2002. Germany imported more than Euro 6,157.4
million of residential furniture, a breakdown by products
of which is as follows:
Most of the residential furniture imports
originate primarily from Eastern Europe, accounting for
45.3% share of the total in 2002. This comprised mainly
of transfers of furniture, which were manufactured by subsidiaries
of German companies in these regions where the labour cost
is lower. The major partner is Poland, with a share of 21.2%
worth Euro 1,306 million in 2002. Almost half of the imports
from Poland are upholstered furniture.
Furniture imports from the Asia Pacific accounted
for about 7.2% of Germany’s total furniture imports.
A large part of it was from China. Imports from China increased
by an average of 29% since 1997 and accounted for 3.2% of
the German market share in 2002.
Germany Residential furniture
sales by distribution channel, 2002. Percentage breakdown
of value data
Furniture
Distribution Channels
Germany’s distribution system is characterized by
its high degree of concentration in certain locations.
About 85 per cent of furniture sales are made
through specialist distribution channels, which include
small independent retailers, buying groups and furniture
chains. One of the most significant developments of the
distribution system in recent years is the increasing influence
and concentration of buying groups, which control and distribute
up to an estimate of 70% of German furniture. The increasing
business pressure asserted by these groups is making it
increasingly difficult for independent outlets to resist
leveraging the groups’ distribution channels.
Distribution by product
segments
| Product Segments |
Distributors |
| Upholstered furniture |
70% - distributed through large scale specialist
chains, including franchising and buying groups
15% - through non-specialised distribution channels
including mail order, e-commerce and DIY stores
15% - through small independent specialist retailers,
including generalists and upholstery specialists |
| Upper end furniture |
60% - controlled by independent retailers
25% - through buying groups such as WK, Musterring,
Garant
10% - through franchising
Rest - through the contract channel |
| Kitchen furniture |
Kitchen furniture distribution is dominated by
furniture chairs and buying groups, followed by specialists
and DIY stores. These collectively have a great influence
on the market for kitchen furniture. They control
50% of total sales.
Majority of retailers are part of these groups. |
Top 10 Leading Furniture
Distributors in Germany (2002)
Company |
Furniture
Sales |
% of furniture
on total sales |
Type of distribution |
Group |
| |
Million EUR |
Market share
% |
|
|
|
| Begros |
2,380 |
9.2 |
70 |
Specialized: L/BG |
spc |
| VME |
2,299 |
8.9 |
87 |
Specialized: L/BG |
spc |
| Garant Mobel Germany |
1,674 |
6.5 |
93 |
Specialized: L/BG |
Garant Mobel |
| Atlas Germany |
1,645 |
6.4 |
70 |
Specialized: L/BG |
spc |
| Union |
1,636 |
6.4 |
55 |
Specialized: L/BG |
ATLAS |
| Ikea Deutschland |
1,498 |
5.8 |
70 |
Specialized: L/CI |
spc |
| Mondial |
1,349 |
5.2 |
93 |
Specialized: L/BG |
spc |
| MHK |
1,316 |
5.1 |
70 |
Specialized: L/BGK |
MHK+WK |
| Europa Mobel |
1,268 |
4.9 |
98 |
Specialized: L/BG |
spc |
| DMV Deutscher |
980 |
3.8 |
70 |
Specialized: L/BG |
DMV |
Imm Cologne
Furniture Show
 |
The Imm Cologne Furniture
Show held at Cologne fairgrounds is a must for many
manufacturers, dealers, designers and visitors worldwide.
The 2004 event was participated by 1,368 suppliers
from 48 countries and over 120,000 visitors.
Come 17-23 January 2005, the global furniture and
interior-decoration sector will once again congregate
in Cologne, where new ideas are showcased, trends
are launched and the course is set for future business
success. |
Another key highlight for 2005 is the Imm
Cuisinale, which is held once every two years and showcases
the international suppliers of kitchen furniture and fitted
appliance.
The SFIC will once again be leading a Singapore
pavilion to participate in this fair. Do drop by our booth
at Hall 7.1 Stand No. A2/B3 for a hot cup of coffee whilst
in Cologne then.
Back
to Top
Legal
Column: Performance Bond – Stop That Call!
In our second installment of this series,
we examined issues related to suspension of work. Today,
we will discuss those relating to performance bond.
Many trade contractors assume that the performance
bond is required by the terms and conditions of the Standard
Form Building Contract (“the contract”) published
by the Singapore Institute of Architects (the “SIA”).
It may surprise many that the contract is silent on performance
bond. It is not a requirement of the SIA. In most cases,
the Owner’s consultant inserts the clause on performance
bond into the Letter of Award over and above the terms of
the Standard Form Clause. Contractors can negotiate to remove
this additional term on performance bond prior to entering
the contract.
In recent years, many construction companies
increasingly find that their insurers are unable or unwilling
to issue performance bonds. As a result, some owners agreed
to do away with performance bonds. Presumably, these owners
were satisfied that their interests were sufficiently protected
by the retention sum provisions set out in the contract.
For contractors who have completed servicing
their performance bonds, it would be worthwhile to understand
how Owners or Main Contractors can be prevented from issuing
further performance bonds.
Very often, when a trade contractor receives
news about performance bonds from the insurer, it came as
an unexpected and unfair surprise. The trade contractor
will have to retrieve and examine relevant past documents
to collate the necessary information for presentation in
Court.
In an application for Court injunction, the
Trade Contractor has to show that it was fraudulent or unconscionable
for the Owners (or Main Contractor) to call on their respective
performance bond. Consequently, this requires a high degree
of documentary proof. The trade contractor is also bound
by duty to provide full and frank disclosure, notwithstanding
the merit of the application.
Two cases may illustrate the complexity of
performance bond issues. In the first case, a letter from
the owner’s project consultants advocated one method
of rectifying a defect, which would have been relatively
inexpensive. Instead, the owner engaged another set of consultants
to replace the defective works at a much higher cost and
called on the performance bond hoping to recover the higher
cost incurred. In the second case, the delay certificate
was issued by a third party instead of the project architects.
This resulted in the delay certificate being defective and
the owner was not entitled to any liquidated damages or
to call on the performance bond to recover them.
In both cases, the trade contractor’s
lawyers must proceed with haste to avoid the insurers from
paying out the respective performance bonds before it is
determined that the Owner has no right to claim the settlements.
This is especially so when the Court could not stop the
call. Unlike usual court proceedings where the Court would
schedule a hearing date 3 or 4 weeks later after receiving
the hearing application, the lawyer had to go to the Court
to see the duty Registrar and thereafter the duty Judge
before a date is set.
The Court appointment can be made within 24
hours of the application for both cases. The necessary injunctions
can also be issued if the Court were to agree with the lawyers
interpretation of the related documents. In both cases,
the Court injunctions were served on the insurers successfully
and the call on the performance bonds was stopped in time.
These two cases demonstrated how critical it was to obtain
the relevant documents quickly and on time.
It is strongly recommended that the construction
industry review the need for performance bonds. If performance
bonds were needed at the commencement of the construction
period to secure the Contractors’ performance, one
would have thought that the bond value should be reduced
and eventually discharged as the retention sums accumulate
progressively. It would be considered unfair to require
the trade contractor to provide the double protection of
both the performance bond and the retention sums throughout
the construction period. This would also create added cost
to the whole industry. Afortiori (all the more so) if the
consultants under-certified the value of work.
In the aforementioned 2 cases, the Court could
see that the projects were completed, TOP of CSC issued
and yet the owners were withholding large portions of the
contract sums due to under certifications. In such circumstances,
it may be easier to conclude that the owners’ call
on the Performance Bond was unconscionable.
Back
to Top
Understanding
Patterns of Sales Performance
Individual sales performance varies from staff
and may be the direct result of the respective person’s
work attitudes and sales ethics. The key to achieving great
sales returns for any organization lies in the nurturing
of “best sales practices” among sales staff
through continuous education and most importantly, having
a management that leads by example.
Observed Mr. Andrew Sng, Senior Partner (Asia)
of Decision Processes International (DPI), “Sales
is the life-blood of any business! Regardless of the job
title or whether or not one has face to face contact with
customers, every employee is more or less a salesperson
in the company as the person represents the company. Unfortunately
in Singapore, it is not a priority for a company’s
management to cultivate a good corporate sales culture.”
Common
attributes if top performing salespeople:
- Possess the ability to relate to a diverse range of customers,
i.e. people of all ages, nationality, race and gender
- Posses a personable disposition (e.g. remembering customers’
names, etc) and are trusted by customers
- Possess excellent product knowledge
- Possess a good listening ear and are empathetic towards
customers’ problems
- Places customer issues priority
- Efficient in solving customers’ problems at hand
- Proactive
- Organised and punctual
- Take pride and enjoy their work
- Meticulous in their work, making few or no mistakes, including
follow-up sales services
- Possess a loyal customer base
- Creative in improving sales performance and to achieve
sales targets
- Warm and friendly towards customers, including browsing
ones
Attributes
frequently associated with ineffective salespeople include:
- Possess a cold and unapproachable disposition
- More interested in making the sale than meeting the customers’
needs
- Inability to relate the product offerings to customers’
needs
- Are poor in handling customer rejections
- Not proactive
- Use uncreative and impersonal sales tactics, e.g. forgets
customers’ names or requirements
- Does not conduct follow-ups with customers
- Fail to capture customers’ loyalty and possess small
customer base
- Often late for work
- Inefficient, makes errors resulting in customer complaints
- Fail to meet sales targets
Unfortunately, most ineffective salespersons
fail to make the correlation that the quality of customer
service has a direct impact on the sales outcome. They often
attribute failures and poor sales results to external factors
without examining their own work ethics.
Mr. Sng added, “The most common mistake
a salesperson makes is in identifying the wrong customer.
A high proportion of buying in organizations today involves
a team or a Decision Making Unit rather than an individual.
Hence you need to focus your sales pitch towards the group
rather than the person.”
He also observed that sales people nowadays
give in too easily to their customers, often offering freebies
and promotions to unresponsive customers even before they
indicate any interest in purchasing the product.
Manage
at Individual Staff Level for Best Sales Results
One of the greatest challenges for today’s sales managers
lies in their ability to inculcate ‘best sales practices’
among their staff. This is particularly so in seasoned sales
people who are resistant to change. Behavioural changes
can be more effectively brought about through individual
counseling sessions with the sales team through regular
coaching by the management.
“It’s the old adage of
‘Monkey see, monkey do’ and this means that
the management must lead good sales practices by example,”
said Mr. Sng.
He also advises on the importance of strategic
sales reports that can be leveraged as a value-added tool
to improve work performance. “Get each salesperson
to identify a prospective customer “hit list”
and quantify the potential sales that each of these customers
can bring to the company… this way, management can
also add value to the sales process by helping each staff
develop a more targeted sales pitch to each customer.”
He also cautions against the following to
avoid high turnover of sales staff in an organization:
- Unrealistic sales targets
- Rewards does not commensurate with sales efforts
- Low-quality product
- Lack of proper sales training for staff
- Lack of clear career progression for staff to aspire to
Back
to Top
Party
Throughout the Viva Vegas Night…
For the first time in SFIC’s history,
more than 1,000 members and business associates turned up
for the Council’s 23rd annual Dinner & Dance held
on 24 September 2004 at the Suntec Convention Centre. A
pre-dinner cocktail session allowed guests to catch up with
friends and network with business partners as they exchanged
the latest gossips and news on the industry. Guests came
dressed in their best and to the theme, “Glamour &
Glitter”. Three casino gambling tables, complete with
adorable “bunny ladies”, were set up for guests
to try their luck at blackjack and roulette.
Lucky individuals won attractive prizes, courtesy
of the sponsors of the Dinner and Dance. Not forgetting
the less fortunate among us, SFIC collaborated for the first
time, with TOUCH Community Services (TCS), a non-profit
voluntary welfare organization, to raise funds for the needy.
Generous donations from dinner guests through the sales
of bingo cards, wines and a mini-auction, made the fund-raising
event a success. A total of S$10,807.00 was raised that
night. It was definitely a fun-filled night of entertaining
performance, games and feasting!
 |
Mr James Koh (SFIC President)
with Mr James Goh (Executive Director of Supreme Furnishing
Centre). Special thanks to Mr Goh for his generous bid
for the painting by TCS clients - Sim Kim Han and Sim
Siong Lin. |
SFIC would like to take this opportunity
to thank all the following sponsors for their strong support
and contribution:
A’biance Pte Ltd
Ambrosia Communications Pte Ltd
Asia Premium Marketing
Blum South East Asia Pte Ltd
Cellini Design Center Pte Ltd
Cityneon Exhibition Services Pte Ltd
Commercial & Residential Interiors Pte Ltd
DGM Solutions Pte Ltd
Foreword Communications
Grand Copthorne WaterFront Hotel
JIM Logistics Management Pte Ltd
Media Planning Services
MediaRing Pte Ltd
NC Woodwork & Construction Pte Ltd
Novena Furnishing Centre Pte Ltd
Orient-Explorer (S) Pte Ltd
Permanent Personnel Services Pte Ltd
Pico Art International Pte Ltd
R T Sofa
Schenker Singapore (Pte) Ltd
Shanghai Tong Lee Hardware Pte Ltd
Singapore Exhibition Services Pte Ltd
Singapore Furniture Association
Singex Venues Pte Ltd
Star Furniture Industries Pte Ltd
Studio 2000 Pte Ltd
Sunrise Doors International Pte Ltd
Suntec Singapore
The Oriental Singapore
Trans-Link Exhibition Forwarding Pte Ltd
UOB Bank
Weng Heng Pte Ltd
Back to
Top
DISCLAIMER
Whilst every care is taken to ensure accuracy of the information
on this newsletter, SFIC accepts no liability for damages
caused by misinterpretation of information, expressed or
implied, within this newsletter. No part of this newsletter
may be reproduced in any form or by any means, without prior
permission in writing from SFIC.
