Interviewed by Syed Md. Rakeen, Team MBR

Selim H. Rahman is the chairman and managing director of Hatil Furniture, the leading and largest furniture brand in Bangladesh, which was born from a door shop back in 1989 and later expanded into furniture manufacturing. He started working in this sector right after completing his graduation in 1989. His dream is to create a global wave through his work and put Bangladesh on the map as a major contributor to the global furniture export market. He is an advocate of Kaizen and has been practising the philosophy in his business since 2007. Team MBR was in a conversation with Mr. Selim H. Rahman and was fortunate enough to receive his take on the furniture industry.

Syed Md. Rakeen: It has been observed that exports of furniture grew to USD 110.36 million in FY2021–22 from USD 52.53 million in 2016–17. What are the factors that, in your opinion, are fuelling this boost in exports?

Selim H. Rahman: It is indeed a heartening development that the furniture industry in Bangladesh has witnessed a significant surge in exports, more than doubling from 2016–2017 to 2021–2022, despite the various challenges posed by the COVID-19 pandemic.

The key factor driving this remarkable export growth is the industry’s commitment to product development and ensuring that the products meet global quality standards. This has helped the industry build trust and credibility among international buyers, increasing export orders.

Moreover, the entry of new cutting-edge technologies and new entrepreneurs into the market has ushered in a wave of innovation, developing new product lines and expanding the industry’s reach in international markets. All these factors combined have contributed to the tremendous boost in exports that we are currently witnessing in the furniture industry in Bangladesh.

Syed Md. Rakeen: Global trends show that people now prefer furniture with modern and stylish designs that keep minimalism and simplicity at their core. Do you think our furniture industry is in line with global trends in terms of designs?

Selim H. Rahman: Undoubtedly, the global furniture industry is witnessing a shift towards modern and stylish designs that emphasise minimalism and simplicity, and this trend is also clearly visible in Bangladesh. Several furniture brands in the country produce furniture that aligns with global design trends, keeping minimalism and simplicity at the forefront.

Previously, furniture designs in Bangladesh leaned towards bulky, ornate designs with heavy floral patterns and decorations, which consumed more wood and space. However, as consumers have become more aware of the challenges associated with maintaining such furniture, their preferences have shifted towards modern and minimalistic designs that are more functional and easier to maintain. This  shift in consumers’ preferences towards minimalism and simplicity has prompted the furniture industry in Bangladesh to adapt to global design trends.

Syed Md. Rakeen: According to Statista, the global market value of the furniture industry was USD 557 billion in 2022, which is expected to reach USD 726 billion by 2027. How do you perceive Bangladesh as a major contributor to the global market in the coming days?

Selim H. Rahman: Bangladesh can become a major contributor to the global furniture market in the coming days. With its skilled workforce, competitive labour costs, and growing domestic and international furniture demands, Bangladesh can capitalise on this opportunity to expand its furniture exports and increase its share in the global market. However, the industry needs to overcome its challenges, such as the heavy reliance on imported raw materials, the lack of backward linkage industries, and limited investment, to fully realise its potential. If these challenges are addressed through proper policies and collaboration between stakeholders, the furniture industry in Bangladesh can contribute significantly to the global market and boost the country’s economy.

Syed Md. Rakeen: Nearly 60% of the raw materials, such as timber, wood coating materials, hardware, accessories, etc., required to produce export-quality furniture are imported, which results in lower value addition. What are your thoughts regarding the industry establishing a complete backward linkage and being self-reliant?

Selim H. Rahman: The furniture industry’s heavy reliance on imported raw materials poses a significant challenge to achieving self-reliance and increasing value addition. To address this issue, the industry needs a comprehensive strategy that involves collaboration between stakeholders such as the government, industry, and academia. The strategy should promote local production of raw materials and increase export volumes to attract new entrepreneurs.

Furthermore, the government should formulate policies conducive to the furniture sector’s growth, such as reducing import duties and providing bonded warehouse facilities. By doing so, the industry can reduce its reliance on imported raw materials and achieve greater value addition locally, leading to a more self-reliant industry.

Syed Md. Rakeen: Though export figures are demonstrating positive growth, the furniture industry is yet to realise its true potential in exports. What are the key challenges the industry is facing to flourish to the fullest in exports?

Selim H. Rahman: Despite the positive growth in export figures, the furniture industry has not yet realised its full export potential due to several key challenges. One of the major challenges is the inability to be price competitive, partly caused by high import duties on raw materials.

The nominal growth in the furniture sector’s export value has also hindered the development of backward linkage industries, resulting in a heavy reliance on imported raw materials and increased prices of finished goods. To establish a stable position in exports, the furniture industry requires bonded warehouse facilities, similar to the readymade garments industry, which benefits greatly from this facility and maintains international competitiveness.

Additionally, high bank interest rates act as a barrier to entry for new entrepreneurs, limiting investment in the industry. To overcome these challenges, it is necessary to address these issues through policies that promote the growth of the furniture industry and encourage investment in the sector.

Syed Md. Rakeen: The COVID-19 pandemic had a significant negative impact on the steel furniture market, which has seen sluggish demand in the years since. What suggestions do you have for the revival of this segment?

Selim H. Rahman: The demand for steel furniture has decreased due to various factors, including the global price hike of steel and the COVID-19 pandemic’s impacts. Preferences of the customers for wooden furniture may also be a contributing factor. However, the challenges posed by the pandemic can be overcome, and we look forward to meeting the demands of our customers in the years to come.

Syed Md. Rakeen: Manufacturers and exporters have expressed their desires for enhanced policy support. Do you think that the policy support is adequate for the industry to flourish? If not, what changes are you expecting in the policies associated with the industry?

Selim H. Rahman: The current policies need to meet the requirements for the healthy growth in exports that we aspire to achieve. To tackle the challenges we are currently facing, the policies must be revised. The government can make the policies more effective and export-friendly by reducing import duties on raw materials, establishing backward linkage industries, providing bonded warehouse facilities, and introducing institutions or diploma courses tailored for this sector. These measures would not only lead to significant growth in the furniture industry but also attract new investors, contributing to an overall boost in the economy.

Syed Md. Rakeen: Readymade garments contributed 85% of Bangladesh’s total exports worth USD 52.08 billion in FY2021- 22. What are your thoughts regarding the furniture industry’s potential to diversify the country’s export basket in the upcoming years?

Selim H. Rahman: The furniture industry has enormous potential to expand the range of products exported from Bangladesh in the coming years. With a large and relatively low-cost workforce, we have a competitive advantage over developed countries like China, a major player in the global furniture industry. In addition, our exports have grown by over 110% between the fiscal years of 2016–17 and 2021–22, indicating a positive trend. However, to fully realise the industry’s potential, the government must take necessary measures, such as establishing backward linkage industries and reducing import duties on raw materials. With these initiatives, the industry can easily reach the billion-dollar mark and become the second-largest export-oriented industry in our country.