Rattan producers in rivalry for EU market
Rattan producers are eager to break into European markets, but they face international competition and a prohibitively high cost of entry into EU exhibitions.
RATTAN producers are keen to expand into European markets in order to meet burgeoning demand. But EU-level exhibitions remain out of reach for many – largely due to the prohibitive costs.
Myanmar Rattan Manufacturers Association vice president U Tin Oo says the industry remains out of step with international standards. Many producers lack the relevant knowledge to branch out into European trade shows, particularly when taxation and regulatory issues are concerned.
These two factors, he says, are holding the industry back.
“I have 20 years experience. We are just SME businesses. We can’t afford the cost of showing products at big exhibitions in Europe,” he said in remarks made at a press conference on November 8 held by leading trade fair organiser Messe Frankfurt.
Daw Thet Su Hlaing, a Messe Frankfurt Myanmar representative, said producers need to be willing to take a gamble in order to reap the benefits.
“You can gain profit only when you invest something. Some businesses need to take risks,” she said. “I think it is worth taking a risk if the risk can be calculated.” There is only one Myanmar exhibitor locked-in to attend the 2017 Ambiente consumer trade fair, she added.
When it comes to the global rattan market, Myanmar must compete with Indonesia, Vietnam and the Philippines – all of which have government support and production advantages, said U Kyaw Min Tun, director of Shwe Pin Lel Rattan Furniture.
He says Myanmar has yet to properly capitalise on its competitive advantage.
“We have [a massive amount of] raw material. This is green furniture and we want [to expand to meet] demand from international markets,” he said, noting that international sales could also save a dwindling art form. “The rattan business does not hold much interest for local businessmen. Only a few are doing it because they want to retain their ancestors’ jobs,” he said, noting that local demand is on the wane.
U Kyaw Min Tun has been exporting rattan furniture to Hong Kong and China for some years now. Currency fluctuation has presented a major challenge, he said.
“Some of the factories have had to shut down,” he said.
The Myanmar market is an emerging one, says ‘Ambiente’ and ‘Tendence’ spokesperson Erdmann Killian. However, he said, there’s room for growth.
“I can imagine the reluctance. Because it is such a big show, you have to make investments to make it happen – but on the other hand there are lots of opportunities if you go there,” he said.
Mr Killian said entrepreneurs in Myanmar have to think about where to invest money and where to do business.
“Rattan, bamboo and jewellery: There is always a market out there. When you come to Ambiente it’s not about doing business with German traders, but a chance to meet with buyers from any country in the world,” he said.
Director of Bella Interior Stellabeth Swezin Le, the first-ever Myanmar exhibitor in Messe Frankfurt’s 2015 trade fair, said it was higher risk than exhibitions in Singapore, Japan, China and Korea – and double the cost. But, she says, it was worth it in terms of business gained.
“EU buyers will find it difficult to come directly to your factory to buy Myanmar rattan products, as Myanmar has been closed to international market in previous years,” she said. “We know that the local demand is not high, and profit margins are very low. So we have to find a way to penetrate the EU market.”
‘We can’t afford the cost of showing products at big exhibitions.’ U Tin Oo Rattan manufacturer
An artisan makes traditional rattan furniture.