CEBU FURNITURE FIRMS SIZE UP THE RUSSIAN MARKET

19 November 2007 – a 10-member delegation representing furniture and accessories manufacturers from Cebu arrived in Moscow on a study mission to penetrate the Russian market in 2008 through the biggest furniture exhibition in Russia and Eastern Europe, the Embassy of the Philippines in Moscow stated yesterday.

Eric Vincent Casas, President of the Cebu Furniture Industries Association (CFIF), Inc., said the visit, which attracted six member companies and was two years in the making aims to help hone a specific strategy that would expand sales of Philippine furniture in the multimillion dollar Russian market through Mebel Furniture 2007 furniture exhibition.

The production and sale of furniture is among the most active industries for consumer goods in Russia in 2005, annual retail turnover exceeded more than 4 billion dollars, according to informal data gathered by the Ministry of Trade and Economic Development (MTED). Imports account to almost 50 percent, although some studies say it may even be 60 percent.

Coupled with the current construction boom, more and more Russians are acquiring “kottezhi” (cottages) – many full-fledged second homes that put the traditional Soviet-style dachas (country houses) firmly in the shade – in suburban areas.

The need to decorate all the new space is expected to spur demand, according to Arthur Akopyan, an associate of the Moscow branch of Expormim, a Spanish furniture firm that normally sells pieces from China, Vietnam, and Malaysia.

Akopyan, who finished his PhD on Philippine economics, said Russia’s hosting of the Winter Olympic Games in the subtropical southern Russian city of Sochi in 2014 will fuel a large expansion in furniture sales, a boom that the Philippines, in particular Cebu, can definitely exploit.

“Filipino furniture is of the same quality if not better than Italian furniture,” Akopyan said in a meeting with Casas, who is also President of Kirsten International Phils, Inc., Ms. Lorenza Boquiren, CFIF Vice Pesident and head of Castilex Industrial Corp, and Ms. Christina Lo of Coast Pacific Manufacturing Corporation.

Philippine furniture is known in Russia. In fact, it has been featured repeatedly in trade and industry magazines, such as The Architectural Digest, Tabouret, Mebel Tseny (furniture prices), Elle Décor and Salon in Russia, as well as Domus Design in neighboring Ukraine.

At the moment, only two companies are known to import Philippine furniture. The top supplier of Philippine-made ethnic furniture in Russia, the British-owned company Dreamlake, founded by Michael Robsky, sells Kenneth Cobonpue and Antonio Layug designs exclusively to wealthy oligarchs living along Rublyovka-Moscow’s “Golden Mile”.

The delegation, which is the fifth for trade to visit Russia in 2007, was also joined by Armi Lopez-Garcia, Honofrary Consul of Russia to Cebu. They were due to visit stands at Mebel 2007 at the Expocenter, as well as meet representatives of the Furniture Makers of Russia and the Association of  Enterprises in the Furniture and Woodworking Industry in Russia.

CFIF started cooperating with the organizers of Mebel in 2005, when its showcase exhibition, Cebu X, agreed to an exchange deal in the form of an information booth at the Mebel 2005. CFIF at the same time will invite participants to next year’s fair to be held at the Waterfront Cebu City Hotel on 6-9 March 2008.

In the absence of any industry representative or even of a trade representative, the Philippine Embassy has been assisting the industry to have an even greater exposure in a fast-growing consumer market. For example, the leading Movement 8 collective has widespread exposure in local media and through Hollywood films such as Oceans 13.

Movement 8, led by artist Budji Layug, is a group of young designers gathered by the Center for International Trade and Export Missions (CITEM) to present an aesthetically united front at the furniture show in Valencia some 10 years ago. In Russia, their use of bamboo, rattan, hardwood mixed with steel, chrome and glass is considered fresh and innovative.

The Russian market represents a large clientele base of 145 million people, with 3 percent considered as very rich, and 20 percent for the fast growing middle classs with a large potential for consumption.

Among the upper class, 1 percent of the population (1.45 million) has an average annual income of 90,000 USD. With half of the extremely rich living in Moscow, the city has earned the reputation of being one of the most expensive in the world.

/Gary