Following is an interview with U Thaung Aye, the chair of Monsoon Village Rattan Furniture in Thanlyin
Q: Please tell us the impact of advanced technology on the traditional craft economy.
Ans: Countries with advanced technology are no longer executing traditional craft businesses. With the technology improving, businessmen in the Philippines, Thailand, and Taiwan are giving up on traditional crafts. Only CLMV — Cambodia, Laos, Myanmar, and Viet Nam — are running craft businesses. Even art and craft businesses are at the risk of dying out in Viet Nam. But, we will keep traditional craft-based businesses alive as long as our country’s technology does not improve to a certain extent. The majority of rural people in Myanmar have art and craft skills. We can get raw material at a cheap price as we have our own natural resources. However, poor management is causing a slew of challenges in the industry. Small rattans are primarily produced in Kachin State and Sagaing Region, while bigger ones are found in Gwa in Rakhine State and Ayeyawady Region.
Q: How is the current furniture market climate?
Ans: We saw market growth prior to the Saffron revolution in 2017. There were 40-50 rattan companies back then. After the US and western countries imposed economic sanctions against Myanmar, the industry faced a crisis. Only five or six companies now survive.
Q: What are the prospects for this market?
Ans: There is potential for growth in the rattan production industry. However, we still cannot meet the demand and quality standards.
Q: How many countries have you grabbed a market share in? How are the external market conditions?
Ans: We have shipped our rattan furniture to New Zealand, South Africa, Belgium, the UK, and other countries. We have introduced our rattan furniture, linked up with international buyers, and tried to gain a market share through trade fairs such as the Singapore International Furniture Fair, Shanghai International Furniture Fair, and Bangkok International Furniture Fair. Earlier, we had approached our Chinese trade partners. Now, we have met with our Vietnamese counterparts. Some foreign wholesalers have observed the market and have negotiated with us to get the cheapest price.
They have made bulk purchases by signing an MoU and have distributed the goods to international retailers. At present, even retailers are directly purchasing goods at trade fairs. So, we can make more profit from them. Participation in trade fairs, at an estimated cost of K20-30 million, cannot guarantee profits. Therefore, we have started launching sales websites to reach a wider retail network. It is also cost-effective digital marketing.
Q: Is there steady export volume?
Ans: We have regular orders for 20-feet container loads. We produce 12 containers per year.
Q: Which products do you distribute in the domestic market?
Ans: We provide hampers to City Mart holdings. We have to rely on the domestic market. Earlier, I was the only one who had secured a share of that market, with orders for 40,000 hampers per year. Now, I have competitors and am supplying about 20,000 hampers.
Q: How many workers do you employ?
Ans: I have around 50 workers currently in my employ. Earlier, when this business was booming, we had 200 workers — 100 skilled workers, 50 semi-skilled workers, and 50 apprentices. I had ambitions to increase the labor force to 400-500 workers. However, unfortunately, a fire engulfed our factory after one year of operation.
Q: Have you faced any difficulty in seeking permits for raw materials?
Ans: We have to apply for a rattan licence. Extraction quota is granted to each township. However, some townships do not produce rattan, and changes in rules have led to red tape in obtaining permits.
Q: Please let us know the price of raw materials.
Ans: The price of rattan is positively related to commodity prices. We can get as much raw material as we need despite an increase in prices.
Q: What is the status of the border market for rattan?
Ans: There is a legitimate border channel for rattan trade between Myanmar and China. We export raw rattan through the Muse and Lweje border gates to China. Maritime trade will increase costs as finished rattan producers in Yangon cannot buy larger volumes of raw materials than border traders. Meanwhile, Chinese traders in border areas are purchasing even low-quality raw materials. Therefore, we are facing unfair market competition. After China’s traders halt rattan purchase, we can purchase as much as we wish.
Q: How many factories do you run?
Ans: I have two factories for framing and webbing. We have our raw materials and finished products stockpiled in the factories for the export market.
By Kyaw Zeya(Translated by EMM)