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Çınar et al. (2015). “An overview of worldwide competitiveness: A case study of the Turkish furniture industry”

AN OVERVIEW OF WORLDWIDE COMPETITIVENESS: A CASE STUDY OF THE TURKISH FURNITURE INDUSTRY

Hamza ÇINAR1*

, Nihat DONGEL1, Musa ATAR

1 , Hayrettin MERIC

2,

1 Gazi University, Technology Faculty, Wood Products Industrial Engineering Department,

06500, Beşevler, Ankara, Turkey

2 Adıyaman University, Technical Science, Material Science and Processing Technology Department,

Adıyaman, Turkey

Key words Abstract

Worldwide Furniture Trade,

Turkish Furniture Industry,

Competitiveness.

The Turkish furniture industry has become a branch of information and capital weighted manufacture by the accession of medium and large scale enterprises in the 1990s to traditionally operating workshop type, small scale enterprises. Today, the sector has become the production capacity of 10 billion Dollars with the exportation of 2,421 billion to 210 countries and the importation of 0,991 billion from 122 countries. The Turkish furniture industry has no foreign trade deficits with gradually increasing export value since 2001. Being in a quick development and change period, the sector presents a potential in domestic and foreign markets in the direction of factors such as brands, quality, small–large scale enterprises in the sector, geographical position, general growth policy of the Country, young population, improvement of national income per capita etc. This study discusses and gives an overview of worldwide furniture competitiveness with particular reference to the Turkish furniture industry and looks for possibilities for its ranking in the worldwide furniture trade in case of reaching 2023 targets. As a result of the study, the Turkish furniture industry shows a strong possibility for entering among the first 10 top furniture producers in the World and the first 5 in Europe with the expectation of 25 billion dollars production value and 10 billion dollars exportation value in 2023.

Corresponding author: [email protected]. Gazi University, Technology Faculty, Department of Wood Products

Industrial Engineering Department, 06500 Besevler, Ankara, Turkey.

1. INTRODUCTION

Furniture production is made in the sector in a wide range such as panel furniture, solid

furniture, sofa, seating group, modular furniture (kitchen, bathroom, office, and bedroom),

garden furniture, furniture sections and parts, vehicle furniture, hospital furniture, hotel

furniture, accessories oriented to national and international markets, the usage of imported

product/materials is limited. In this aspect, it is amongst the sectors with high added value.

Being one of the significant sectors in Turkey with highest employment capacity, furniture

industry is distributed in the countrywide to any province and district. Economical and social

development in Turkey after 1980s has increased the demand for quality, functional and

modern furniture especially in the big Metropolises and such development has accelerated the

economy the country.

mailto:[email protected]

Proceedings of the 27th International Conference Research for Furniture Industry September 2015, Turkey

Çınar et al. (2015) “An overview of worldwide competitiveness: A case study of the Turkish furniture industry”

Page | 496

National income per capita in Turkey was 6.500 dollars in 2005 in current prices and it has

become 11.318 dollars in 2013 with an increase of %74. In parallel, the share of furniture

sector in the national income has increased in amount and provided the achievement of

investments required for the growth of the sector. Furniture is ranked in the fifth line with a

share of 5, 9 % within the cost items of household in terms of its share in expenses according

to the TUIK research “incomes and living conditions”. Large-scale enterprises in the sector

benefit from advanced manufacturing technologies. Activities with the participation of large

scale enterprises for research and development, design and branding have become the most

important elements of the competition. These indicators are directly related to the

development of the sector.

2. RESEARCH AND MEDHODOLOGY

This study discusses and gives an overview of worldwide furniture competitiveness with

particular reference to the Turkish furniture industry and looks for possibilities for its ranking

in the worldwide furniture trade in case of reaching 2023 targets. The data was obtained from

ITC, Trademap, Trade statistics for international business development and Turkish Statistics

Institute.

3. FINDINGS AND DISCUSSIONS

3.1. Number of enterprise and employment in the Turkish furniture industry The number of enterprises and employment levels in the furniture industry by years follows a

bumpy course. The number of enterprises and employment within the furniture sector are

given in Table 1.

Table 1. Number of Enterprise and Employment

TUIK 2014

According to Table 1, there are over 39.000 enterprises and almost 160.000 employees. The

rate of employees to general employment is about 5,09 % while the rate of enterprises to

general production is 11,59 %. The numbers of initiatives have provided a significant increase

from 106 thousand to 159 thousand last seven years; industry employment has increased from

35 thousand to 39 thousand.

3.2. Furniture Production and Consumption in Turkey The development of stable growth throughout the Country is an important movement for the

industry; also the significant increase in residential and office buildings is thought to trigger

Years

Parametres 2006 2007 2008 2009 2010 2011 2012

Number of enterprises 35.854 32.994 34.438 34.427 31.089 35.883 39.036

Rate to general production % 11.57 10.42 10.71 10.73 10.36 10.77 11.59

Employees 106.807 106.407 115.898 97.105 120.580 140.772 159.246

Rate to general employment % 4,51 4.32 4.57 4.29 4.70 4.95 5.09

Furniture production average Country production average

Number of enterprises 39.036 4,07 9,2

336.862

Number of employees 159.246 3.126.540



Page | 497

the production of significant growth. Turkey furniture production and consumption is given in

Table 2.

Table 2. Turkey Furniture Production and Consumption (Million TL)

TUIK, Work Statistics, 2013

* Data related to furniture consumption was determined by calculating the import and export value through

production values.

According to last seven years average, the country consumes 94% of the furniture produced in

the Country. Changes of consumer habits, needs and the increase of income level directly

affect the consumption which pushes the production. According to the report of MUSIAD,

2013; in recent years, the frequency of the consumers for changing furniture is claimed to

increase. This trend is said to be one of the factors affecting the furniture consumption. The

frequency of furniture changing of consumer is given in Figure 1.

Figure 1. Furniture Changing Frequency (MUSIAD 2013)

According to Figure 1, it can be argued that 85% of consumers change their furniture in 3 and

10 years. In spite of being this ratio quite high, consumers’ decision possibly affects

production and consumption; however, when considered as the environmental life circle

assessment, furniture should have a longer life circle.

0

5

10

15

20

25

30

35

1-3 Years 3-5 Years 5-7 Years 7-10Years

10-15Years

over 15years

F 5 23,7 33,8 27,3 9,4 0,7

5

23,7

33,8

27,3

9,4

0,7

pe

rce

nta

ge

furniture changing frequency

NACE CODE

Years 31

Indicators 2006 2007 2008 2009 2010 2011 2012

31 Production 7.322 8.150 9.811 8.436 10.486 14.074 15.963

31 Consumption * 7.064 7.798 9.217 7.820 9.810 13.357 14.612

Consumption rate % 96,4 95,6 93,9 92,6 93,5 94,9 91.5

Last 7 years average

%

94.05



Page | 498

3.3. Capacity Utilization in the Turkish Furniture industry Evaluating the production capacity ratios, it is observed that the sector has difficulties to

operate in full capacity in last years. The ratios of capacity utilization for furniture production

are provided in Table 3.

Table 3. Rates of Furniture Production Capacity

Industry Capacity rates (%)

Years

Total

Average 2006 2007 2008 2009 2010 2011 2012 2013

Furniture 71.6 70.9 68.5 66.9 70,4 72.6 69.8 71.4 70,2

Annual Change - - 0.98 -3.50 -2.39 4.93 3.03 -4.01 2.24

General

Production

81.0 80.2 76.7 65.2 72.7 75.4 74.2 74.6 75

Annual Change - 0.99 -4.56 -17.6 10.31 3.58 -1.61 0.53

TCMB 2014.

The sector operates with a production capacity under 70 % in the direction of the last 8 years.

This condition is under the production capacity level of competitive countries which Turkey

competes. Reasons for the sector not being able to operate in full capacity could be many

reasons but raw material, design, marketing, organizational weakness, lack of advertisement,

qualified labor force, finance, presence of extremely small and non-conscious actors,

problems concerning the employees seem to be important.

3.4. Foreign Trade Balance

Table 4. The Foreign Trade Balance of Turkish Furniture Industry

Years (1.000 USA Dollars)

Factors 1997/2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Total

Export 2.506 798 1.032 1.332 1.153 1.414 1.658 1.898 2.237 2.422 12.134

Import 1.630 540 680 738 537 738 941 817 968 992 7.592

Trade Balance 1.070 258 352 594 616 676 716 1.081 1.268 1.430 4.542

Balance Rate % 43 32 34 45 53 50 47 57 57 59 63

TUIK, 2015, DTM 2012.

When the last 18 years of Turkey’s foreign trade is analyzed, a sum of 12 billion dollars in

export and of 7.5 billion in import were made with the positive trend of 4,5 billion for export.



Page | 499

Figure 2. Turkey Furniture Current Account Deficit Trend

With an exception of the current deficit between 1997 and 2000, Turkey furniture trade

balance is followed by a positive trend since the year 2001. The sector in 2014 has a sum of

1,4 billion dollars net foreign currency and has 4.5 billion dollars over the last 18 years. The

Turkish furniture sector has become one of the rare sectors in the trade of country without

giving foreign trade deficit in the direction of its last 14 years performance. Excluding 2009,

the regular increase in the annual export and import ratios attracts attention and export

increase is greater than import increase. However, especially, garden/exterior furniture, which

is brought from China and other Far East countries, may cause an increase in import.

3.5. Status of the Sector in Worldwide 3.5.1. World Furniture Production and Consumption World furniture production was about 284 billion and consumption about 273 billion dollar in

2004. After ten years, these values are almost double. The production was 446 billion and the

consumption 440 billion dollar in 2013. In the last ten years, a total volume of production of

3.5 trillion and consumption of 3.1 trillion dollar is reached. These numbers indicate the

future expectation with an estimated value of 1 trillion in 2030.

According to Table 5 and 6, China produces a quarter of the world furniture with 112 billion

dollars in volume production and consumes 75 billion dollars in its domestic market.

However, China has over 36,7 billion dollar production surplus. The other countries with

production surpluses, respectively; Italy (14 billion), Poland (6,6 billion), Vietnam (4,2

billion), Canada (1,4 billion), Germany (1 billion), Brazil (0,6 billion) and Turkey (0,4 billion

) are in the list. The second biggest producer is USA with the volume of 68,5 billion dollar.

However, almost every year the State imports furniture over the production.

-120%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

Furniture Current Deficit



Page | 500

The values for furniture production and consumption in Table 5, the distribution of production

and consumption for countries are given in Table 6.

Table 5. Production - consumption Table 6.Worldwide distributions

Years

Last ten years Billion $

Countries

2013 Billion $

Production Consumption Production Consumption Trade

Value Value Value Share Value Share Balance

2004 284 273 China 112,5 25,2 75,8 17,2 36,7 2005 291 297 USA 68,5 15,3 88,4 20,0 -19,9 2006 325 318 Italy 35,0 7,8 21,0 4,7 14 2007 340 355 Germany 30,5 6,8 29,5 6,7 1 2008 350 386 Japan 14,3 3,2 16,6 3,7 -2,3 2009 352 340 France 14,1 3,1 16,9 3,8 -2,8 2010 341 353 Canada 14,0 3,1 12,6 2,9 1,4 2011 376 403 England 13,5 3,0 21,1 4,8 -7,6 2012 434 421 Poland 13,0 3,0 6,4 1,5 6,6 2013 446 440 Brazil 9,0 2,0 8,4 1,9 0,6

- - - Vietnam 8,4 1,8 4,2 0,95 4,2 - - - Turkey* 7,2 1,6 6,8 1,3 0,4 - - - O. developed

Countries

68,0

15,2

80,0

18,2 -12 - - - O. developing

Countries

38,0

8,5

53,4

12,1 -15,4 Last 10

Year

3,539 3,146 Total 445,8 100 440,0 100 5,8

Source: Csil 2014, TUIK, 2013.

*Turkey values are processed according to TUIK 2014, and 1 dollar was exchanged to 2,25 Turkish lira.

The countries, whose production is under consumption, are the USA (- 20 billion dollar)

England (-7,6 billion), Japan (-2,3 billion) and France (-2,8 billion), the other developed

countries (-12 billion) and other developing countries (-15,4 million). The volume of Turkish

furniture production is 7,2 billion dollars and the country takes the approximate rate of 1,6 %

of world furniture production levels. For targets of the country for 2023, furniture production

is predicted to increase the volume of 25 billion dollars (TOBB 2014). World’s furniture

consumption increases every year in parallel to production. Although the major consumers are

mostly from the developed countries, the developing countries and undeveloped countries are

also effective consumers of furniture. Worldwide furniture production and consumption

balance is given in Figure 3.



Page | 501

Figure 3. Worldwide Furniture Production and Consumption Balance

3.5.2. World Furniture Trade In 2009, a total of 227 billion dollar was in Worldwide trade; 115 billion for export and 112

billion dollar for Import. In the following years, positive trend continued and became 326

billion dollar in 2014. The first 25 countries accounted for approximately 90 % of this amount

in exportation and 84% in importation. Figure 4 gives five years export and import values.

Figure 4. World Furniture Export and Import Trend

World’s furniture trade realized a meaningful growth until 2009 after 2% decrease in 2001.

However, the global crisis experienced in 2009 caused a definite decrease of 20% and stable

0 5 10 15 20 25 30

China

USA

Italy

Germany

Japan

France

Canada

England

Poland

Brazil

Vietnam

Turkey*

Other developed countries

Other developing countris

Production and Consumption Balance

Consumption

Production

112.204.650 131.922.240

149.127.670 159.713.518 170.524.239

115.649.115

134.037.034 147.783.206 150.845.658

159.954.384

0

50.000.000

100.000.000

150.000.000

200.000.000

250.000.000

300.000.000

350.000.000

2009 2010 2011 2012 2013

Worldwide furniture trade



Page | 502

re-growth is attained following the year 2010. The values on the basis of furniture groups, the

ranking of top 25 and the position of Turkey is given below:

Worldwide furniture exporters, the position of Turkey are given in Table 7.

Table 7. Furniture exporters, balance, increase and share

No

(Product groups for 9401-9404)

Years (1.000 $)

Balance

(1.000 $)

Increase

%

World

Share %

Exporters 2011 2012 2013 2014 2013-14 2013-14 2014

1 China 45.188.795 56.736.056 60.082.540 60.631.557 549.017 0,9 33,5

2 Germany 14.479.882 12.698.414 13.622.048 14.198.055 576.007 4,2 7,8

3 Italy 11.792.773 10.887.679 11.683.551 12.087.072 403.521 3,5 6,7

4 Poland 9.394.828 8.695.695 9.737.364 11.116.976 1.379.612 14,2 6,1

5 USA 6.986.857 7.799.349 8.153.126 8.726.095 572.969 7,0 4,8

6 Mexico 4.909.452 5.959.697 6.681.857 7.719.086 1.037.229 15,5 4,3

7 Viet Nam 4.264.794 4.946.954 5.513.854 6.542.727 1.028.873 18,7 3,6

8 Canada 3.888.263 3.989.244 3.950.644 4.159.288 208.644 5,3 2,3

9 Czech Rep. 2.811.956 2.617.467 3.102.900 3.636.123 533.223 17,2 2,0

10 France 3.019.958 2.815.501 2.961.023 2.965.059 4.036 0,1 1,6

11 U.Kingdom 2.204.067 2.188.972 2.419.880 2.543.967 124.087 5,1 1,4

12 Denmark 2.271.070 2.298.557 2.396.772 2.322.708 -74.064 -3,1 1,3

13 Malaysia 2.589.447 2.663.808 2.352.736 2.791.500 438.764 8,6 1,5

14 Sweden 2.595.894 2.443.271 2.246.708 2.773.854 527.146 23,5 1,5

15 Turkey 1.658.389 1.899.017 2.237.302 2.421.905 184.603 8,3 1,3

16 Netherlands 2.229.128 2.239.914 2.224.856 2.522.473 297.617 13,4 1,4

17 Romania 1.841.658 1.774.584 2.193.981 2.417.241 223.260 0,2 1,3

18 Spain 2.023.149 1.824.177 2.169.064 2.293.176 124.112 5,7 1,3

19 Portugal 1.501.806 1.753.855 1.998.193 1.818.269 -179.924 - 9,0 1,0

20 Indonesia 1.767.244 1.809.350 1.787.595 1.826.880 39.285 2,2 1,0

21 Belgium 2.128.581 1.864.401 1.632.855 1.844.602 211.747 13,0 1,0

22 Lithuania 1.231.120 1.413.041 1.571.480 1.806.288 234.808 14,9 1,0

23 Austria 2.203.342 1.800.757 1.531.106 1.661.300 130.194 8,5 0,9

24 Taipei,

Chin 1.459.665 1.541.785 1.511.210 1.739.308 228.098 15,1 1,0

25 Hungary 1.328.388 1.246.270 1.475.204 1.484.516 9.312 0,6 0,8

List total 135.770.506 145.907.815 155.237.849 164.050.025 8.812.176 5,7 90,7

World total 131.922.240 149.127.670 159.713.518 180.881.443 21.167.925 13,3 100,0

Source: Trademap 2015.

On the basis of product description, the first 25 country among 227 countries have realized 90

% of 180 billion dollars in the market. According to the evaluations of the last years,

exportation has tendency to increase in total general total. The first five exporters in the list

are China, Germany, Italy, Poland and USA. The exportation of Demark (-3,1) and Protugal

(-9) are decreasing countries for exportation in 2014.



Page | 503

Turkey is among the growing countries providing 8,3 % increase and 1,3 share in the world

furniture market. Turkey’s export is 2,421 billion dollars according to Trademap data and is at

15th

position in rank. Although Turkey’s share and location in the general ranking recently

increases, it is not at the desired level. About 2,421 billion dollars volume and 1,3% share out

of 180 billion dollars export market is low for the Turkish furniture sector. Considering the

results in the world’s furniture export such as China factor and decreasing export values of

European furniture producers, the production centre can be said to shift eastwards. However,

excessive increase in workmanship prices influences the power of at China to establish a

competitive price although its decisiveness continues in the last years.

Table 8. World furniture import and the position of Turkey

No

(Product groups for 9401-9404)

Years (1.000 $)

Balance

(1.000 $)

Increase

%

World

Share %

Importers 2011 2012 2013 2014 2013-14 2013-14 2014

1 USA 35.971.951 39.514.951 40.079.580 45.642.398 5.562.818 13,9 26,3

2 Germany 15.761.443 14.906.878 15.327.486 16.934.531 1.607.045 10,5 9,8

3 U. Kingdom 7.553.529 7.528.247 7.911.207 8.958.171 1.046.964 13,2 5,2

4 France 9.061.429 8.562.490 7.997.735 8.419.908 422.173 5,3 4,9

5 Canada 6.349.793 6.856.226 6.808.097 6.977.639 169.542 2,5 4,0

6 Japan 6.338.859 7.016.666 6.926.799 7.008.950 82.151 1,2 4,0

7 Netherlands 3.969.231 3.629.918 3.538.964 4.108.224 569.260 16,1 2,4

8 Switzerland 3.562.060 3.413.813 3.621.424 3.656.746 35.322 1,0 2,1

9 Australia 2.927.065 3.072.973 3.140.760 3.367.077 226.317 7,2 1,9

10 Belgium 3.514.258 3.154.243 3.829.967 3.451.384 -378.583 -9,9 2,0

11 Russian Fed. 2.765.344 3.398.591 3.592.388 3.292.427 -299.961 -8,3 1,9

12 Austria 3.047.637 2.846.929 2.640.656 2.866.242 225.586 8,5 1,7

13 U.Arab Emir 1.742.003 2.271.443 2.739.530 2.636.253 -103.277 -3,8 1,5

14 Spain 3.369.447 2.539.713 2.633.321 3.038.204 404.883 15,4 1,8

15 Italy 2.909.323 2.390.679 2.453.075 2.726.664 273.589 11,2 1,6

16 Mexico 2.039.239 2.404.233 2.771.715 2.884.048 112.333 4,1 1,7

17 China 2.251.831 2.334.421 2.547.163 2.796.026 248.863 9,8 1,6

18 Saudi Arabia 1.617.088 2.232.349 1.710.634 2.473.115 762.481 44,6 1,4

19 Norway 2.046.310 2.159.512 2.130.631 2.232.563 101.932 4,8 1,3

20 Sweden 2.301.779 2.118.720 2.230.207 2.365.598 135.391 6,1 1,4

21 Poland 1.521.368 1.334.179 1.520.232 1.887.490 367.258 24,2 1,1

22 Korea, Rep. 1.608.965 1.587.914 1.736.861 2.052.999 316.138 18,2 1,2

23 Czech Rep. 1.470.792 1.429.765 1.639.929 2.033.194 393.265 24,0 1,2

24 Denmark 1.572.909 1.521.567 1.448.381 1.703.529 255.148 17,6 1,0

25 Hong Kong 863.316 884.044 2.242.746 943.840 -1.298.906 -57,9 0,5

27 Turkey 941.394 817.323 968.656 991.709 23.053 2,4 0,6

List total 127.078.363 129.927.787 134.188.144 145.448.929 11.260.785 8,4 83,9

World total 150.135.064 153.020.087 159.843.064 173.398.927 13.555.863 8,5 100,0

Trademap 2015.



Page | 504

On the basis of product description, the first 25 country among 231 countries have realized

83,9 % of 173 billion dollars in world furniture import. The first five importers in the list are

USA, Germany, United Kingdom France, and Canada. These countries realize the half of the

world furniture import. The import of Turkey has been increased (2,4 %) in 2014 with the

volume of 992 million dollars. The position of Turkey is 27th

in the list.

3.6. Environmental Analysis Although Turkish furniture sector consists of 1,6 % share of the world’s furniture production

with its total production capacity, it is not at the desired level and goal. The sector has

exported 2.421 billion dollars furniture to 203 countries by 2014 and is located 15th

in the

world ranking and 9th

in European ranking. It has imported furniture with a value of 992

million dollar from 115 countries and is located 2tth

in the world ranking and 17th

in European

ranking.

However, the share of Turkey’s export for furniture is low in the worldwide perspective. The

country uses its domestic market more than international markets. A clear example of this

could be the trade for neighboring and Arabic countries. Although there are markets of

neighborhood with the capacity of 9.7 billion and Arab countries around Turkey, the sum of

Turkish furniture export is extremely found low. Particularly, it is seen that Turkey do not

benefit from Russia, Saudi Arabia, U.A.E and Austria.

Turkey's export to these neighboring and Arabic countries is for 1.5 billion dollar and

corresponds to the rate of 11.2% of consumption of these countries. Exportation, in total in

2013 compared to the previous year, though prone to increase their imports of furniture to

meet the Arab countries with the average share of 11% of the total imports of these countries

is rather low for the target of Turkey’s furniture industry.

The most striking countries are Iraq and Libya. Turkey exports half of their importations. The

countries with highest capacity of import are Saudi Arabia with 1,8 billion and U.A.E 2,7

billion. However, Turkey shares 4,6% for Saudi Arabia and 1,5% for U.A.E. Consequently,

the market size of Arabic countries and Near Neighbors is 18 billion dollars. The country

achieves only benefit of 1,5 billion dollars. Turkey should have policies to develop the trade

with the Arabic and neighborhood countries to get the targets of 2023.

In order that the sector reaches its expectations in the future, improvement of the commercial

relations and increase of market share with the neighboring countries, Middle East, Africa and

Arab countries and nearest neighbors shall provide positive contribution to the Turkish

furniture export.

The existing values show that the world’s furniture sector has an increase trend. General

perspective of the last 14 years has put forth the growth potential of Turkish furniture sector

with its production volume and export volume, but this is not at the desired level. Turkey

must solve her problems and increase the production capacity and competitive power to get

her share in the world furniture market which is expected to exceed the volume of 1 trillion

USD by 2030. There are things which must be done and policies must be produced on this

subject both by the sector and the government.



Page | 505

3.7. Analysis of Competitiveness of the Sector The brief assessments, developments and competitiveness of Turkey’s furniture industry are

given Table 9.

Table 9. Competitiveness Indicators for Furniture Production Industry

Indicators

Decisive competitive factors

Raw Material The existence and quality of the raw material resources,

Sub-contracting/Sub-industry

Production Raw material costs,

Organized producing regions,

Technology Activities

Product standards,

Product quality,

Branding and image,

Design Capacity,

Environmentally friendly production,

Marketing – Sales

Logistics infrastructure,

Distribution network,

Transportation costs,

Promotion and fairs

Financial Structure

Profitability

Credit facilities and costs,

Investment and export incentives,

Human Resources The presence of trained and qualified human resources,

Labor and employment law and regulations,

Market and Industry

conditions

Import and domestic surveillance,

Fair and ethical competition conditions,

Raw Material: The report of Wood and Forest Products Exporter Unions (2011) states that

daily 30 thousand m3, annually 15 million m

3 industrial woods is needed in the furniture

sector. 9 million m3 of this quantity is met from the domestic market and the remaining part

via importation. The sector used 11 million m3 industrial woods in 2011 only in the

production of panel furniture and it is thought that domestic industrial wood production must

be increased to at least 20 million m3 to reach the goals of 2023 by considering the market

species and efficiency of the forests. While particle board / chipboard and MDF is produced at

Turkey with advanced technology, the problems encountered in the supply of the raw material

required for the production influences the production, decreases the capacity ratios and this

condition affects the pricing. Industrial wood is cheaper in rates up to 50-60 % in foreign

markets than Turkey and this becomes prominent as a factor which continuously weakens

competition especially in export. Competitive market conditions are not formed in our

country on the subject of raw material and a significant part of forest resources are directly

used as fuel wood. In addition, use of wood as fuel due to reasons such as decrease in the

quality of industrial wood as a result of wrong wood chopping, dote as a result of wrong

storage, decay is an important problem.

Sub-contracting/Sub-industry: In furniture industry, sub-industry completely works under

the orientation of main industry and isn’t able to be released from serving in the logic of

contract producing. This situation does not make long term transformation possible in the

sector and the development of the understanding of making value added works. Although a

bottle neck is not expected on the subject of input in all sub-industry products (textile, iron,



Page | 506

glass, etc.) used in the furniture sector, it seems possible to experience some troubles in the

future if measures are not taken in industrial wood raw material. In our country which races

against world’s giants on the subject of textile, which is in first ranks in steel production and

which leads on the subject of glass, predominant import of semi manufactured products of

such main sectors in the production of furniture becomes a contradiction and means that there

is a miscommunication between the sectors. Quality accessory materials which are the further

needs of the furniture industry are predominantly brought from abroad and domestic sub-

industry is not effective in this field.

Technology Activities: Large-scale enterprises in the sector use advanced manufacturing

technologies. Product standards, quality, brands and design considerations gain value every

year in the sector. However, studies for eco-friendly production are not yet at the desired

level. The technology, research and development, design and branding have become the most

important elements for the competition with the involvement of large-scale enterprises in the

furniture industry

The number of patents, trademark and design registrations are important indicators for high

value-added production on the way of becoming an innovative and branding sector. For the

sector in 2000, the numbers are 52 for patents, 200 for trademarks and 402 for design

registrations. For general production, the numbers are 720 for patents, 10.736 for trademarks

and 1.679 for design registrations. It is possible to say that the numbers are significantly low

in comparison to the developed countries. However, the number of 2013 shows positive

changes for both furniture and general production of Turkey. In the sector, the number of

patents has increased to 317, trademarks to 2,663, design registrations to 1.719. These

parameters, which tend to increase steadily in the recent years, are expected to have positive

impact on the sector’s competitiveness in national and international markets (TOBB 2014).

Financial Structure: Capital / finance shortage of the sector and high credit costs are

included among important problems. Since the enterprises are forced to provide credits from

money markets, especially commercial banks in suitable conditions, they usually finance their

activities from their equities. As a result of this, shortage of operating capital is continuously

experienced.

Marketing – Sales: Fairs prepared by the sector directly affect the market effectiveness,

marketing and advertisement. On the other hand, within domestic market, the furniture

demand increasing due to population increase at Turkey, shortening of furniture replacement

period caused by getting richer, urbanization keeps the domestic market continuously in

motion and alive. However, this condition is not valid in the whole sector. The channels

which provide to get the experience, behavior and voice of the customer in market

knowledge, brand perception of the consumer, furniture replacement frequency, and many

other matters cannot be used effectively. This situation is rather important both from the point

of the improvement of the sector and from the point of protecting the consumer rights,

consumer satisfaction and preventing unfair competition.

Human Resources: Looking at the general structure and basic problems of the sector, one of

the most important problems shows up that the new generation is not qualified for the needs

of time in the field of general education and occupational education and becomes insufficient



Page | 507

to develop creative ideas. The inadequacy in education is accompanied by the lack of

qualified labor force, employment and experience. This situation adversely influences the

improvement of sector and competitive power. The problems in occupational education are

evaluated as the schools, employees and managers.

Market and Industry conditions: It is possible to talk about a furniture sector in our country

which is open to development and which presents potential. Today Turkey is regarded to be

able to compete with countries such as Germany, Italy, and Poland which are seen as

powerful furniture producers of Europe with its number of enterprises, available human and

natural resources. As stated in this study, Turkey is among the top 12 manufacturing

countries and the 15th

exporter and 28th

importer of furniture in the world.

The sector is thought to be a strong power both in European furniture market and world

market as a result of putting on the agenda the problems handled in the previous section and

finding suggestions to them by the related sector organizations and public bodies.

4. CONCLUSIONS

The Turkish furniture sector is among the 12 producers with the share of 1,6 % world

furniture production, the 15th

in the world and 9th

in European ranking with the export

capacity of 2,422 billion dollar to 203 countries and the 27th

in the world and 17th

in Europe

with import capacity of 926 billion from 115 countries. The sector puts targets to be among

the 10 exporters in the World and 5 exporters in Europe with the 10 billion dollar export

capacity by the year of 2023.

In the light of the data compiled in this study, the sector is an effective industry both national

and international markets. The sector is able to get the targets of 2023 and can have better

positions in the international furniture market by increasing the existing potential and

effectiveness of promotional activities and should understand the importance of the strategic

position of one to one relationship and continuity.

In conclusion, the sector, which keeps its goals extremely high for 2023, has to increase its

production capacity and market shares besides protecting its present status. The sector must

reinforce its production network in the direction of the expectations of 21st century with the

extents of new formations, smart furniture, electro-furniture, environment friendly furniture,

human and environment awareness.

Acknowledgements This work is a portion of the Sector Report of the Turkish Furniture Products Assembly, the

Union of Chambers and Commodity Exchanges of Turkey (UCCET / TOBB) and prepared by

Hamza ÇINAR. We would like to record our sincere thanks to TOBB.



Page | 508

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Corresponding author:

Hamza ÇINAR

Gazi University, Technology Faculty, Department of Wood Products Industrial Engineering

Department, 06500 Besevler, Ankara, Turkey.

E-mail: [email protected]

© Author(s) 2015. This article is published under Creative Commons Attribution (CC BY)

license

mailto:[email protected]

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