www.ChinaSourcingReports.com

CaviteMANILA

NegrosOccidental

Cebu

Bulacan

Pampanga

Philippines supplier profi lesDetailed profi les of 20 suppliers with verifi ed manufacturing and export credentials

Product gallerySpecifi cations and full-colorimages of 163 top-sellingexport products ranging from beds to beach chairs

Industry trendsCoverage of current issues,plus insights into supply centers, products and pricing

December 2013US$150

Essential sourcing intelligence

Global Sources is off ering this series of Developing Country Sourcing Reports as part of its corporate social responsibility undertakings in partnership with the Hinrich Foundation, a philanthropic development organization whose mission is promoting sustainable global trade.

The aim is to give international buyers new sourcing opportunities from experienced exporters, generating orders and creating lasting jobs in developing economies.

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FURNITURESupplier capability in the Philippines

Objective, methodology & scope

Key findings

Executive Summary

In this report

• 18 in-depth company profi les• 163 top-selling export products• Supplier demographics• Supplier survey• Industry statistics and charts

This Philippines Sourcing Report is part of a series designed to provide buyers with information on new products from export manufacturers in supply markets that specialize in handmade merchandise.

The Developing Country Sourcing Report series is part of Global Sources’ corporate social responsibility initiatives. It is offered in conjunction with the Hinrich Foundation, whose mission is promoting sustainable global trade. One of its objectives is to help create jobs in developing Asia through export promotion.

To produce this report, large, midsize and emerging manufacturers, all with substantial export experience, were surveyed. The selection of suppliers is designed to reflect the composition of the industry in the Philippines in terms of geographic location, materials used and range of products offered.

The furniture industry in the Philippines anticipates favorable prospects in the coming year as the recovery of the US economy results in burgeoning demand. In addition to this key destination, growing revenue from alternative markets such as the Middle East and South America is a major factor driving the sector.

The industry emphasizes the midrange and upscale segments to sustain development and avoid intense competition in the low end with neighboring sourcing centers, particularly China. Because of the popularity of such models in emerging markets, many manufacturers are able to maintain their profit margins.

A number of advantages benefit the sector. The most important of these is the steady availability of plant-based inputs such as bamboo and Manila hemp. Strong OEM capability is another strength possessed by the industry.

1. A crucial challenge facing the industry is the government’s adoption of stringent policies on the sourcing of locally harvested wood. Several enterprises are compelled to import lumber because of this directive, pushing up raw material costs by as much as 20 percent. The lack of a certification system that complies with EU requirements also presents a considerable difficulty to makers with clients in the bloc.

2. Due to obstacles in timber procurement, product design focuses on the utilization of natural materials such as bamboo, rattan and Manila hemp. Releases also feature elements that enhance visual appeal, including complex carvings and woven patterns.

3. Overseas revenue in the coming year is expected to generally climb,

with more than two-thirds of featured companies projecting an improvement in shipments. Most will continue to concentrate on the US or the EU, although a growing number are expanding their reach in alternative markets.

4. The majority of manufacturers featured in this report expect to keep prices stable over the next six months to maintain competitiveness and retain buyers. A considerable minority will raise quotes to counter escalating production expenses. The rate of increase is generally seen to be within 10 percent.

5. Metro Manila and the provinces of Cebu and Pampanga are the key supply hubs in the country. Makers in these areas specialize in pieces made of plant-based inputs and metal and marble.

For in-depth profiles, our researchers visited the facilities of each company and interviewed senior executives who discussed their recent performance and provided forecasts for the next 12 months. All other makers in this report were either visited or contacted by phone.

In each case, companies were required to answer specific questions designed to verify their manufacturing and export credentials, including a breakdown of exports by product type and market. Suppliers also participated in a survey designed to provide insight into the industry.

This report covers different types of furniture available in the Philippines, including living room, dining and kitchen, bedroom, bar and bistro, and outdoor pieces. Each product category has its own price guide that describes features of the low end, midrange and high end.

The Industry Overview section discusses key issues affecting export manufacturers. It provides insight on the composition of the industry and elaborates on the important supply centers within the Philippines.

The Products & Prices section details the features and price ranges of furniture. It also examines the design and manufacturing processes, main materials used, and sourcing centers where components are procured.

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4 Philippines Sourcing Reports

CONTENTS

Disclaimer: Any recommendation contained in this report may not be suitable for all investors or businesses. Moreover, although the information contained in this report is obtained from sources believed to be reasonably reliable, the accuracy or completeness of such information cannot be guaranteed. The author and the publisher of this report (and the publisher’s affi liates, agents, sales representatives and service contractors) do not make any representation or warranty whatsoever (whether express or implied) in relation to any of the contents of this report (including any information, opinion, recommendation or conclusion contained in this report) (collectively, “Contents”), whether as to the accuracy, completeness, quality, fi tness, suitability or reliability of such Contents (or any portion thereof ) or otherwise, and shall not be liable under any circumstances whatsoever for any error, omission, defect or defi ciency in, or for any use of or reliance on, such Contents (or any portion thereof ).

All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. Products that are not the specifi c topics of editorial articles are shown for illustrative and/or demonstrative purposes only. We, our affi liates, and our affi liates’ respective directors, offi cers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof ) which infringe on any intellectual property or other rights of a third party.

Copyright 2013 Trade Media Limited. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Trade Media Holdings Limited and Trade Media Limited is prohibited.

Published by Publishers Representatives Limited (on behalf of Trade Media Limited)4th Floor, Century Yard, Cricket Square, Elgin Avenue, P.O. Box 32322 SMB, George Town, Grand Cayman, Cayman Islandsc/o 22/F Vita Tower, 29 Wong Chuk Hang Road, Aberdeen, Hong Kong

ISBN 978-988-8245-00-0

Contents

EXECUTIVE SUMMARY 3 Key fi ndings Objective, methodology & scope

INDUSTRY OVERVIEW 11 Exports

Products & prices 13 Production & export statistics Typical parts & components Price guides

Supplier survey 20 Export prices Export sales Export markets Major challenges R&D focus

SUPPLIER PROFILES 23 Supplier matrix: Comparison of supplier location, sales revenue & export capability Profi les of 18 verifi ed suppliers

PRODUCT GALLERY 67 Living room furniture Dining & kitchen furniture Bedroom furniture Bar & bistro furniture Outdoor furniture

CONTACT DETAILS 97

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CONTACONTA

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Industry Overview

Industry Overview

ExportsValue$ million

Value by month$ thousand

Source: International Trade Centre

J F M A M J J A S O N D

35

25

20

15

10

5

30

2010 2011 2012

$161 $160

$151

Furniture suppliers in the Philippines maintain an optimistic outlook on exports despite a slight drop in outbound shipments last year.

Although foreign revenue shrunk roughly 1 percent to $160 million in 2012, domestic makers are confident of registering higher turnover in 2013 because of robust sales in emerging destinations. Estimates point to growth reaching 5 percent amid strong demand from the Asia-Pacific region, particularly Southeast Asia. Shipments to Indonesia jumped from $7.7 million to $13.2 million, making it the industry’s second-biggest market last year. Earnings from deliveries to Thailand expanded from $1.3 million to $2.8 million. Income from Singapore soared 40 percent to $2.2 million.

The US remains the line’s largest importer, with deliveries accelerating 8 percent to $77.3 million last year. After Indonesia, Japan rounds out the top three, contributing $12 million to foreign sales. Other key destinations are the UK, Germany and the UAE.

Exports to China and Australia each went down to $2.6 million in 2012, a decline of 78 and 28 percent, respectively. Sales to South Korea dipped 73 percent to $1.1 million. The drop was blamed on intensifying price competition in the region, particularly from suppliers in Vietnam and Indonesia. Makers in both sourcing hubs are able to reduce quotes because of lower production costs.

With these developments, domestic enterprises are expanding their clientele in emerging markets such as South America and the Middle East to make growth conducive. Saudi Arabia, the UAE, Brazil and Panama are cited as the top targets for the year ahead.

Stable domestic demand is also fuelling the outlook of manufacturers.

Companies have been receiving more orders for customized pieces from hotels, resorts and department stores. Local customers are usually based in Metro Manila, and the provinces of Cebu, Bohol and Palawan, where resorts frequented by tourists are mostly located.

Competitive advantagesOne of the industry’s strengths is the ready availability of natural materials such as bamboo, rattan, Manila hemp and water hyacinth. As such, companies no longer need to import these components, allowing them to produce models at competitive prices.

Estimates show that there are 52,000 hectares of land planted with bamboo across the archipelago. Recently, the government has committed to add up to 166,000 hectares of bamboo farms by 2015 to meet the growing demand for this plant.

Another edge enjoyed by makers is the presence of a large pool of workers proficient in various manufacturing steps such as weaving and carving. Because of this, suppliers can easily subcontract some of the production processes that require their expertise. Craftsmen are also hired to highlight traditional themes in new models, thereby strengthening local enterprises’

competitiveness against their foreign counterparts. Acceptance of small orders is another advantage possessed by the industry. Some manufacturers allow MOQs of one piece for large items such as gazebos, and five pieces for stools, chairs and tables.

ChallengesPrice competition is considered as the most crucial difficulty affecting the industry. Suppliers are losing orders to their foreign rivals because they find it hard to match quotes offered by makers in China, Vietnam, Myanmar and Indonesia.

To cope, domestic makers are shifting their focus on midrange and high-end versions, which are popular in developed economies in the Middle East. Companies are also boosting fabrication of models that adopt indigenous materials such as Manila hemp, bamboo, buri fiber and capiz shell. Demand for these items is rising, especially in the US and the EU.

Another roadblock facing the sector is the implementation of stricter timber sourcing policies. Because of an existing logging ban, some enterprises are forced to use imported wood, which is typically 10 to 20 percent more

20122013

Source: Bureau of Export Trade Promotion

$160

$151

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24 Philippines Sourcing Reports

Supplier Profiles

SUPPLIER MATRIX

Company Year established

Head office location

Factory location(s)

Ownership Full-time employees

Part-time employees

ISOcertified

Avanti 2012 Mandaue (Cebu)

Mandaue (Cebu)

Locally owned

15 40 ✗

Carved Marble 1999 Angeles (Pampanga)

Angeles (Pampanga)

Locally owned

15 ✗

Cebu Fil 1986 Lapu-Lapu City(Cebu)

Lapu-Lapu City (Cebu)

Foreign-invested

80 20 ✗

Country Accents 1994 Bacolor (Pampanga)

Bacolor (Pampanga)

Locally owned

8 50 ✗

Cymru 2004 Mandaue (Cebu)

Mandaue (Cebu)

Locally owned

35 ✗

Diamond Cane 1986 Mandaue (Cebu)

Mandaue (Cebu)

Locally owned

100 100 ✗

Ezra 2006 Makati (Metro Manila)

Las Piñas (Metro Manila)

Locally owned

5 50 ✗

Golden Fortune 2008 Quezon City (Metro Manila)

Quezon City (Metro Manila)

Locally owned

12 30 ✗

John Joven Handicraft 2011 Paete (Laguna)

Santa Maria (Laguna)

Locally owned

5 20 ✗

Kahoyan 2007 Calumpit (Bulacan)

Calumpit (Bulacan)

Locally owned

60 10 ✗

Lakan 2008 Marikina (Metro Manila)

Marikina (Metro Manila)

Locally owned

15 30 ✗

Markline 2008 Muntinlupa (Metro Manila)

Muntinlupa (Metro Manila)

Locally owned

40 ✗

Maturan Stone 2007 Liloan (Cebu)

Liloan (Cebu)

Locally owned

10 50 ✗

Peter’s 1980 San Fernando (Pampanga)

San Fernando (Pampanga)

Locally owned

48 4 ✗

Ronnie Handicraft 2009 Angeles (Pampanga)

Angeles (Pampanga)

Locally owned

11 20 ✗

Silahis 1967 Parañaque (Metro Manila)

Parañaque (Metro Manila)

Locally owned

30 10 ✗

Tumandok 1988 Bacolod (Negros Occidental)

Bago(Negros Occidental)

Locally owned

46 ✗

Winners 1993 Bacoor (Cavite)

Bacoor (Cavite)

Locally owned

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28 Philippines Sourcing Reports

Supplier ProfileSupplier Profiles

Capability

Contact details

Avanti Philippine Furniture Inc.

Annual sales $600,000 Share of total sales 100% Annual export sales $360,000 Total monthly capacity 500 pieces Average monthly output 300 pieces Capacity utilized 60% Average monthly exports 200 pieces Export ratio 67% Major export customers Hazel Furniture (Bahrain), Stylish Outdoors (Australia), Sicomex N.C. (New Caledonia)

Company facts

Year established 2012 Head offi ce location Mandaue (Cebu) Factory location(s) Mandaue (Cebu) Ownership Locally owned Full-time employees 15 Part-time employees 40 Total annual sales (all products) $600,000

Sales & output: Furniture

Established in 2012, Avanti specializes in synthetic rattan furniture. It generates $600,000 in total annual revenue.

About two-thirds of output is sent abroad. France takes up 70 percent of shipments. The Middle East absorbs one-fifth of exports, with Bahrain, the UAE and Saudi Arabia as the key markets. The rest goes to Australia.

Outdoor models contribute 50 percent to foreign sales. The best-sellers in the line are chaise lounges and garden dining sets.

Products for all price segments are available. Basic dining chairs are offered for at least $60. Living room sets start at $900 and reach $2,500.

The company buys teak, synthetic rattan and aluminum from Indonesia.

Two designers release up to five models every year.

All manufacturing steps are performed in a 1,100sqm factory in Mandaue city of Cebu province. The plant is equipped with locally purchased welding and sewing machines.

Avanti employs 10 full-time and 40 temporary staff members. They can turn out 500 pieces every month. The peak season is from August to December.

Ten inspectors make up the QC team. Visual checks focus on the quality of assembly and weaving.

Bubble wrap and cartons are normally used as packaging. The minimum order requirement is one set per model. Delivery is within 30 days.

The supplier is a member of the Philippine Exporters Confederation and Cebu Furniture Industries Foundation. It plans to further expand its market presence in the EU in 2014.

Materials used Mahogany ✗

Teak ✓

Bamboo ✗

Rattan ✓

Water hyacinth ✗

Other wood types ✗

Exports by product Living room furniture 25%Dining & kitchen furniture 25%Bedroom furniture –Bar & bistro furniture –Outdoor furniture 50%

Exports by market North America – EU 70% Europe (non-EU) – Asia-Pacific 10% Middle East 20% Other –

Business contact BORDEN Sherimae

Phone (63-32) 420-4481

Fax (63-32) 414-0010

E-mail info@avantiphilippine.com

URLwww.avantiphilippine.com

Address S.E. Jaime Street, Paknaan, Mandaue, Cebu, Philippines

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Exports by marketExports by mNorth AmericaNorth AEU EuropA

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Supplier Profile Executive Sum-Supplier Profiles

Popular export models

Model: CassandraMOQ: 1 setPackaging: Bubble wrap, cartonDelivery: 30 daysPrice: $2,575Description: Outdoor furniture set; synthetic rattan body and aluminum frame; powder- coated; two 107x96x72cm sofas, two 97x96x72cm armchairs and 90x90x31cm coffee table

Model: PaulinaMOQ: 1 setPackaging: Bubble wrap, cartonDelivery: 30 daysPrice: $520Description: Outdoor dining set; synthetic rattan body and aluminum frame; 80x80x75cm table and four 56x60x88cm chairs

Model: PalauMOQ: 1 setPackaging: Bubble wrap, cartonDelivery: 30 daysPrice: $3,625Description: Outdoor furniture set; synthetic rattan body and aluminum frame; powder- coated; 92x305x72 and 92x123x72cm modular sofa, and 100x148x48cm coffee table

Model: BreezaMOQ: 1 setPackaging: Bubble wrap, cartonDelivery: 30 daysPrice: $986Description: Outdoor furniture set; synthetic rattan body and aluminum frame; powder- coated; 82x82x72cm sectional sofa, 82x82x30cm ottoman and 60x120x30cm table

Model: ParisMOQ: 1 setPackaging: Bubble wrap, cartonDelivery: 30 daysPrice: $2,605Description: Outdoor furniture set; synthetic rattan body and aluminum frame; powder-coated; 190x90x72cm sofa; two 71x 90x72cm armchairs and 120x80x40cm coffee table

Model: RomanaMOQ: 1 setPackaging: Bubble wrap, cartonDelivery: 30 daysPrice: $907Description: Outdoor furniture set; synthetic rattan body and aluminum frame; powder-coated; 83x154x73cm loveseat; two 83x85cmx73cm armchairs and 60x120x38cm coffee table

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Model:odel: Palau PalMOQ:OQ: 1 setPackaging:ckaging: BubDelivery: Price: Des

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