UAE leads in mid-east furniture business

Babu Das Augustine
Filed on August 30, 2004

DUBAI - Fuelled by the rapid economic growth, the demand for furniture and Timber products within the UAE and the region has witnessed a massive growth during the past four years.

The construction led growth and the diversification of the region's economies into tourism and the growing focus on real estate has resulted in more than 60 per cent increase in the total turnover of furniture traded through UAE. Currently, the combined turnover of imported and locally manufactured furniture together accounts for more than $1.3 billion, which was about $750 million in 2000.

'The Middle East region as a whole is experiencing construction boom and the fortunes of furniture industry has direct linkage to this buoyancy in the region. UAE with its excellent ports and transport infrastructure has become a regional import and manufacturing hub for furniture and timber,' said Abdul Karim Ahmed a leding importer of timber products to the region.

The current turnover of the AGCC markets is estimated at $4.5 billion. Out of this about the UAE market alone accounts for $1.5 billion. According to the Federation of UAE Chamber's statistics, the country has 105 wooden furniture-manufacturing units, of which 50 are based in Sharjah, 30 in Dubai, 20 in Ajman. In addition there are over 30 plastic, metal and synthetic furniture and upholstery-manufacturing units in the country. The local production covers 30 per cent of the total turnover in the country, while the local consumption accounts for over 75 per cent of the production and imports.

About 25 per cent of the imports and local production are re-exported to Gulf countries, sub continent and Europe. With the unabated expansion of the real estate sector, the country's furniture industry is projected to grow in the range of 25 to 30 per cent during the next five years. Landmark real estate projects such as Burj Dubai, Down Town Dubai, The Palm, The World and a new skyline of residential and entertainment projects coming up near Emirates Road are set to boost furniture demand. Additionally, free hold property projects in Ajman, Sharjah and Ras Al Khaimah along with various tourism projects across the country are set to give a big boost to the country's furniture industry. At the regional level Saudi Arabia, Bahrain and Qatar together have announced over $5 billion worth real estate projects scheduled for the next two years which are expected to further boost the demand for office furniture and interior decor products in the region.

As a leading importer and re-exporter of furniture and timber products in the AGCC region, many leading furniture manufactures say the UAE can play a lead role in manufacturing and value addition of furniture in the region.

'With the excellent infrastructure in terms of ports, road transport network and warehousing facilities close to the ports and free zones the UAE has the potential to become the furniture business hub of the whole of Middle East and Africa,' said Ismail Bepur, a timber importer to the UAE.

In terms of value addition done in the UAE, the local manufactures feel industry has further scope for expansion.

Although UAE based traders re-export furniture to Europe and Indian Subcontinent, many in the business feel under the current market conditions, catering to the regional demand alone can yield good returns to the industry. Many local manufactures feel that the booming market conditions could be utilised to the full only if the local industry invests further in the state-of-the art manufacturing with fully integrated production process with cost effective sourcing and marketing.

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