Onward Singapore: Design Haven

Posted in Singapore on Tuesday, 17 July 2012. Print

The singapore industry may not be the largest, but it’s taking steps to becoming a big name in creative furniture design

Onward Singapore: Design Haven

Singapore’s furniture industry may not intuitively register as one of the significant members of the international community. Even when compared to its neighbours, Singapore is surpassed by major exporting countries such as Indonesia, Vietnam and Malaysia. In spite of this, Singapore does play an important role – especially in the region – as an investor in these larger producing countries. This, in turn, has proven to be key to the development of the furniture industry in Singapore.

Typically, furniture companies with business operations in Singapore have factories based overseas which are responsible for production. Even so, the headquarters of such companies remain in Singapore and take charge of marketing, design, branding and product development. Malaysia and China are the top two choices among Singapore furniture companies for the location of their manufacturing plants.

This mode of operation allows local entrepreneurs to leverage the lower production costs and abundant raw materials within the region, while developing their Singapore headquarters into a centre of competence in knowledge-driven activities. These activities include market research, product design, furniture production technology and financing.

The furniture industry in Singapore has earned a reputation worldwide for its ability to produce innovative, well designed and high-quality furniture.

INDUSTRY AT A GLANCE
Latest official statistics indicate that the furniture industry in Singapore is composed of 1,869 companies and provides employment to 17,487 people. As of 2011, the island state of Singapore commands nearly one percent of the global furniture trade. In addition, the industry has set itself the target of attaining 1.5 percent of the global furniture market by 2015. This projection is note-worthy considering Singapore only accounts for 0.0007 percent of the world population.

Singapore’s strength in the furniture trade was also evident in 2010. In that year, the industry grew eight percent to S$5.08 billion (US3.96 billion). This was in excess of the global furniture industry growth projection of five percent for the year.

In 2006, the Singapore furniture industry contributed S$5.5 billion in total sales turnover. Of this amount, exports of Singapore-owned factories constituted S$2.4 billion, or 43.6 percent of total sales turnover.

BREAKDOWN OF BUSINESS ACTIVITY
A survey of 101 Singaporean furniture companies showed that 57 percent of businesses are engaged in manufacturing. The survey, conducted by the Singapore Furniture Industries Council (SFIC) and SPRING Singapore, also revealed that the same proportion of companies engage in the retail of furniture. This marked an increase of about 4 percent in retail activity compared to last year. Furniture design proved less popular as a business undertaking this year compared to the year before.

The survey also indicated that the residential sector is by far the largest sector served by these furniture companies. Around 51 percent of survey respondents were involved in residential furnishings. Outdoor furniture made up the smallest sector of product offerings, with only three percent of the sample group indicating their involvement in the sector.

Business Activities Of 101 Furniture Companies
Source: SFIC/Spring Singapore

Sectors Served By 101 Furniture Companies
Source: SFIC/Spring Singapore


ECONOMIC OVERVIEW
Singapore is a relatively developed and affluent free-market economy. It enjoys a stable political environment, stable prices, and a per-capita GDP that is higher than that of most developed countries.

After contracting by one percent in 2009 as a result of the global financial crisis, the economy rebounded 14.8 percent in 2010 and 4.9 percent in 2011. This was on the back of renewed strength in export performance. Singapore’s long-term economic growth plan is focused on raising productivity, which has sunk to a compound annual growth rate of just 1.8 percent in the last decade.

The manufacturing industry has traditionally been the largest contributor to GDP, in Singapore averaging between 20 to 28 percent of GDP over the last 10 years. Singapore also has maintained its status as a net exporting country since 1988.

More significantly, the Economic Development Board (EDB) of Singapore reported that output for the general manufacturing cluster grew 4.1 percent yearon- year in March 2012. The miscellaneous industries (the category under which furniture falls) saw output increase 10.2 percent in the same period, as a result of higher demand for structural metal products and wooden furniture. This increase was in contrast with the overall performance of the manufacturing sector: For the same period, total manufacturing output was 3.4 percent lower compared to the year before.

EDB also recently reported a 6.6 percent year-on-year increase in total manufacturing output in May 2012. Miscellaneous industries under the general manufacturing cluster grew 4.6 percent for that period.

INDUSTRY SUPPORT
The Singapore furniture landscape is characterised by strong and active support, as well as the promotional efforts of the Singapore Furniture Industries Council (SFIC) – the official representative body of the local furniture industry. This support has been instrumental in the development of the furniture industry over the years. SFIC places equal emphasis on infrastructural growth and the development of design talents in Singapore.

(L-R) Mr Mark Yong SFIC, Mr James Goh SFIC, Mr Tai Lee Siang SGBC, Professor Lee Siew Yeang, SGBC

On February 2, 2012, SFIC announced the launch of the fourth round of its Member Assistance Scheme, a financial package to help its members tide over periods of economic uncertainties. Over 280 members will be eligible for a total of S$1 million in subsidies to boost competitiveness in the industry. Subsidies range from S$2,500 to S$4,000, and 40 percent of all eligible Council members stand to receive the maximum amount.

These efforts are aimed at providing assistance to the overall industry to ensure its sustainable growth. According to vice president of SFIC, Ernie Koh, the Singapore furniture industry aims to focus its growth in four key directions. Namely, they are: Marketing and Branding, Design, Green Initiatives and Skill Upgrading.

FOCUS ON DESIGN
Design often takes centre-stage in Singapore when it comes to furniture production. There are a number of design-led programmes to celebrate designers and design in Singapore.

The Furniture Design DNA (Develop, Nurture and Accelerate) programme is an initiative aimed at raising design capability, nurturing design talents and accelerating business growth through various design adoption. The programme was implemented to assist the furniture industry in fully leveraging design as a key competitive advantage and driver for future growth.

The Furniture Design DNA is spearheaded by the SFIC’s dedicated Design Development Division and is targeted at local furniture companies, designers and students and will focus on four main areas – design seminars, overseas design missions, an interactive e-platform for design promotion and outreach, and a capabilities-profiling of the furniture industry.

Two other initiatives to promote furniture design in Singapore are:

Platform – Design Entrepreneur
Development Programme:

SFIC initiated a design entrepreneur development platform under the existing International Furniture Fair Singapore (IFFS) for new and young promising Singapore designers. This initiative aims to enhance the design capabilities of Singapore furniture companies and strengthen Singapore’s position as the design hub for Asia.

Furniture Design Award (FDA)
SFIC intends to increase the profile and the standards of participation at FDA. FDA is an ongoing annual furniture design competition aimed at nurturing Singapore’s budding design talents. It also aims to retain promising, young design talents for the furniture industry by giving them opportunities to develop their design capabilities.

This year also saw the introduction of the inaugural Singaplural, Furniture Design Week at the International Furniture Fair Singapore in March.

GREEN INITIATIVES
Green design was the focus at FDA 2012, held in conjunction with IFFS. Combining environment sustainability with furniture design, it took place under the theme of ‘Love, Think, Design Green’.

In line with the topic of sustainability, winning entries at FDA 2012 were judged on the following the inspiration behind the prototype, choice and sourcing of materials, as well as the different aspects involved in overall production to assess their environmental friendliness. Even recycling potential was considered, in order to ensure the participants’ alignment with programme’s theme.

Another initiative which made its debut at IFFS was the Green Pavilion. At the Green Pavilion, ten SFIC members’ products that showcase diversity in their approach towards sustainable practices were featured.

Also in March this year, SFIC – represented by its president, James Goh – and Singapore Green Building Council (SGBC) – represented by its president, Tail Lee Siang – signed a Memorandum of Understanding (MoU). The MoU sealed their commitment to work together to develop and support initiatives towards greening Singapore’s built environment.

Speaking at the signing, Mr Goh, said: “Singapore furniture companies have already established a reputation for innovative and high-quality furniture, and this is a good time to grow their eco-capabilities. Working with SGBC, we will help companies achieve internationally recognised certification and standards required in the global market of sustainably produced goods.”

(L-R) Mr Mark Yong SFIC, Mr James Goh SFIC, Mr Tai Lee Siang SGBC, Professor Lee Siew Yeang, SGBC

“The choice of green furniture is important for the larger purpose of achieving environmental sustainability. According to a Global Industry Analysts report, the global green building materials market is forecast to reach US$406 billion by 2015. As the global green building industry is a key target for green certified furniture and furnishing products, we believe that prospects for SGBP certified green furniture will be very strong,” added Mr Tai.

CAUTIOUS OPTIMISM FOR IMMEDIATE FUTURE
Speaking on the strengths of the Singapore furniture industry, executive chairman of Lorenzo and president of SFIC, James Goh said: “We have a good support system for furniture retailers in Singapore with the establishment of the Singapore Furniture Association. Presenting a cohesive and united front, this association encourages exchanges on best practices while promoting its members through various marketing campaigns in Singapore.

Mr Goh also expressed his optimism for the rest of the year. “I expect the government’s efforts to increase both public and private housing supply in response to strong demand to have a positive impact on the Singapore’s furniture industry in 2012. As a result, sales from Singapore are anticipated to increase as owners fill their homes with new furniture. On a cautious note, I anticipate that the economic uncertainty will weighdown on global demand. Notwithstanding, we remain cautiously optimistic on the Singapore furniture industry moving forward.”

EFFECTS OF ECONOMIC SLOWDOWN FELT
Singaporean furniture maker, Air Division, revealed that in the first half of the year, it expected tough days ahead for the Singapore furniture industry. Despite winning multiple awards for its innovative designs, the company saw a nearly 20 percent decline in sales as volatility in external markets affecting the local market.

Managing director of Air Division, Michael Toh, said: “In the last few months, I’ve seen a slowdown. Maybe it’s because of the economy and what’s happening in Europe and US, but the effects have somehow been felt in Singapore. People are more conservative about spending now.” With traditional export markets in a slump, companies are now being encouraged to explore new emerging markets, including Latin America, the Middle East and China.

Executive director of Cellini Design, Jimmy Tan, says that the company identified a growing demand in the international commercial property development and hoteliers sectors. As such, Cellini Design set up a Contract Division to tap this market.




Cellini’s collections are available at over 50 retail stores throughout Asia

INTENSE COMPETITION
Due to its premium geographical location, Singapore’s industry is subject to plenty of transit trade and intense competition. According to the executive chairman of Star Furniture, Richard Koh, Singapore’s main strength lies in its strategic location between the east and west. He added that as a cultural melting pot, the designs and products of Singaporean companies are influenced by both eastern and western counterparts.

Mr Koh also said: “Due to Europe’s weak economy and volatility in the global markets, furniture export will definitely be affected. Domestic demand may weaken as consumers cut back on spending. Within the industry, it is still very competitive as there are new entrants coming in every now and then.”

He also said that new companies that join the scene are usually started by people who have been in the industry long enough. These people come with fresh concepts and are willing to take more risks, but are usually limited by resources. On the other hand, incumbents might have deeper pockets but they may not be as adaptive to the changing markets. Hence the interactions between the new and the experienced companies are very dynamic, and it’s a case of the survival of the fittest in the industry.









INTERNATIONAL FURNITURE FAIR SINGAPORE / 29TH ASEAN FURNITURE SHOW (IFFS/AFS 2012)
DESIGN TAKES LEAD AT IFFS 2012
IFFS/AFS is one of the largest trade shows in Singapore, attracting over 20,000 trade visitors annually, with more than 120,000 pieces of designled furniture and furnishing products on display. In the area of internationalisation, SFIC has helped its members seek global business through greater participation at high profile international fairs such as imm Cologne and Orgatec in Germany, the Milan International Furniture Fair, Index Dubai and New York’s International Contemporary Furniture Fair.

IFFS/AFS consolidates the largest collection of exhibitors from China, Indonesia, the Philippines, Taiwan, Thailand and Vietnam, outside of their respective country trade fairs. Besides the significant regional presence, the strong showing of international companies from Australia, France, Italy, United Kingdom and America further affirms the IFFS/AFS’ status as a global furniture hub.

The International Furniture Fair Singapore 2012/29th ASEAN Furniture Show (IFFS/AFS 2012), Deco Asia 2012 and The Hospitality Show 2012 took place concurrently at the Singapore Expo from March 9-12 this year.

A total of 512 companies from 26 countries participated in the trilogy of shows, occupying 67,000 square metres of space across seven halls at the Singapore Expo. The event welcomed a strong contingent of exhibitors from the ASEAN and Asian countries.

Spot orders of US$303 million were transacted at the fair, up from US$289 million last year. Follow-on sales are expected to top US$3.6 billion, confirming the event’s status as Asia’s premier, design-led furniture sourcing platform for the industry. This edition of the show attracted a total of 23,552 trade visitors over four days. A larger group of hosted buying delegations together with higher preregistration figures translated to an increase of almost 13 percent in actual visitor numbers.

As a segment of the fair dedicated to design, D’Space featured creative exhibits across the halls and also hosted the Platform showcase. Furniture Design Award finalists were also featured in this space.

INTRODUCING SINGAPLURAL & CONVERGE ASIA
SingaPlural, the inaugural Singapore Furniture Design Week, took place alongside IFFS 2012. A shuttle service brought visitors from the Singapore Expo to *SCAPE, Park Mall, Plaza Singapura and SPACE at Bencoolen Street, to view and experience the satellite exhibitions downtown.

Founders of furniture consultancy, Cilicon Faytory, Cici Chen and Lui Honfay, chaired two of the design seminars under SingaPlural. They said: “Our sharing session with the local community was a great way to build up design awareness in Singapore. Furniture is a business, so it is important to reach out to the end-users to create a sustainable environment for design.”

Also making a debut this year was the Hospitality.Design.Furniture Converge Asia 2012 Conference, which featured 30 invited speakers in the two-day programme. “The focus on design has been the strength of our show, and we will continue to build upon that,” stated the Chairman of the Show Advisory Panel, Tony Pang. “To maintain our prominence in the market, we aspire to get even better at looking after our exhibitors’ needs, as well as keeping things fresh for visitors to our show.”


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