According to José Luiz Dias, president of the Abimóvel, the Emirates were selected because it is a traditional buyer of furniture from Brazil, plus it hosts Index, the leading trade fair for the industry in the Middle East, and is also home to an Apex office.

According to João Araújo Pinto Neto, executive director of the Abimóvel and manager of the Brazilian Furniture project, annual exports of Brazilian furniture total roughly US$ 900 million, less than 1% of global sales by the industry, which has a turnover of approximately US$ 100 billion.

The United Arab Emirates ranks among the ten leading buyers of furniture from Brazil, and accounts for around 10% of the country’s furniture exports. The leading importer of Brazilian furniture is France, followed by the United States.

To increase exports to the Arab country, the project will follow two different lines of action. The first one is to continue participating every year in Index, the largest event for the industry that Brazil attends.

“The fair in Dubai is one of a handful worldwide in which you can find all sorts of furniture, from the most sophisticated to the most popular,” says Neto. “It is the fair in which Brazilians sell the most and enjoy the most success,” he adds.

In the 2009 edition alone, the fair generated revenues of US$ 3 million to the Brazilian companies. Neto explains that the event in Dubai is important not only for Brazilian exports to the Emirates, but to the other Arab countries as well, in addition to eventual sales to Asian and European countries.

The other line of action is to have Arab buyers participate in business roundtables under a buyer project, which consists of bringing foreign importers to events in Brazil. A total of 12 projects of the kind will be implemented throughout the year.

Leather

Brazilian exports of leather doubled in March. The country exported the equivalent of US$ 160.5 million, representing growth of 101% in comparison with the same month of last year.

In the first quarter, sales of the product totaled US$ 395.8 million, representing an increase of 74% in revenues and 32% in shipped volume, compared with the same period of 2009. The data were disclosed by the Confederation of Brazilian Hides and Skins Industries (CICB).

According to the president of the organization, Wolfgang Goerlich, the result points to a resumption of growth in the industry. For this year, the foreign sales projection is US$ 1.8 billion. If confirmed, the figure will represent growth of 60% over last year.

The leading markets for Brazilian leather in the first quarter were Italy, with US$ 96.57 million in imports; China, with US$ 92.36 million; and the United States, with US$ 41.17 million. Year-to-date, Germany, Mexico, Vietnam and South Korea also stood out as target markets for Brazilian exports.

According to the CICB, new markets that increased their leather imports include Singapore, Poland and Malaysia.

Anba

According to João Roberto Chagas, the coordinator of the export group, they produce garden benches, chaise longues, tables and stools, as well as tool handles with the off cuts from the sawmills,

“We have a great variety of options and conditions to adapt products to the requirements of importers,” he guarantees.

Up to now, the main contacts with the foreign market took place at fairs like Fenavam, a furniture fair in São Paulo, and Móvel-Sul, in Bento Gonçalves, in Rio Grande do Sul. “Participation in these events is fundamental for company growth.”

The furniture sector has played an important part in the history of the state of Rondônia, and is one of the main attractions of the region, as well as generating many work posts. According to Chagas, the seven companies in the association generate 400 direct jobs.

Today, the activity requires sustainability of raw material, social responsibility and environmental preservation.

It has, however, not always been like that. Between 1960 and 1980, Rondônia attracted thousands of immigrants, mainly from the south of Brazil, stimulated by distribution of land by the Federal Government aiming at occupation of the region.

The settlement process caused negative environmental impacts, due to disorganized occupation and indiscriminate exploration of forestry resources. Such a model of exploration has resulted in the establishment of many sawmills, producing and trading wood.

The activity, developed without control over several years, resulted in a dearth of certain hardwoods, causing inspection by the government and environmental protection agencies.

“There are currently true concerns regarding operation of the wood sector in a sustainable manner. Our buyers want to know the origin of the wood and to guarantee that extraction was legal,” said Chagas.

On the domestic market, apart from supplying shops in the state, companies in the association also sell to the states of Rio Grande do Sul and São Paulo.

They would also like to get clients in the Middle East: “One of our agents made several contacts with Arab importers last year. The Middle East is one of the new markets in which we plan to place our products,” said Chagas.

Service

E-mail: artefatoschagas@yahoo.com.br
Telephone: (+55 69) 3434-2485

Tax and labor reforms are still desired by employees. The proposal for reduction of the Industrialized Product Tax (IPI) for sector products, which has already been approved by the Lower House and by the Senate, but was vetoed by Brazilian president Luiz Inácio Lula da Silva, still mobilizes furniture producers.

The first quarter of 2009 should be a special period for the furniture sector, forecasts Diaz Fernandez. From January to March, the Brazilian market should reveal, with greater objectiveness and precision, the level of impact of the global economic crisis on the wood and furniture productive chain.

Access to credit is the great challenge for businessmen early this year. It is a fundamental resource for company turning capital. The results reached by the sector last year are still being analyzed by Abimóvel.

The appreciated dollar, stabilized at between 2.10 and 2.20 reais for a dollar, should benefit the business, favoring exports this year.

In the period from February 10th to 15th, the Brazilian Furniture event will be promoted Las Vegas (US). It should serve as an indicator of how the American market, the main buyer of Brazilian furniture, is progressing. In August, the first Abimóvel Salon will take place in the city of São Paulo, boosting sector business as never before.

José Luiz Diaz Fernandez spoke about the impact, up to now, of the global economic crisis in the wood and furniture productive chain. The furniture sector is made up of 16,500 companies, being most micro and small. The activity generates 232,000 direct jobs and around 460,000 indirect jobs in the country.

The effects of the crisis are arriving in Brazil. Does this threaten the sector?

It all depends on the first half. I am no longer scared, but confident that it will be just one more crisis. It should not be as serious for Brazil.

How is the business doing early this year?

Many businessmen have orders on hold. Last September, we had reasonable stocks of raw materials. For this reason, the crisis has not affected our sector so much.

In October, you said that the prices of raw material and inputs were rising very much. Has the establishment of stocks been affected?

When the crisis blew up, last September, we were living a period in which stocks of raw material and inputs were full. Orders for the end of the year generally start arriving in August, for delivery in December. The crisis has compromised the number of orders, but we also did not have to worry about replenishing stocks.

Is it possible for there to be a reduction in labor in the furniture sector?

If there are dismissals, they should be few, as furniture sector labor is few and far between.

Have the measures already announced by the government improved access to credit?

The scenery of the first quarter should be the great challenge for 2009, as it will show how credit will be, mainly for turning capital. For the transformation industry, turning capital is very important and it depends greatly on credit. From the order to delivery of products it takes practically six months. Turning capital is crucial to our sector.

Credit is still very expensive and the guarantees required are abusive, around 120%. The bank's evaluation of the goods we offer as guarantees to the financing are generally much more valuable. Interest is very high. The government has been simplifying access to credit, but the problem has not yet been solved. It is still very hard, especially for small businesses.

What are the business perspectives for 2009?

We are going to turn ourselves mainly to exports, which are being favored by the appreciation of the dollar. The Abimóvel target for 2010 is to reach 10% company participation in the furniture export market. Business prospecting trips, this year, are already scheduled for Canada, Africa, India and Russia. We are going to seek new markets for Brazilian furniture with greater emphasis.

Is business in dollars the bet of furniture producers?

Appreciation of the dollar was abrupt and strong in the early stages of the crisis, generating great apprehension. Currently, deals in dollar are good for our sector. We believe that exchange rates should stabilize at between 2.10 and 2.20 Brazilian reais per dollar, and this should result in greater exports from now on, despite the markets abroad being greatly recessive. We are going to participate in the Brazilian Furniture event, in Las Vegas, from February 10th to 15th. We are going to feel the American market, the main market for our products.

How do you evaluate the position of Brazil in this crisis?

We are better prepared than in previous years. This crisis is being worse worldwide than in Brazil. Brazil is used to crises. We have always lived and survived crises of several kinds: economic, institutional and political, etc. We are more schooled than the rest of the world with regard to dealing with them.

What is the requirement of furniture producers with regard to the Industrialized Product Tax [IPI]?

Our proposal with regard to the IPI is reduction to 5%, especially for plush and metal furniture. The proposal was approved by the Lower House and by the Senate, but was vetoed by the president of the Republic. We are working alongside the Revenue Service, but things are not working out. This matter should have been solved two years ago. The greater span for payment of the ICMS, to ten days, announced by the federal government, due to the global crisis, is not enough. As is the case with some federal taxes that have been postponed.

Apart from prospecting trips abroad, how is the Abimóvel agenda for this year?

In August we are going to promote the First Abimóvel Salon in São Paulo, with participation of the largest number of companies that make furniture in Brazil. We should also have the largest furniture sector business roundtables ever promoted in the country with national and foreign companies. This event should generate orders for the end of the year. The first Furniture Salon should generate great leverage to the sector.

Sebrae

The event precedes the Abimad fair, which is scheduled to take place between July 31st and August 3rd.

Most of the international buyers are brought by Abimad to participate in the event. Many importers are recommended by companies associated to the Abimad and others are prospected by the organization.  Importers from the United States, Canada, Argentina, Ecuador, Spain, England, New Zealand, South Africa, the Ukraine, Switzerland, India, Dubai, Jordan and United Arab Emirates have also been invited.

This is the first time that the Abimad is going to promote two editions of the fair in the same year. The first took place in February. "The reason is that there is not a high-end furniture fair in the second half," stated Rafael Molon, the meeting organizer, who is also responsible for the international relations department at Abimad.

According to him, in the last edition of the fair, deals negotiated totaled US$ 5 million, and sales forecasted up to six months after the fair totaled US$ 13 million. The main buyer countries were Venezuela, Spain, Argentina, Puerto Rico and Australia.

Molon informed that Arab buyers selected to participate in the fair are large retailers and also businessmen who seek furniture for the several hotel projects in the countries of the Gulf. "They are quality buyers with potential," stated he.

From Dubai will come representatives of companies Marlin Furniture, which has one of the largest furniture shops in the emirate and La Cienda, of household, commercial and hotel projects; from Abu Dhabi, the capital of the Emirates, come Al Faiez, which sells furniture and luxury accessories, and Key Stone, which develops projects. From Amman, the capital of Jordan, comes a representative of shops Interiors.

A group of Arab businessmen was also invited to participate in the February edition. Omani group Khimji Ramdas, for example, signed an order for US$ 30,000 with company Niroflex, of upholstered products.

"Arabs like Brazilian furniture very much, as it has different design. Apart from that, they also like the charisma of Brazilian businessmen, always prepared to modify the furniture to match the client's taste. I believe that in this edition of the fair, good deals should be closed," stated Molon.

The fair is going to count on 100 exhibitors, makers of high-end furniture and decoration accessories from all over Brazil. In the last edition, the event received over 14,000 visitors.

Service

Abimad Fair
Date: 31st July to August 3rd
Time: From 10 am to 7 pm
Site: Imigrantes Exhibition Center
Address: Rodovia dos Imigrantes, Km 1.5, São Paulo, Brazil

In a survey conducted between June and July, 94 businessmen in the region said that they too wish to create more than 200 job positions in the sector, and increase from 48,000 to 49,400 their portfolio of active customers.

The survey is one of the actions of "Projeto Móveis de Ubá" ('Ubá Furniture Project'), supported by the Brazilian Micro and Small Business Support Service (Sebrae) in the state of Minas Gerais, the Inter-Municipal Union of the Ubá Carpentry Industries (Intersind) and partnering institutions. The work includes managerial and technical training actions, product improvement, sustainability, and access to markets.

In September, eight businessmen from Ubá visited China on a mission organized by the Sebrae Minas Gerais. "We need to know who our competitor is in order to make a plan," claims the president at Intersind, Rogério Gazolla.

The group attended the 13th International Furniture Fair, in Shanghai, the country's largest city. They also went to furniture hubs in the province of Canton, in southeast China, to commercial centers, and parts and raw material factories.

The businessmen believe that the development strategy for the Ubá furniture hub is on the right path. They are going to focus their investment in design, in the region's reforestation, which will provide the foundation for the fiberboard industry that should be ready in 10 years, and in the construction of the hub's residue treatment unit.

The president at Intersind believes that the scenario is favorable to Brazil. "The Chinese expansion will last 10 years at most," he estimates.

National industries, according to him, have competitive advantages such as the time for cutting wood. Whereas in China, this time is 60 years, in Brazil it is approximately 15 years.

"We are investing in treatment of production residue, which makes a good impression in markets in Europe and the United States," says Gazolla.

Sebrae

The sutheastern Brazilian state of Minas Gerais presented the greatest growth in sector foreign sales, 46.8% when compared to 2005, followed by the state of São Paulo, with 21.8%, and Pernambuco, in the Northeast, 7.4%.

However, in absolute terms, the largest Brazilian exporters of furniture was the southernmost state of Rio Grande do Sul, followed by Santa Catarina, also in the south.

Even with the appreciation of the Brazilian real against the dollar, which affects Brazilian exports, the sector trade balance in 2006 was positive, with a surplus of US$ 819 million.

The showroom is offering solid-wood furniture like racks, wardrobes, beds, tables, chairs, plush chairs, upholstered furniture, bookshelves, patio furniture, cabinets and others.

According to the market consultant of the Local Wood Production Arrangement, who is responsible for the sale, Paulo Atinizan, last year there was an increase in design consultancy for the 45 participants of the cooperative and they started producing furniture with different finishing, innovation and design.

"The values offered are below market price, with a discount of 20% for cash payment or for purchases in up to six instalments on credit cards. Our forecast, after this sale, is to begin production for 2007," said consultant Paulo Atinizan.

For a long time, however, businessmen bet on production without paying much attention to design. Since 2002, thanks to a partnership with the local branch of the Brazilian Micro and Small Business Support Service (Sebrae), around 200 companies of the hub have been benefiting from the design nucleus, a center that helps in the search for more elaborate prototypes.

"During the 1980s and 1990s, the hub only produced popular furniture, always copied from abroad. In this decade, however, we changed this, with each businessman seeking his own identity, and started supplying to the middle class," stated Eliane Rosignoli, a technician at Sebrae for the Ubá region.

The valuable assistance came not only in the training of carpenters and technicians but also through courses provided by the National Service of Industrial Education (Senai) and by a famous designer.

With consultancy from designer Dijon de Moraes, who got a doctorate in design in Milan, the Sebrae established, in 2004, a collection of stylized furniture. "It was through this collection that we managed to lose our bad fame, that Ubá only made low-quality furniture," explained the technician.

A good example of this change of face is company Parma Móveis – one of the oldest in the region. Previously, the furniture was designed at the company factory, after research in foreign fairs.

"But we had no individual identity," recalled Silber da Silva Silveira, the company marketing director.

Parma has two factories, 196 employees and produces 1,600 items a month. "Today, apart from research of tendencies, there is investment in design to provide an identity, innovate and to have our own exclusive products."

The gamble paid off so well that Parma won an award for armchair Dimitra at the Femur Design Salon, a furniture fair in Minas Gerais. Apart from that, the company gained energy to export.

Nowadays the company is participating in a group of nine furniture companies that joined forces in 2005 to increase sales to other countries.

Parma already exports to Latin America. According to Eliane Rosignoli, there is a more ancient group, established in 2000, that already exports to the Arab countries and has a permanent showroom in Dubai.

Ecologically Correct

In Ubá, 95% of the companies produce with wood from afforestation like MDF and chipboard. Few use solid wood. The companies, however, paid high operation fees to the State Environment Foundation (Feam). Between 2004 and 2005, an agreement was made: the Feam would reduce fees charged if companies complied with the environmental demands it established.

One of the results of the negotiation was a license for the use of new kinds of wood. On the other hand, the companies joined forces and built a liquid waster treatment plant in Ubá. That is, one plant treats all the liquid waste of a group of companies. And still this year, the construction of a mill for treatment of industrial residues is scheduled. The Ubá city hall has donated a piece of land and the work has already begun.

"The Federal University of Viçosa analyzed the quality of the solid residues generated by the hub. The volume is approximately 15 tons a month. It is a very large volume," stated Eliane, from the Sebrae. "With the mill, we will be able to recycle the material producing briquette, paints and even use bits of MDF for handicraft."

The businessmen also seek local solutions. At Parma Móveis, apart from afforestation wood, the furniture is made out of natural fiber like rattan, bamboo and plates made out of coconut husk and water based varnish. "They are materials that add artistic and environmental beauty to the furniture," summed up Silveira.

Contacts

Sebrae in Ubá
(+55 32) 3531-5166

Parma Móveis
(+55 32) 3531-2322

Anba

The stand of factories Manbel, Divicar and D’Cândida will be in the Brazilian space organized by the Arab Brazilian Chamber of Commerce in partnership with the Brazilian Export Promotion Agency (Apex).

Manbel Móveis has been exporting to a distributor located in Dubai for two years. "From there our furniture, an average of four containers a month, go to Africa," explained the company sales manager, Itamar Silva.

"We are going to Index with the objective of closing new deals and maybe even signing a partnership with another large local distributor who visited our factory in October," anticipated Silva.

According to him, the Arab importer has already lived in Brazil and currently lives in Angola, but he does business with Dubai.

Manbel has been operating for 12 years, the company employs 55 people and has been exporting since 1998. According to the manager, sales grew even after 2002, especially to the markets in Europe, Africa and South America.

Today, between 30% and 40% of the company production, of 12,000 items a month, goes to the foreign market.

Optimistic with the future business opportunities, the company is investing in a new industrial unit that will be operating as from January 2006.

"This will be for another sector, with more accessible furniture, made out of chipboard," explained Silva. The new factory also has a monthly capacity for production of 12,000 items and should generate over 50 direct jobs in Lagoa Vermelha.

The children’s bedroom furniture factory Divicar Móveis is going to participate in the event for the first time, attracted by the potential of the event.
"Index is a fair of worldwide fame. We are optimistic because we know that the Arab countries are a good market with high buying power," stated Carlos Alberto Vieira de Carvalho, the company export manager.

Divicar produces around 4,000 products a month and generates 90 direct jobs. The company started selling on the foreign market three years ago, to Uruguay, Venezuela, Argentina, the United States, Angola and Spain. Nowadays the company’s exports represent just 5% of revenues. The target is to reach 30% in three or four years.

Index will also be the first international fair in which Móveis D’Cândida is going to participate. The company produces dining room furniture in solid wood and plywood.

"Our objective is to prospect the market. We have already made some contacts with the region through the Sebrae Exporter project, but nothing better than direct contact with importers," pointed out the company partner, Paulo César.

The ‘SebraExport Móveis’ project has been developed by the Rio Grande do Sul Association of Furniture Industries, with the support of the state Brazilian Micro and Small Business Support Service (Sebrae) since 1998. The objective of this project is to stimulate exports by micro and small enterprises.

Established in 2002, D’Cândida employs 54 people and already exports to the United States, Canada, Africa and Chile.

Contact

Manbel Móveis – www.manbelmoveis.com.br

Divicar Móveis – www.divicar.com.br

Móveis D’Cândida – www.dcandida.com.br

Anba – www.anba.com.br

Movelsul Brazil 2006, the largest international furniture fair in Latin America, will be held for the fifteenth time March 13-17. The event, held in the city of Bento Gonçalves in southern Brazil, positions Brazil as a major manufacturer of furniture in the international market.

The city of Bento Gonçalves, in the Rio Grande do Sul state, is one of Brazil’s most important furniture export hubs. Movelsul Brasil, the furniture fair held there, is a professional event exclusively for manufacturers and buyers that draws more than 400 exhibitors from all over Brazil and an estimated 33,000 visitors from wood and furniture-production sectors.

Organized by the Construction and Furniture Industries Syndicate of Bento Gonçalves-Sindimoveis (Sindicato das Indústrias da Construção e do Mobiliário de Bento Gonçalves), the fair’s services focus on business prospects.

Movelsul, which takes place every even-numbered year in March, serves as a stage for the launch of new products. It is a perfect event for retailers and importers to learn the latest trends and use of new raw materials.

The “Buyer Project,” which is supported by Brazil’s federal government, gives importers the opportunity to meet Brazilian manufacturers and initiate partnerships based on capabilities and needs.

Another popular event at Movelsul Brasil is “Design Salon,” an international prize for furniture design. This competition is open to Brazilian industries as well as students and professionals from Latin America and the Caribbean. More than 3,500 projects have been received in the ten competitions held thus far.

The fair’s success can be attributed not only to the quality of the furniture showcased, but its locale.  Bento Gonçalves is located in the mountains of Rio Grande do Sul, the heartland of Italian immigrants .A unique region geographically, the people are friendly, leisure activities abound, and local restaurants serve traditional cuisine.

Brazilian furniture exports generated US$ 1 billion in revenues in 2004, with principal buyers the United States, France, United Kingdom, Germany, Mexico, Spain, Argentina, Canada, and Uruguay.

Brazil’s federal government and development agencies have invested in the furniture sector for some time. Today, the infrastructure of Brazilian factories equals that of traditional country producers, with human resources ready to meet world demand.

Movelsul – www.movelsul.com.br