Indonesia has made a name for itself in the global indoor and outdoor furniture industry through its exquisite craftsmanship and low minimum order requirements.

The intricate weaving and woodcarving, as well as the wide range of available wood have helped the country generate export sales of more than $2 billion in 2007. The Indonesia Furniture Industry & Handicraft Association (Asmindo) expects this to increase significantly by end 2008.

However, makers in Indonesia are being cautious as several challenges threaten to cut their margins. Rising raw material and transportation costs, growing demand for environment-friendly products, and intensifying competition from other countries in Asia are some of the major issues suppliers need to address. But despite all of these, Indonesia is poised to play a more active role in the international market for wooden furniture.

Suppliers are gearing up to release innovative designs that combine function and style, and reflect both cultural and modern trends.

Makers are also releasing furniture with more intricate hand-carved designs or weaving.

The following are some of the key trends we see in Indonesia's indoor and outdoor furniture industry:

• Exports in the line are anticipated to increase in 2008, with the US expected to lead worldwide demand. However, many suppliers will be targeting the European market within the year.
• Many companies will increase export prices by Q3 2008 as raw material costs continue to rise. In fact, half of the makers surveyed for this report plan to do so. The companies that are considering price increases will likely implement small changes. Seventy-three percent of the respondents that plan to raise their quotes will limit increases to about 10 percent.
• In the next 12 months, suppliers will focus R&D efforts on releasing furniture made of less expensive wood to keep quotes down. For instance, makers have already begun using lumber from fast-growing and fruit-bearing trees. Some suppliers, on the other hand, have started to expand their base of wood sources.
• Makers will continue to address the growing demand for responsible forest use by sourcing wood from FSC-certified or government plantations.

This report covers all types of indoor and outdoor wooden furniture produced in Indonesia, including chairs, tables, cabinets, beds, consoles and furniture sets. Most suppliers focus on just two or three products, and tend to use just one or two materials in their furniture.

The Products & Prices section in this report details the features and price ranges of furniture made in Indonesia. This includes the latest trends in style, materials and finish.

The Industry Overview discusses key issues affecting exporters and elaborates on the composition of the industry, highlighting key characteristics of different types of suppliers.

The majority of furniture makers in Indonesia are privately owned, while a few are foreign-invested. This report reflects the nature of the industry with 90 percent of featured suppliers wholly Indonesia-owned. Many of the foreign investors are from the Netherlands.

Production of indoor and outdoor furniture is concentrated in Bali, Yogyakarta and Java, where the majority of companies interviewed for this report are based. Nearly half of surveyed suppliers have factories in Bali, while a third have facilities in Java.