**Abstract**
From December 19th to 24th, 2012, a delegation of 22 members from the Qingdao Woodworking Machinery Association traveled to Thailand to explore the local furniture industry and woodworking machinery market. The group was officially invited by SKL Thailand and had the opportunity to meet with ARAK SUKSAWAD, the president of the Thai Furniture Industry Association (TFA). Additionally, Mr. Zhang Youcheng, the general manager of Thailand Dazhou Industrial Co., Ltd., accompanied the delegation throughout their visit.
**The Current State of the Thai Furniture Industry**
Thailand's main furniture export markets are Japan and the United States. However, both countries have been experiencing economic downturns, which has significantly impacted Thai furniture exports. In addition to this, increasing competition from neighboring countries like Malaysia, Indonesia, and China has further challenged Thailand’s traditional advantage in low-cost labor.
Last year, exports to Japan dropped by 15.6%, while U.S. exports fell by 5.67%. More concerning is that all of Thailand’s top 10 export markets saw a decline, with only the UK, Canada, and the UAE showing slight increases. These gains were not enough to offset the overall losses.
Many Thai furniture manufacturers have noticed that business is gradually shifting to neighboring countries with even lower labor costs. This trend is not limited to the furniture industry; it affects almost every sector in Thailand. Only about 11% of Thai furniture factories are considered large exporters, and the government has not made significant efforts to promote technological advancement or attract foreign investment. Instead, the focus remains on promoting Thailand’s handcrafted furniture, natural materials, unique cultural designs, and traditional craftsmanship such as teak and sandstone carving.
Despite these efforts, Thailand faces challenges in sourcing raw materials. In 1989, the country banned commercial deforestation of teak, leading to a shortage of domestic teak supply. As a result, many manufacturers now have to import teak from neighboring countries. To cope, the industry has turned to alternative materials like rubber wood, which comes from old rubber trees no longer used for latex production.
**Visits, Meetings, and Exchanges**
On December 22nd, the delegation visited SKL Thailand, a company specializing in the production of rubber wood furniture, panels, and finger joints. The company shared insights into how declining demand from major U.S. clients has forced them to adapt. In response, they are exploring new markets and focusing on compliance with stricter environmental regulations.
In particular, the California Air Resources Board (CARB) has introduced strict formaldehyde emission standards for composite wood products, effective since January 2009. Formaldehyde is commonly used in adhesives, but its carcinogenic properties have led to tighter controls. Local officials recommend using locally available materials like rubber wood to reduce costs and improve competitiveness. Since wood accounts for 40% of furniture production costs, and labor is also a major expense, improving technology and workforce skills is essential for long-term success.
On December 23rd, some members of the delegation met with ARAK SUKSAWAD, president of the Thai Furniture Industry Association. During the discussion, Chairman Zhao Lide of the Qingdao Woodworking Machinery Association provided an overview of the development of the association and the current state of the Qingdao woodworking machinery industry. Both sides expressed interest in enhancing communication and exploring potential cooperation across multiple fields.
Chairman Zhao extended a warm invitation for the TFA president to visit Qingdao in the near future. In response, President ARAK SUKSAWAD confirmed his intention to do so. Following the meeting, both parties exchanged annual reports and took a group photo, marking a positive step toward future collaboration.
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