The export value of Thai furniture and home decorative items will be lower than expected this year, due mainly to the global economic slowdown and rising manufacturing costs, exporters said yesterday.

They said that exports of their products had dropped since last year. Moreover, they believe export growth next year will be lower again.

Commerce Ministry permanent secretary Karun Kittisataporn said the export value of home decorative items, toys and furniture was expected to reach US$1.1 billion or $1.3 billion (Bt41.12 billion or Bt48.59 billion) this year.

The exporters said the Bangkok International Gift Fair and Bangkok International Houseware Fair 2006 (BIG and BIH), which opened yesterday and will run until Sunday at Challenger Hall, Impact Muang Thong Thani, should help drive export growth, but they expect buyers to place smaller orders this year due to many negative factors.

The owner of Thai International Handicraft Ltd, Santhiti Trakarnsakdikul, said the export value of the company's wooden furniture and decorative products had dropped by 10 per cent to 15 per cent since early this year.

"Some importers have delayed or reduced their orders, saying that they are not confident in the Kingdom's politics," he said, adding that the company's overall sales revenue is expected to fall by 15 per cent while its production costs will increase by 10 per cent. As a result, it expects flat growth or a slight contraction.

"The baht's appreciation has hurt exporters the most," Santhiti said. "My company is unable to increase its selling prices because importers will turn to other countries."

Thai International Handicraft relies on export income for about for 90 per cent of its revenue. Its markets include the US, EU countries, Japan , Taiwan, the Middle East and South America.

To maintain its competitiveness, Santhiti said the firm will decrease its manufacturing costs while creating new products designed to attract customers.

The export manager of Fineline Industry, Janchai Saengsai, said her company's orders will fall this year. At the same time, rising costs of raw materials and transportation and the baht's appreciation have eaten into its income.

"We are seeing that the number of visitors coming to the BIG and BIH fairs is lower than the target," she said.

Due to high competition, Fineline cannot increase its sales prices. The company's main export goods include design furniture under its own Sofine brand, going mainly to European markets.

Janchai said some of Fineline's trading partners had switched to China because of its lower prices.

A sales officer for the Shin Kwang Hwa Paper Mfg Co, Samart Klabbankoh, said his company planned to increase its domestic market to avoid export risks, particularly from the baht's appreciation.

The company's exports currently account for 90 per cent of its income, and it wants to take part in several international exhibitions to capture more customers.

The executive director of the Thai Trade Centre in Los Angeles, Songseen Susevi, said about 36 American importers will be visiting the Bangkok fairs. Although their orders will remain unchanged, Thai exporters' income will drop because of the strength of the baht.

Petchanet Pratruangkrai

The Nation