Craftsmanship gives a leading edge

Vivat Viphavaphanich, managing director of the country's oldest rattan furniture producer, sees great opportunities in the coming advent of the AEC

Vivat Viphavaphanich, managing director of Hawaii Thai Export Co Ltd, is set to face the challenges of the Asean Economic Community (AEC), which will become effective in 2015.

One of the country's oldest makers of rattan furniture, Vivat inherited the business from his father, who founded the company in 1956.

"My father started the business making furniture from teakwood as well as rattan. At the time we mainly served American GIs based in Thailand during the Vietnam War."

"When the war was over and those GIs went home, they purchased a lot of rattan furniture and brought it home. We thought they liked the products so much, so decided to produce rattan furniture for export to their home markets.

"That's how Hawaii Thai has grown over the past several decades. Originally, the techniques of weaving natural rattan into furniture came from the Chinese.

"In the older days, the Philippines was also a major producer of rattan furniture. In Thailand, we were among the first makers of this kind of hand-made furniture.

"Regarding the AEC, we see our products as being similar to handicrafts. They are aimed at the upper-end market, and in fact Asean is probably the only place where this kind of furniture is made.

"Given the shortage of natural rattan, we have had to switch to synthetic raw materials. Today, synthetic rattan is of high quality and it's more durable and good for both indoor and outdoor furniture.

"Our products are mainly all-weather furniture, so you can put them beside the swimming pools, in the garden or your living room.

"Generally speaking, rattan furniture has unique designs and we pride ourselves on such a competitive advantage. Today, we have three in-house designers but we also work with many local and international freelancers.

"Some of our award-winning authentic designs, such as the 2004 armchair with canopy, have seen many copycats in Europe, so it's not just Asians copying western designs. There are also western copies of Asian designs.

"So in terms of unique designs, we're quite competitive, and in the high-end markets there is less competition in terms of pricing. We also produce high-end furniture for world-renowned luxury fashion brand-names.

"In the top-end fashion business, Gucci never competes against Channel. They have their own unique designs, so they are not in any direct competition. Therefore, we're not concerned about cheaper products from China which may flood the domestic and other Asean markets when there is a freer flow of imports and exports with zero tariffs on most products.

"However, we are also planning to expand our production capacity into lower-cost countries so that our products will be more competitive in more markets.

"Cambodia, Indonesia and Burma are among the potential places where our new factories will be set up to take advantage of the single Asean market and production base. We may also set up a regional sales and marketing office in Singapore to tap Asean-wide markets and beyond, covering contract customers such as hotels and restaurants.

"Our competitive advantages lie in design, high-quality materials and production techniques.

"For other Thai small- and medium-sized furniture makers, the AEC will offer both opportunities and threats, as you need to adapt to take advantage of the market.

"As far as the government is concerned, we need to come up with specific industrial standards for furniture ahead of the upcoming opening of the domestic market to more foreign competitors," said Vivat, who is also treasurer of the Federation of Thai Industries' Furniture Industry Club.