The level of exports of furniture from Jepara, continues to decline. The decline is the effects of competition from Vietnam and China furniture. The declining is also as the effect of some internal problems like material cost. The material cost will arise when the fuel price arise but the material cost is hard to down when the fuel price was down. Rising operating costs have eroded Jepara Furniture
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The wood industry in the district of Jepara is not uniformly spatially distributed, but is clustered at different locations and densities, each of which had to be characterised and quantified. At the outset, the position of all industrial or commercial enterprises and workshops that use,process, display, or store wood material, including the smallest family businesses located on even the smallest streets and side roads. Each unit was categorised based on the main economic activity (workshop, showroom, log park, sawmill,warehouse, and ironmonger), and the and the size of the unit (small, medium, and large).

Industry in Jepara comprises a complex network of relationships and flexible subcontracting.

The enterprises of Jepara can be categorized into three groups.

• The first consists of integrated enterprises, which produce essentially finished or prefinished products from an input of unprocessed roundwood.
• The second group comprises those enterprises (log parks and sawmills)that specialise in initial processing of the raw material to produce simple sawn timber for the third group.
  
• The third group is made up of workshops in which the input comprises sawn timber and various components, pieces, and sets of products at different stages of manufacture, which are then assembled into a finished product.

Maybe you interested with my previous article about Jepara Furniture Industry is Stimulating people economic sector Read the full story

The ancient carving industry in Jepara is famous locally and worldwide. Its reputation has attracted many related economic activities linked to wood production and processing, especially furniture making. Today, Jepara is a typical example of what is called an ‘industrial district’1 in which growth in one sector (furniture manufacturing) has attracted thousands of small to medium-sized industries to the Kabupaten (administrative district)2. These in turn have created an opportunity for further subsidiary activities and industries. The many showrooms in Jepara are a microcosm of the range of furniture, designs, know-how, traders, and transport options on offer throughout Java.

This concentration of industrial activity has stimulated a substantial economic boom in Jepara and surrounding areas and attracted local political support. For example, the need for container trucks to export furniture led the Bupati to have some major roads in the district reclassified as ‘provincial class’ roads. This allowed container trucks to reach most parts of the district, stimulating economic growth by attracting more people and activities, generating new trade and industry, and elevating economic activity around Jepara to a new level. The minimum wage of workers is reputed to be significantly higher in Jepara than in the rest of the province.

The dynamic nature of the Jepara industrial complex also affects the Indonesian wood products chain, attracting timber produced from forests located throughout Central Java and beyond, including the outer islands. Thousands of trucks and pickups bring logs into the district from distant places, including state and community forest plantations. In addition to serving the huge domestic market in Indonesia, Jepara is well connected to foreign markets in the USA, Europe, Japan, Hong Kong, Australia and elsewhere, and thereby acts as a bridge between local people, forests and these global markets. Read the full story

In 2004, exports of furniture from Jepara were at a level of 141 million dollars, according to an industry official in Jepara.

Jepara famous by its furniture industry. The production of teak and mahogany furniture, employs approximately 800,000 people in the town, working in a large number of mainly small workshops. The trade has brought considerable prosperity to Jepara, well above the average for Central Java. Since there is a large export trade, the fall in the value of the rupiah against the U.S. dollar and other currencies has probably led to an increase in income for the furniture exporters.

Jepara furniture industry in an industry dating back to pre-colonial times and that grew to serve the needs of carved wood furniture for the royal families, skilled wood-workers ply their trade in age-old fashion, producing handcrafted teak and mahogany furniture for export around the world.

The wood-furniture industry based in Central Java today comprises more than 30 furniture clusters composed of numerous medium, small and home based enterprises, and is Central Java's largest export earner, representing around 22 per cent of total export value. It is also a major engine for generating employment and income for hundreds of thousands of people from this province.

The industry profited in the 1980s and early 1990s from growth in domestic consumer demand that made quality furniture more accessible to the growing Indonesian middle class. The 1990s brought an increased role in global markets, boosted significantly by a depreciation of the Indonesian rupiah. Indonesia is now the second largest developing country exporter of wood furniture to OECD markets, behind China.

The best of Java's furniture ends up in fashionable boutiques selling traditionally hand-crafted teak items. This is the positive side of globalization - opening new markets and new opportunities for a traditional industry. But there's also a downside. Neighbouring countries have been quick to join the race for profits, sparking fierce competition with cheaper, mass-produced items, and new designs to meet changing consumer tastes.

Increased competition has spurred demand for more "Western" designs, including self-assembly formats. Foreign buyers are also demanding more standardized quality and strict delivery schedules. Meanwhile, the demand for wood has raised logging in the hardwood forests and plantations to unsustainable levels.

The furniture industry alone uses at least 1.8 million cubic meters of wood a year, less than a third of which can be supplied by state-owned teak plantations. The rest comes from elsewhere and is often illegally harvested. Read the full story