JAKARTA, Indonesia – On a narrow piece of land outside the Ligna Furniture headquarters here, workers planted several rows of teak about five years ago. The trees, officials say, will take another few decades to reach full maturity.
Given the length of time, some older workers and management might not be around to see that happen. Instead, the company planted them primarily for aesthetic reasons for the next generation of Ligna workers and management who will carry the company forward.
Like other wood furniture manufacturers, Ligna is working hard to ensure the company’s success in the years and decades ahead. Yet it hasn’t been easy in a recessionary environment that has plagued the United States, its largest export market.
Since the financial crisis in 2008, sales to the U.S. market have fallen 45%-50%, according to Susilo Alexander Hadinoto, director. In early August, the plant was running at about 50% capacity. “It is still very soft out there,” he said. “I can see some light ahead, and some hope at the end of the tunnel, but it is a matter of how strong we are.”
To combat the downturn, the company is looking to do some OEM work and hospitality furniture. In August, it was working at a fast pace to complete its first hotel project.
“Hopefully that will help us fill up our capacity,” he said, adding that the company is still seeking the right OEM partners for residential furniture. Given the country’s large population and supply of plantation-grown hardwoods, he believes Indonesia is well positioned to capture future growth. But he admits there are challenges too. For one, he doesn’t believe the infrastructure is as good as in China.