The local houseware industry produces high value added products primairly using indigenous raw materials and manual skilled labor. Materials used are mainly local fibers (i.e. abaca, sinamay), sea shells, clay, leaves of local plants, and coconut materials. Numerous small enterprises comprise the sector with the manufacturers supported by an extensive network of raw material gatherers, suppliers, traders and subcontractors.

Product lines in the houseware sector are varied and includes baskets and wickerwork, ceramics, shellcraft, stoneware, and glassware. Among these items, baskets and articles made from textile materials make up the major product line and exports of the sector. Over the past five years, the industry has shifted from the low-end to mid-range and high-end markets to establish a competitive niche in the global market.

The main houseware producing regions include Metro Manila and its adjacent regions (Central Luzon, Southern Tagalog), the Bicol area, Western and Central Visayas. The Department of Trade and Industry (DTI) estimates that there are more than 5,000 basket producers in the country, predominantly made up of micro to medium firms. Direct employment of these companies is placed at around 40,000. More people are also employed among the materials suppliers and subcontractors. Aside from basket producers, there are also firms specializing in other houseware items such as ceramics and stoneware. These number several hundred more enterprises.

Global houseware imports in 2004 was valued at US$10.2 billion*. This is 17% lower than the world import level of the previous year. The United States remains the largest houseware market, accounting for more than a third (34%) of world houseware imports in 2004. On the supply side, China supplied 42% of world houseware exports for the same year. Exports of houseware from China have also grown consistently from US$2.4 billion in 2001 to
US$3.7 billion in 2004. Much of this goes to the United States and Europe. In 2004, China supplied about two thirds or US$2.1 billion of U.S. houseware imports. For the same year, member countries of the EU25 region imported 31% or Euro 1.1 billion of their housewares from China. Philippine houseware exports have been on a decline over the past few years, decreasing by an average of 7% annually from 2000 to 2004. Of the US$170 million houseware exports in 2004, almost two thirds (63%) is comprised of baskets, wickerworks and articles of textiles. Half of Philippine houseware exports in 2004 went to the United States.

The local houseware sector is dominated by micro, small and medium enterprises. Production work is mainly manual and there is substantial usage of subcontractors. Only the most basic machines and tools are commonly used by houseware firms. Much of the raw materials used is sourced locally with few imported components.

In the houseware value chain analysis, the industry’s main concern cover their inbound logistics, followed by operations activities. There is a high variability in the quality of raw materials procured by manufacturers due to lack of standards, quality control systems and proper handling skills on the part of the gatherers and suppliers. R & D on raw materials also needs to be expanded to improve quality and durability. In addtion, there is also a lack of reliable sources of information on raw materials supplies.

In operations, the industry needs to improve production efficiency. There is a lack of equipment, standard processes and technically trained workers which contribute to relatively high production cost, wastage and delays in deliveries. Quality control systems also mainly manual and rely on frequent inspections. Technology is not properly utilized and there is a reliance on locally fabricated equipment and tools which may not be of good quality.

Subcontractors suffer from the same deficiencies and a severe lack of resources which affect the quality of their work. Improvements in traditional work habits and processes come slowly and need sustained support to effect any beneficial change. The industry also needs more designers with updated knowledge of both the market and manufacturing considerations.

In outbound logistics, more R & D on packaging materials and techniques are needed. The use of information and communications technology (ICT) to manage outbound activities also needs to be increased to raise efficiencies and reduce costs. Shipping cost remains high which further add to the cost of exporters. In marketing, there is still a lack of marketing programs for the industry based on an appropriate market strategy. Market development cost remains high but is badly needed by the sector given the declining performance in exports over the past few years.

The local houseware sector needs to reassess its position in he export market and find a way of reversing the decline in exports. Firms should sustain the shift to middle and high end markets where they have better chances of competing in terms of quality and product features. There is also a need to find and develop alternative markets to the United States where much of the industry’s exports are presently directed. Market intelligence on buying countries and competitors also need to be improved to enable firms in the sector to develop a more appropriate marketing strategy. Together with such marketing activities, the industry needs to improve production efficiency through the houseware value chain especially in the quality of raw materials, work of subcontractors, expanded use of technology in manufacturing and improved worker productivity.


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