ASEAN-Korea Centre builds business partnerships

Director manufacturer Indoexim’s international relationships and owner Basuki Kurniawan’s brother, Hartono Gunawan, stands before some of the furniture the company aims to export to Korea.

/ Courtesy of the ASEAN-Korea Centre

By Philip Iglauer

Southeast Asian furniture and interior design companies are finding Korean partners to enter the domestic market with the help of an international organization set up here to enhance trade and investment between Korea and Southeast Asia.

Working with the Association of South East Asian Nations, or ASEAN, governments select ideal companies to invite to Korea. ASEAN-Korea Centre organized an “ASEAN Pavilion” at the Korea International Furniture & Interior Fair 2011, or KOFURN 2011, to display the companies’ furniture and interior decorations.

Southeast Asian companies interested in expanding their businesses to overseas markets accepted the invitation ― many of them coming to Korea for the first time, so they could find Korean importers, wholesale buyers and distributors.

ASEAN-Korea Centre is focused on promoting trade and investment by organizing Southeast Asian participation in three trade exhibitions this year in selected industries: jewelry, textiles and furniture. It helped showcase jewelry companies in April, furniture companies at KOFURN 2011 from Aug. 24 through 28, and textiles at “Preview in Seoul,” organized by the Korean federation of textiles Industries (KOFTI) at COEX from Aug. 31 through Sep. 2. Preview in Seoul is a business trade show which has special highlights on high functional and eco textiles and presents outstanding and distinguished textiles

There were some 140 companies from all over the world represented at KOFURN 2011, organized annually by the Korea Federation of Furniture industry Cooperatives since 1984.

Trade shows like this one are now more important than ever before for a struggling Korean economy dependent on trade for its very survival. The ASEAN economic area represents about $100 billion, second only to Korea’s trade with China. ASEAN-Korea trade has exploded this year, growing 30 percent in the first half.

That’s why the government looks to international organizations like the ASEAN-Korea Centre to work with its partners in Southeast Asian countries, trade promotion centers and government ministries to nurture a crucial area of Korea’s livelihood.

“We focused on some companies that are taking advantage of their respective countries rich natural resources in lumber like teak,” Moon Ki-bong, trade and investment manager at ASEAN-Korea Centre, said. “Indoexim from Indonesia has been particularly successful at this fair, attracting a lot of interest from potential Korean partners.”

Trade ministries of partner countries developed a short list of about six companies for the ASEAN-Korea Centre, and then the center selected two companies from each country.

“We at Indoexim have a particular advantage in pricing because labor costs for us are even lower than in China,” Hartono Gunawan, representing the furniture manufacturer and exporter for his brother Basuki Kurniawan who was busy preparing for another trade show in Germany, said. “Manufacturing costs for labor are about a third of that in China. We got a great deal for Korean retailers.”

Hartono said the brothers have seemingly different names because they do not commonly use their surname with foreign business partners, as it is unwieldy long for them.

Other companies do not rely on low cost quality products as their business model for success. Lightworks Resources of the Philippines focused on design development by manufacturing hip, modern interior designs and furniture from recycled industrial waste like marble powder from one factory in the Philippines and discarded sea shell material from another. The result was extraordinary: Comfortable and elegant chairs, tables and wall decorations.

“We were accustomed to the markets in Europe, America and Japan,” said Rashimi Singh, an elegant older woman who owns and operates the business with her husband Ravi. “It’s altogether a new dance for us.”

“We have architectural and design backgrounds. So, we came here with an open mind and open heart. Korea is a wholly new experience, she added.

Lightworks Resources is a medium-sized company with $2 million I sales annually.

At ASEAN-Korea Centre’s ASEAN Pavilion there were eight of the Southeast Asian association’s 10 member-states participating in the fair: Tube Home and Hin Lim Furniture from Malaysia; PT Indoexim International and Nature Habit from Indonesia; Lightworks Resources and Maze Manufacturing from the Philippines; Picotee International and Deesawat Industries from Thailand; Lin Win ans Asia Wood from Myanmar; Tam Lang Craft from Vietnam; Batik Desamas and Ricoh Handicraft from Brunei; and, Kuda Ltd. and Honey Wood Industries from Singapore.

Laos and Cambodia chose to participate in two different trade fairs of the three that ASEAN-Korea Centre is helping to organize this year.

Picotee International Co., Ltd. of Thailand was venturing into the Korean market for the first time as well. “We are here to learn more about the Korean furniture market and to find a partner,” said Am-Orn Srisajjakul, Picotee marketing manager.

The Thai furniture manufacturer worked closely with the country’s trade promotion office and ASEAN-Korea Centre to embark on their goal of expanding their approximately $40 million in annual sales.