5.0 CASE STUDY THREE, FOREST-BASED HANDICRAFTS IN INDONESIA

5.1 Introduction
5.2 Historical Background
5.3 Economic Characteristics of Each Enterprise and Region
5.4 Production and Marketing
5.5 Issues and Constraints
5.6 Conclusions and Recommendations
Appendix 5.1 Expenses and Income from Wood Furniture
Appendix 5.2 Expenses and Income from Rattan Furniture

by: Satyawati Hadi

MAP SHOWING STUDY AREAS IN JAVA

5.1 Introduction

A combination of government policies that favor the small-scale household-based manufacturing sector while limiting the export of unprocessed forest products has helped to spur the growth and development of forest-based small-scale enterprises (FBSSEs) in Indonesia in the last decade.

With 80% of the population in rural areas engaged in the agricultural sector, small-scale enterprises are ideally suited to supplement income and employment at the household level. Small-scale enterprises do not require a high level of education or complex technology. They are labour-intensive and do not depend on large capital investments. Because of these advantages, about 75% of the present labour force is absorbed by small-scale household industries. The government has recognized the importance of the small-scale sector and since the mid-1970s has promoted a number of innovative schemes to encourage further development of this sector.

Blessed with 126 million hectares of tropical forests covering 66% of its total land area (in 1980),¹⁴ Indonesia has historically been a timber exporting country. Until the 1970s indigenous forest industries only produced round logs which were exported in unprocessed form to developed countries. However, from 1976 onwards, the export of logs was restricted to 90% and then, in 1979, to only 10% of the total volume of forest-based exports. Finally, in January 1985 log export was completely banned.

¹⁴ World Resources Institute, 1986. World Resources 1986. Basic Books Inc. New York.

With the ban on the export of round logs and the encouragement given to the small-scale sector, the processing and manufacture of articles made from wood and other forest products began in earnest. Among the most prominent and successful FBSSEs to have developed are wood carving and the manufacture of rattan furniture and household goods. Not all FBSSEs have continued to prosper however. The traditional umbrella and clog making crafts represent two industries which boomed at the start but are now declining because of heavy competition from plastics and other synthetic materials and a drastic change in market demands. This paper analyses these four specific FBSSEs, two booming and two fading; it describes their problems and prospects and recommends solutions to the challenges which they face.

For this study, specific study areas were chosen for primary data collection. Jepara in Central Java was chosen for the study of the wood-carving industry. It is smaller in area and the producing units are more closely clustered there than in other areas like Bali where wood carving is also prominent. The area studied for the rattan industry was Tegalwangi in Cirebon County where rattan manufacturing has had an interesting history. Tasikmalaya County in West Java was the area chosen for studying umbrella and clog production. Figure 5.1 shows the location of the study areas used in these case studies.

Field research was undertaken between June and October, 1985. Sample firms were chosen at random from the larger rattan and wood carving enterprises. In addition to firsthand observations and data collection, the paper uses data from the Central Bureau of Statistics and other government agencies involved in trade, commerce, industry as well as forestry and related activities.

5.2 Historical Background

5.2.1 The Wood Carving Industry

Wood carving in Jepara started in the 15^th century. It was originally considered an art form. Products were exclusively owned by the nobility and were not for commercial consumption by the common people. The development of the industry was very slow and it went unnoticed until the 18^th century when Kartini, the first Indonesian woman leader, popularized the art form. Wood carvers began producing articles for trade from that time.

Major institutional assistance to the industry began in 1966/67 when the government established a Unit for Technical Assistance (UPT for Unit Pelaksana Teknis) in Jepara. The objectives of the UPT were:

- to promote the production and the marketing of handicrafts products;

- to help household manufacturers and small-scale firms improve processing techniques and business management skills;

- to train craftspersons in the use of machinery;

- to improve the design and quality of wood handicrafts;

- to assist with funds and licencing and other problems.

At the establishment of the UPT there were around 500 wood-carving production units operating at various levels of production.

The industry began to boom in the 1970s with the provision of this technological guidance and market information by the Department of Industry. By 1984, about 1,560 units were in operation, dispersed over 7 districts covering 77 villages and employing around 16,000 skilled labourers.

5.2.2 The Rattan Handicrafts Industry

Not much is known about the history of the rattan handicraft industry in Cirebon County. It was recorded that the industry was started in 1936 in Tegalwangi Village of Plumbon District by a craftsman named Samaun, a resident of Bodelor Village. Before starting his own business he worked with a Chinese rattan cane trader who manufactured window screens and other handicrafts made of rattan. As time went on, the people of the village began to develop their rattan handicraft skills and these were then transferred to the younger generations and to surrounding villages.

In 1974 the Institute for Research, Education and Social Economic Development (LP3ES for Lembaga Penelitian, Pendidikan dan Pengembangan Ekonomi dan Sosial) conducted a survey of small-scale industries in West Java which noted this growing rattan industry. As a follow-up, LP3ES trained several craftspersons and entrepreneurs to improve the design and quality of products and efficiency of management. Training was conducted twice, each session lasting 6 months. In 1974 a cooperative of rattan handicraft manufacturers and entrepreneurs was established. However this has since broken down, as the executive board of the cooperative is dominated by a few big firms who work for their own interests.

5.2.3 The Umbrella and Clog Handicrafts Industry

The umbrella and clog handicraft industries of Tasikmalaya were very famous in the past. As with most FBSSEs, their products which are now made for markets were originally made for local household consumption. The umbrella making industry was in existence by 1885 when the products were made by the people for their own use. Manufacturing for sale was started in 1903 by an Indonesian, Mr. Bun Wan, of Chinese descent. The factory was located in Babakan Payung¹⁵ Village, a township of Tasikmalaya. From there, umbrella making spread to other districts in the area.

¹⁵ Payung means umbrella in Bahasa Indonesian.

The industry boomed in the 1950s with over 600 households and firms engaged in the umbrella handicraft business. But in 1964, many firms went out of business because of competition from imported plastic umbrellas. As a result, only two units were engaged in the umbrella-making industry in 1980 and four were reported in 1984.

The commercial clog-making industry is of more recent origins. In their early development, dogs were very simple and used lower quality woods. This industry boomed during the Japanese occupation in the 1940s because shoes and raw materials for their manufacture were not available. Since that period the quality of clogs began to improve. The heels and the sides of the soles were carved artistically. It was at this time that the industry gained its popularity in the country. Its center was Kampong Rahayu of Sukahurip village in Cirebon District, Tasikmalaya County.

From 1962 to 1966, the demand for clogs increased dramatically. As substitute materials like rubber and plastic began to take over the domestic market, the industry had a brief export boom from 1975-1980, when Australia provided the major market for Indonesian dogs. However, problems with quality control resulted in a dramatic drop in local production. At the moment, only two firms are engaged in clog making, principally because of their determination to preserve the tradition.

5.2.4 Government Policy and Institutional Support

From 1968 to the middle of the 1970s government policies emphasized the development of large-scale, capital-intensive industries. However, with the beginning of the second five year development plan the government moved to the ‘walk on two legs policy’ which gave equal attention to the establishment of small-scale, household-based industries. It recognized the critical role that small-scale industries play in providing widespread employment and generating income as studies showed that 75% of the total labour force was employed in this sector.

To back up these policy decisions a number of credit facilities and support institutions were created to help craftspersons and entrepreneurs start up small-scale manufacturing units. Among these are:

(a) The “Kredit Investatsi Kecil” or Small Investment Credit policy which aims at helping small-scale or household industries to obtain credit from the Government Bank of Indonesia in amounts up to Rp 5 million with 1.5% rate of interest per annum. The duration of the credit is 10 years including a 4-year grace period. In 1981 the credit ceiling per person was raised to Rp 10 million and more banks were appointed by the Government Bank to channel loans. These include: the 1946 National Bank of Indonesia, People Bank of Indonesia and the Local Bank for Regional Development.

(b) Along with the Small Investment Credit, a permanent working capital credit fund “Kredit Modal Kerja Permanent” was also made available for the sector. The interest rate was 15% per annum in 1979 and lowered to 12% in 1981. The duration of the credit is three years including a one year grace period. This fund aims at providing small-scale firms with working capital to expand their production as well as their income.

(c) A number of regional institutions were established such as the “Unit Pelaksanaan Teknis” (UPT) or Technical Assistance Unit in Jepara, with the intention of extending training and technology to craftsmen.

(d) Finally, in 1983, a National Council of Handicraft Industries was set up. The Chairman of the Council at the central office was the Vice-President’s wife. This council has branches in the provinces. At the provincial level the board is headed by the Governor’s wife. The Board’s tasks are as follows:

i. to improve the skill of craftspersons;

ii. to develop regional handicraft potential;

iii. to give guidance to the small-scale entrepreneurs in order to improve the marketing techniques and the quality of the products;

iv. to advertise handicraft goods;

v. to promote the creativity and skill of crafts-persons in the production of handicraft goods; and,

vi. to accommodate the exchange of ideas and information among craftspersons as well as between the traders and the government regarding the problems they face.

5.3 Economic Characteristics of Each Enterprise and Region

The national economy of Indonesia faced hard times during the period immediately preceding this study (1985). The impact of a worldwide recession contributed to a drop in the country’s foreign exchange reserve, and real prices (after inflation) of crude oil dropped. Added to this, a prolonged dry spell plagued the country, causing a drop in agricultural production, with the exception of rice.

The number of workers employed by small-scale and household industries in 1974 was 1,953,781, of whom 40.43% was absorbed by forest-based handicraft industries. The number increased by 347,951 in 1979, but the income generated from handicraft activities as a whole, decreased over time. In spite of this, the handicrafts-based sector of small-scale industry continued to expand. This may be due in part to the fact that the handicraft-based sector is particularly important to the poor as a supplemental source of income generation. In fact handicrafts in Indonesia contribute as much as 7% of the family income for the poorest¹⁶ portion of the population.

¹⁶ Classified as those with annual incomes less than the cost of 320 kg of rice.

Examples of wood carving

5.3.1 Wood Carving in Jepara County

Wood carving and rattan handicrafts are practiced all over Indonesia. Table 5.1 illustrates the distribution of these enterprises in different provinces in the country.

One of the major centers of the wood carving industry is in Jepara County in Central Java. In Jepara the number of manufacturing units in the small-scale and household levels kept growing despite worldwide and national recession. From 1979 to 1984, large- and medium-scale industrial manufacturing units in the region dropped sharply from 490 to 210 units in 1984. On the other hand, small-scale units grew from 2,370 units in 1979 to over 7,600 units in 1984. Forest-based handicrafts accounted for over 80% of the total number of production units in the small and household industry level.

TABLE 5.1 Distribution of the Percentage of Producing Units in the Top Five Provinces in Terms of Number of Wooden and Rattan Handicraft Industries in Indonesia in 1981

Province	Wooden Handicraft	Rattan Handicraft
Bali	29.51	0.34
East Java	25.64	15.00
Central Java	25.45	4.14
West Java	7.11	8.00
Yogjakarta	3.45	0.34
South Kalimantan	0.19	54.00
Total Number of Producing Units	7,336	5,337

Source: Ann., 1981. Dept. of Industry, Directorate General of Small-Scale Industry.

As the number of large- and medium-scale production units decreased, so did the number of labourers in those industries. The number of people employed in large- and medium-sized enterprises dropped from around 4,600 workers (24% of all labourers in industry) in 1979, to just over 3,100 (7%) in 1984. In the small-scale and household industry, however, numbers increased from 14,800 persons (75%) in 1979 to 37,700 persons (90%) in 1984. During this time over 50%¹⁷ of all industrial labourers were people employed in forest-based manufacturing and handicrafts.

¹⁷ This percentage is based on the fact that over 75% of the total labour engaged in small-scale and household industries was involved in handicrafts and 80% of those in handicrafts were in the forest-based products sector, so: .90 X .75 X .80 = .57 or 57%.

Besides absorbing more of the work force, forest-based handicrafts also provided better incomes. The average income of a labourer in the forest-based handicrafts industry has been consistently higher than the average earned by other labourers in other handicrafts or other small-scale enterprises. This is illustrated in table 5.2.

TABLE 5.2 Average Yearly Income of Labourers Engaged in Small-Scale and Household Industry, Handicraft Industry and Forest-Based Handicraft in Jepara County from 1979 to 1984 (Rp 1,000 per year)

Year	SS and HH	Handicraft	Forest-Based Handicraft
1979	423	502	546
1980	659	687	751
1981	602	662	712
1982	171	394	473
1983	794	912	930
1984	764	830	846

Source: Aim., 1979-1984. Jepara Industrial Office. Internal Report. Derived from original data.

Javanese carpenter at work

In Jepara, wood-carving handicraft units occur in seven out of ten districts. There are 38 Sentra (Centers) where production units are clustered together, and 34 scattered single units. Figure 5.1 shows the location and distribution of wood carving Sentra in Jepara county.

FIGURE 5.1: Location and Distribution of Wood-Carving SENTRA in Jepara County

5.3.2 Rattan Handicrafts in Cirebon County

The major center for rattan production in Indonesia is in Kalimantan. However this case study focuses on a relatively new rattan processing industry in Cirebon County in Western Java.¹⁸ This part of Java is flat, consisting mostly of agricultural land dominated by rice paddies.

¹⁸ Rattan handicrafts are produced in only two counties in West Java, Cirebon and Bandung.

Figure 5.2: Map of Cirebon County

Cirebon is one of the poorest counties in West Java. During the five year period 1975 to 1980, the industrial sector grew more rapidly (12% per year) than did agriculture (8%). More importantly the industrial sector proved its capacity to generate more employment, accounting for 10% of the total labour force in 1980.

In 1984, there were over 850 forest-based handicraft units employing 3,400 labourers and producing a total output worth Rp 550 million¹⁹. The bulk of the units (approx. 400) involved in rattan processing in West Java, are found in Cirebon county.

¹⁹ Rp is the abbreviation for Indonesian rupiah. 1 US$ = Rp 1,698 (1988).

The rapid growth of the rattan industry in Cirebon is reflected by the diversification and growth of different businesses. There are now four types of entrepreneurs engaged in rattan handicraft activities in Cirebon county. They are:

(a) those supplying rattan canes or primary raw materials to the handicraft manufacturers and to the processors of rattan canes into rattan peel and rattan heart (from 1 in 1975 to 8 in 1985);

(b) those processing rattan canes into rattan heart and rattan skin (15 in 1975 to 60 in 1985);

(c) those manufacturing consumer handicraft goods (81 in 1975 to 277 in 1985); and,

(d) those manufacturing woven rattan handicraft goods (14 in 1975 to 54 in 1985).

5.3.3 Umbrella and Clog Industries of Tasikmalaya County

Unlike rattan and wooden handicrafts, traditional umbrella making is found only in seven provinces of Indonesia, i.e., West Sumatra, West Java, East Java, Bali, West Kalimantan, South Kalimantan, and North Sulawesi. Tasikmalaya County in West Java is one of the traditional centers.

In Tasikmalaya, despite the drop in the number of units producing handicrafts in general, the forest-based handicraft industry experienced an increase of 4.01% per year on the average. Over 90% of the labourers engaged in small-scale and household industries were absorbed by handicrafts activities. Out of the handicraft industry group, the forest-based handicraft industry employed 9% of the labour. This share of forest-based handicraft industry was quite stable until 1982 when it suddenly dropped to 5.9%.

This drop was due to the fact that many firms went out of business as a result of declining foreign demand for their products. After 1982, exports of clogs to Australia stopped altogether, and domestic consumers switched to plastic and rubber clogs. The combination of these two events brought wooden clog production to the verge of extinction. Many clog producers switched to making “modem clogs” which combine a lower laminated veneer sole with an upper sole of real or synthetic leather. These “modem clogs” are marketed in the rural areas only. Today, only two entrepreneurs are still engaged in traditional clog production.

5.4 Production and Marketing

5.4.1 Raw Materials

5.4.1.1 Wood Handicrafts

The main raw materials for wood carving are Teak (Tectona grandis). Mahogany (Swietenia macrophylla) and Sonokeling (Dalbergia latifolia). Teak is the most highly valued handicraft wood and is used 96% of the time. Sonokeling (also known as rosewood) is a more expensive wood with very fine grain. It is harder to work with than teak and is used to a lesser degree for furniture and is often mixed with teak for heavy furniture. Mahogany is mostly used for small items like souvenirs and decorative items. In regions where teak is very difficult to get, mahogany is being used to make regular furniture without carvings.

An example of wood carving

Since Jepara County is a poor wood-producing country with an average annual timber production of 18,000 m³, logs are imported from neighboring counties including, Cepu, Randublatung and Kendal, and from East and West Java, where there are much higher production volumes. Since high quality logs are not required, lower quality and lower priced logs from West Java are mainly used, despite the long distances they have to travel.

In Java, state-owned Perhutani (Indonesian Forest Corporation) is the sole supplier of logs through auctions, either directly to entrepreneurs with handicraft units, or through wholesalers who resell them at second auctions. This trading system is called over-kapling and buyers bid on the basis of a list provided by the wholesaler. Retailers allow purchasers to inspect individual logs, and the price paid per cubic meter is consequently much higher. Because Perhutani demands cash payments, most manufacturers prefer to buy from wholesalers or retailers. This allows them to buy on credit which is often paid back with finished handicraft products.

5.4.1.2 Rattan Handicrafts

Rattan canes for the rattan handicraft industry in Cirebon come from Kalimantan, Lampung, and Sulawesi Provinces. They are of “B” and “C” quality; the “A” quality is very hard to obtain. There are several rattan species used in rattan handicraft including Calamus manas, Daemonorops melanochaetes Bl., Calamus inops BECC, Texmani odebron, Calamus caecius, Daemonorops forbesi, and Daemonorops oblonga.

Rattan enters Cirebon through the ports of Surabaya, Jakarta and Cirebon. In Cirebon, there are eight entrepreneurs dealing with the import and sale of raw material. Some of them are in direct contact with collectors operating in Lampung.

5.4.1.3 Umbrellas and Clogs

Traditional Javanese umbrellas are made out of wood, bamboo and cotton muslin cloth. The stem is usually made of tisuk (Hibiscus macrophyllus), mlinjo (Gnetum gnemon) and kenanga (canangium sp.), while the ferrule which is the ring which holds the spokes around the stem, is made of a local species called kijangkurng which usually grows in gardens as well as forests and is not considered a valuable species for other purposes. This wood is sturdy, durable, tough and very economical. The ribs are made of bamboo (Gigantochloa verticillata) which is strong and flexible. Other forest products include a traditional glue known as manjel made from the sap of certain climbers, and shellack used for polishing.

Clogs are made from the timber of jewunjing (Albizia falcataria), lame (Alstonia scholaris), kihuru (Macaranga rhizinoides) and damar (Agathis loranthifolia).

5.4.2 Production Processes and Technological Level

5.4.2.1 Wood Handicrafts

The conversion of logs into sawn wood is carried out using traditional manual or mechanized handsaws. As the volume of trade has increased in Jepara, 64 units now use mechanized bandsaws as compared to 3 units in 1979. The technological level employed in wood carving is still traditional. Although machinery is available in the market, few craftspersons can afford to buy it. Psychological reasoning also plays a part in this as many craftspersons feel that mechanized tools are not as handy and fast as manual took.

For the production of high quality furniture, sawn wood is well seasoned. Firms in Jepara usually use solar drying since the cost here is minimal. Due to the increasing foreign demand for carved furniture, a number of firms are realizing the importance of the dry-kiln. Once furniture parts are shaped, they are carved according to the desired design. When carving is finished, the pieces are sanded to smoothen the surface before it is polished. Only then are they assembled to make the finished product.

The Technical Assistance Unit (UPT) in Jepara has made available several mechanized tools²⁰ to service the needs of the craftspersons and these are slowly gaining popularity. These facilities include kiln drying which is becoming important in the preparation of timber.

²⁰ Wood manufacturing tools include: radial aim saw, table band saw, router, circular saw, copying machine, dry kiln, planner, multi-purpose planner, sander, heavy duty sander, sharpener, jig-saw, and multi-purpose lathe.

5.4.2.2 Rattan Handicrafts

As in the wood handicraft industries, rattan manufacturers are now upgrading their products by utilizing machinery²¹ in their production processes. They are also using the UPT service facilities more often than in the past. Processed rattan cane must be made smooth and straight to produce high quality furniture products. Raw canes are first sorted by quality and size. The thicker rattan are boiled in kerosene or diesel oil for at least ten minutes. They are then rubbed with saw dust and dried in the open air. All the rattan canes are then put through a straightening machine before being sorted once again and packed for sale.

²¹ Some examples of the machinery available at the UPT center include: a straightening machine, a milling machine/surface planer, sanders, saws, joing machine, loams and drills.

Drilling a chair back leg to take stretcher rail

The number of people involved in the further processing of rattan canes, i.e. the production of rattan heart (pitrit), rattan peel (both made by peeling the stem away from the pith), and finely woven rattan peel (antik) (made on a loom), is growing more rapidly than the number involved in actual rattan trading.

Rattan furniture is made directly out of processed rattan canes which are planed in order to make the surface smooth. A frame is made of relatively thicker canes cut to specific measurements for each type of product; components also are cut according to the design and nailed or fastened securely by strings of rattan skin; and finally, the frame is filled with thinner rattan canes or with rattan heart depending on the kind of furniture to be made. Final sanding, coloring (if needed), polishing and rubbing with very fine cloth give the product the natural sheen and beauty which makes it so attractive to customers. Each step in the production process is handled by one person.

5.4.2.3 Umbrellas and Clogs

Indonesian umbrellas differ by locality. Umbrellas produced in East Java are made of paper for ceremonial purposes or of cemented paper for protection against rain. Umbrellas from West Java, Bali, and West Kalimantan are made of cloth. Those from Bali and East Sumatra are for rituals and ceremonies whereas those from West Java are multi-purpose. Plastic umbrellas are now manufactured in limited numbers in Central Java (Jepara County).

The first stage in umbrella production is the making of the frame. The umbrella frame consists of three parts: the wooden ferrule (bola-bola), the bamboo ribs or spikes (jari-jari) and the wooden stem (tangkai). An umbrella has one pair of bola-bola - one is fixed at the top of the umbrella and the other is placed inside the umbrella, to which the ribs are attached with threads. The production of process ferrules is semi-mechanized.

Once the frame is complete, it is threaded with three colors of thread. The white cotton muslin is cut to a pre-determined pattern and glued to the frame, folding the fabric over the thread at the tips of the spikes to make a seam. The cloth is then sprayed with tapioca starch and dried in the sun. When this is accomplished the painting begins. A base color is put on first followed by the outer surface in the desired color. After another round of solar drying the umbrella is decorated with fine floral designs executed with oil paint. Final polishing is done with shellac.

The making of a clog consists of (a) the cutting of the lower part of the clog called bodasan out of a wood-block; (b) the carving, sanding, and varnishing of the bodasan along the side of the sole and the heel; and, © the assembly of the bodasan and the strap of the clog, usually made of leather or plastic, using nails and glue.

The bodasan comes in three heel sizes: 3 cm; 5 cm; and 8 cm. The traditional ones are 3 cm whereas the modem ones come with 8 cm heels. Modem clogs may be made entirely of solid wood or its lower part may be covered with synthetic or genuine leather. It could also be made of laminated veneer. The majority of the production processes are all done by hand.

TABLE 5.3 Monthly Earning of a Businessman From Wood Carving Business Based on the Number of Labourers Employed in Jepara - (1985)

Number of Labours Employed	Number of Firm	Estimated Earning (Rp 1,000)	Number of Labours Employed	Number of Firm	Estimated Earning (Rp 1,000)
1	209	88	18	2	638
2	118	115	19	1	350
3	36	123	20	-	-
4	42	130	21	2	450
5	49	200	22	1	225
6	51	174	23	-	-
7	24	191	24	1	334
8	24	226	25	3	300
9	7	157	26	1	160
10	7	283	27	-	-
11	3	184	28	-	-
12	12	176	29	-	-
13	1	134	30	2	525
14	6	320	35	1	525
15	7	250	42	1	1200
16	3	227	47	1	1900
17	4	206

Source: Aim., 1985. UPT Jepara’s record. A sensus of the industry. Derived from the original data.
Note: n = the number of the firm each of which possessing a certain number of labours employed.

5.4.3 Income Generation and Employment

5.4.3.1 Wood Handicrafts

It is very difficult to determine the earnings of a businessman from the wood carving trade because of the diversity of the products carved, the variation in the quality of the goods, and the financial fluidity of the entrepreneurs at the time of a sale. In this report, the monthly revenue was estimated by subtracting the total expenses incurred in one month from the total revenue in that month. Table 5.3 shows the monthly income of an entrepreneur based on the number of labourers employed.

Clearly, large firms which employ a higher number of workers earn a higher income (over one million rupiahs) per month. The higher the price of the product, the larger the percentage of profit made by the firm. However, the percentage of sale devoted to labour’s wages is greater, the lower the price of the product. This implies that the manufacture of higher value products does not necessarily benefit the workers. Appendix 5.1 gives detailed breakdowns of costs and income derived from the sale of a number of different furniture items.

In the wood carving sector the skill of the workers determine their wage rate even though they may have the same type of job. There are two distinct wage systems: the piece-work system and the daily wage system. The wages received by a worker on a piece work system are higher compared to those earned on a daily wage system. Many factors are involved in the choice between the two systems. The piece-rate system is adopted when production is erratic or diffused and owners cannot exercise adequate control over the production process. In this case quality control is minimal, so if fine quality is not important, and the product is sold to undiscerning customers, piece work is adequate. Not all handicraft items are high quality products. Most of them have standard designs and are intended to be sold on a slightly larger market.

In Jepara county the daily wage system is applied for carpentry work, sanding and finishing in a steady firm while the piece-work wage system is used by firms producing goods of lower quality and on a per order basis. Contrary to this, carving work done by expert carvers is normally paid for through the piece work system. Different wage rates are applied to men, women, and children with the latter two categories earning less.

5.4.3.2 Rattan Handicrafts

The profits made from the manufacture and sale of rattan handicrafts can be quite significant. Compared to wood carving, rattan furniture appears more profitable. Appendix 5.2 illustrates the cost breakdown and profits of entrepreneurs operating rattan handicraft units.

Note again, however, the relatively small percentage of the total sale price which goes to the labourers. Some of the factors favoring higher returns from the development of rattan industry include: (1) the manufacturing process does not require sophisticated technology; (2) raw materials have been comparatively abundant; (3) the entire process depends principally on rattan, simplifying raw material costs and procurement; (4) capital requirements are low; and, (5) both skilled and unskilled labour are needed in the manufacturing process.

Rattan goods manufacturing units employ more or less the same types of workers as the wood carving manufacturers and use the same wage system. In most cases, activities are determined by the receipt of an order. When no orders are received, the workers are fired. When work is plentiful, the first ones to be recruited are relatives - because they do not have to be paid large wages - then, non-relatives who are mostly craftspersons. In this case, the non-relatives are paid according to their productivity.

TABLE 5.4 Breakdown of Costs and Income in Clog Production as a Percentage of the Total

For 20 pairs of Bodasan
Heel size	Raw materials	Wages to labour	Income to owner
3 cm	32%	48%	20% (Rp 675)
5 cm	43%	43%	14% (Rp 575)
8 cm	49%	28%	23% (Rp 1,375)
For finished clogs
Heel size	Raw materials	Wares to labour	Income to owner
All sizes	54%	12%	34% (Rp 9,450)

5.4.3.3 Umbrellas and Clogs

Umbrella making is a tedious job and involves many employees. For the frame alone, at least three persons are involved: one to make the ribs; one for the stem; and one to make the ferrules and fix the ribs to the ferrules. To finish an umbrella, three or more people will be further involved. One person cuts the cloth according to the pattern and glues it to the frame, sprays the cloth with tapioca starch and paints its base color; someone else does the threading of the cloth to the ribs, while another coats the base color of the cloth with oil paint and a separate artist draws or decorates the umbrella.

At present, there are only three persons supplying frames for five umbrella makers in Tasikmalaya. These frame suppliers purchase the ribs and stems from families who make them during their leisure time after working in the rice fields. The ferrule is made by workers who are hired by the frame supplier. The three frame suppliers are getting too old and need to be replaced by younger persons; however, it seems that no other people are interested in continuing the job. And as frame making is a skill that is learned by children from their parents, the three suppliers are worried about finding anyone willing to inherit the skill from them.

In umbrella production the size of the umbrella determines costs and income. Smaller umbrellas cany higher costs for firm owners in terms of raw materials and labourers’ wages. Thus, an owner’s income from small umbrellas falls from 20% to .5% of sales revenues when compared with larger umbrellas. From an owner’s point of view, given an adequate volume of sales manufacturing large umbrellas is a much more profitable enterprise.

With clogs, there are two stages to production, the making of the bodasan and the assembly of the clog. In bodasan production the size of the heel determines relative income. The revenue from the sale of 20 pairs of bodasan is broken down in Table 5.4 for raw materials, wages and owner’s revenue. Clearly the revenue of the firm owner engaged in the business of finishing clogs is much bigger than that earned by the bodasan maker.

Clog manufacturers in Tasikmalaya purchase the bodasan from their makers in Gobras village. Nowadays, only few persons are willing to make bodasan because of the very low wages they receive for the job. Carving the bodasan, on the other hand, is carried out during leisure time after the craftspersons are finished with their work in the fields. The finishing, which consists of polishing and fixing the upper part or strap of the clog, is done in the manufacturer’s workshop.

5.4.4 Marketing

5.4.4.1 Wood Handicrafts

Of the four industries studied, product markets are largest for the wood carving enterprises. This may be due to the large variety of carved products, their practical uses as objects of furniture, and the fact that carved wood products are considered symbols of high culture. Furthermore, a larger number of producers work very hard at promoting their products by actively placing their goods in showrooms or in stores in large cities such as Jakarta, Bandung, Semarang, Surabaya, and Bogor. The competition now in Jepara is so tight that the market can be expanded only by selling products in these large cities.

There are several marketing arrangements in practice. If a craftsperson can peddle their own products they can get payment in cash. Alternatively, small-scale firms and craftspersons may supply a broker with their products, usually made to order and often of lower quality. In this case the broker usually pays in cash and then sends the goods on to traders in the cities. Another common arrangement is for rural and village-based firms to ask a showroom on the highway to sell their goods. In this case, craftspersons may not be paid in advance, but only after the item has been sold. It is also possible that they never actually receive payment for some of their items. Direct sale to a customer is the preferred business, and this occurs when pieces are made to order for a household or the government. In such cases a downpayment of up to 50% is often made before the work is begun.

The promotion of carved furniture abroad was conducted by a number of government agencies through whom large orders arrived. In many cases, local producers were not yet ready for such big orders. Improvements both in production capability and in marketing are still underway.

5.4.4.2 Rattan Handicrafts

Compared to the carved furniture industry, the rattan furniture trade has a limited domestic market. It is focused on the foreign market. Japan, Singapore, Australia, and many countries in Europe are among the steady buyers of Indonesian rattan craft. Orders usually come directly from buyers, hence, the maintenance of a showroom, especially for the small firms, is not considered important.

Some firms, however, prefer to orient their production toward the foreign market through the services of exporters. Orders from abroad are arranged by exporters who look for producers able to fill their orders. This system does not benefit the producers because, in general, the exporters are not likely to pay cash for the merchandise delivered for shipment. In many cases the exporters retain some of the payment until the next order.

5.4.4.3 Umbrellas and Clogs

Regional marketing of umbrellas and clogs is limited to cities in West Java, mainly Bandung, the capital of West Java, and Jakarta, the capital of Indonesia. The clog market extends as far as Tegal and Pekalongan in Central Java where the consumers are mostly Indonesian-Chinese. Clogs are displayed in the stores of the two manufacturers in Tasikmalaya while umbrellas are displayed in twelve stores in the vicinity. The store owner gets a percentage of the total sales. In many cases, when orders come from souvenir shops, the payment to the umbrella producers is not reliable. This condition is highly detrimental to the development of this industry.

Umbrellas and clogs are occasionally sold to foreign tourists visiting Jakarta or Tasikmalaya; and this seems to be the only way of exporting these products. No firm at a regional or a national level is doing any promotion to improve their market; they are simply waiting for orders. The market for traditional umbrellas is becoming increasingly limited because they have a limited use, i.e., for decoration and for traditional ceremonies such as marriages and funerals. The consumption is therefore very small. As for clogs, there is hope that foreign markets could be opened if the quality of the goods increases enough. The Australian market was closed because of problems with the quality of Indonesian clogs.

5.4.5 Ownership Patterns

In each of the four industries studied companies are owned by an entrepreneur. Family-owned businesses were not observed, perhaps in part because government credit policies favour loans to individual owners over family owners. Although entrepreneurs may have relatives who contribute some funds or provide a loan for the operation of the business, these relatives are usually not involved in the actual running of the business.

There are three types of ownership:

(a) The one-person operated firm where the firm owner does the carpentry as well as the carving work. Usually the unit is very small and the quality of goods produced is low because the firm owner has limited funds to purchase good quality raw materials and also has limited skill. He sells what he produces, making him extremely busy, too busy in fact to focus on making any improvements or innovations.

(b) The limited company or firm, usually owned by one person who acts as the manager. The number of hired workers is determined by the scale of production which is in turn affected by the market and by available capital. In contrast to the one-person operated firm, job differentiation prevails here, the degree of which is again determined by the amount of capital available and the scale of production. The standard jobs are carpentry, carving, wood-working, sanding, and polishing. Depending on the scale of production, some firms may have both workshops in the village and showrooms along the Jepara-Kudus Highway or in other big cities. Still others have a combination workshop-cum-display room right where they are located.

Carpenter planing wood in Java

(c) The buy-and-sell firm which does not itself manufacture, but instead purchases merchandise from workshops in the villages and re-sells these at a profit. The goods purchased are in general unpolished; these are polished when they are ready for sale if the customers so desire. As the firm owner does not do much to the merchandise, this type of firm does not employ many workers. Those hired are either general carpenters or carvers who may do repair work when the merchandise is damaged or the final finishing, whenever required by the customers.

In the rattan and wood carving industries a craftsman or a small-scale firm intending to run a business, but not having enough working capital, may obtain credit from a raw materials supplier. If the raw materials supplier is also a handicraft trader, he may take the finished products as payment. With these kinds of credit arrangements possible, those interested in establishing small rattan or wood furniture factories usually do not find obtaining capital the limiting factor. In some ways, the ease with which credit can be obtained has resulted in the unhealthy development of these industries as the rapid growth in the number of production units outstrips the rate of growth in the market for rattan and carved wooden items.

5.5 Issues and Constraints

5.5.1 Wood Handicrafts

Given the present saturation of the market with carved handicrafts, competition among producers and traders is getting tough. This results in a number of problems:

(a) Brokers unable to sell their stock retain some of the payment supposed to be paid to the manufacturers. Consequently, many manufacturers go out of business, even though the sale of the wood products is profitable when based on individual item calculations.

(b) Craftspersons and small-scale entrepreneurs migrate to Jakarta and other big cities where they try to resume their activities but are unable to. Furthermore, because of the present down-swing of the economy, these craftspersons often have trouble finding alternative employment in the labour market.

(c) Unhealthy competition escalates among the firms that are unwilling to share knowledge and resources.

Another problem arising from market saturation is that the value of handicraft goods like wood carvings is decreasing over time while the price of logs is increasing. With the high cost of raw materials, the entrepreneur’s profit margin is reduced, and what is worse, employers try and trim costs by lowering workers’ wages, bringing them to the verge of poverty.

In the domestic market, the carved wood handicrafts are limited to Java because of high cost of shipping to the other islands where there is also a large potential market. There is also great competition with standardized furniture which can be transported in knocked-down form. Carved furniture, made from delicate woods and with ornate carvings, needs to be protected by bulky coverings which increases handling and shipping costs.

While there is interest in developing an export market for carved wooden furniture a number of constraints continue to plague the industry. These include the following:

(a) The unstable moisture content of the products making them lose their quality due to changes in weather conditions.

(b) The lack of standardization of sizes and processes due to a lack of appropriate machinery.

(c) The lack of coordination among the producers so that when orders are not filled they are not shared with other producers. Some producers prefer not to fill orders rather than to share them with other producers, damaging the reputation of the region’s industry as a whole. This kind of rivalry is also often a factor in the breakdown of producer cooperatives.

5.5.2 Rattan Industry

Rattan manufacturers find it difficult to obtain good quality raw rattan because these are currently exported from Indonesia on a massive scale. This limits the manufacturers’ ability to meet the demands of the foreign market for good quality rattan furniture. Furthermore, natural sources of rattan are getting scarce. The remaining resources are now in the far interiors of the islands outside of Java. Sometime ago, rattan canes were readily available in the forests along the sides of rivers, even in Java. But now, collecting rattan has become expensive as well as difficult. The government has started a program to establish rattan plantations but the results of this program were not yet available at the time of this study.

Another constraint is that the control of the export of rattan goods is not in the hands of the producers themselves, resulting in problems when exporters do not pay the producers in full.

5.5.3 Umbrella and Clog Industries

These industries are declining, and their problems are manifold. At present, it seems that neither craftspersons nor manufacturers involved are thinking of reviving these industries. The limited number of uses for umbrellas, mostly for rituals and ceremonies, limits the market to the point of extinction. Another problem faced by umbrella and clog makers has been access to credit. Unlike the wood and rattan handicraft system where credit in the form of raw materials is readily available, a craftsperson wishing to start making umbrellas or clogs would have to raise the capital themselves in order to get started.

The decline in foreign demand for clogs has all but closed the units making clogs. The present availability in large quantities of cheaper umbrellas and clogs made from plastic and other synthetic materials is another cause of the market decline. Finally, the skills used in the processing of both types of goods are being lost. The younger generation is not interested in learning these skills as there are so many other interests and economic activities available to them. Traditional umbrellas and wooden clogs are survivors of another age.

5.6 Conclusions and Recommendations

5.6.1 Expanding vs. Declining FBSSEs

This study focuses on two groups of FBSSEs in Indonesia. In the first group, the carved wood and rattan handicraft industries are dynamic, viable and expanding enterprises. On the other hand, the traditional umbrella and clog handicraft industries in the second group are declining, if not dying. It is important to examine the forces at work in both groups to draw conclusions about the nature of FBSSEs in a dynamic environment.

Both carved wood furniture and rattan handicrafts are thriving enterprises. The wood carving industry in Jepara county, which caters to a domestic market, has almost reached its saturation point. In order to survive enterprises must market their products to distant urban centers where they have to compete with modern, factory made furniture. Transportation of bulky furniture is expensive, making it impossible to tap into markets on other islands in the archipelago. Fortunately, given its significant cultural value and as a symbol of prestige, carved wooden furniture (especially when made of teak) is likely to have a continuing market in the future, especially as the purchasing power of the domestic market is being strengthened.

Planting teak trees in Java

Rattan goods, on the other hand, are being made predominantly for the export market, although inferior quality furniture is also sold locally. There is little indication that world-wide demand for good rattan products will decrease. Indonesia is only just breaking into the finished product market in rattan, having traditionally been just the exporter of raw rattan canes. The rattan industry in Cirebon is relatively new and is an excellent example of the successful adoption of an FBSSE by an enterprising population.²²

²² As noted in Footnote 7, a highly restrictive ban on the export of all raw and semi-processed forms of rattan put into effect in Indonesia in mid-1988 implies some major changes for the country’s rattan production industry. Further study is needed to determine the actual effects of this policy on harvesters and small-scale producers of rattan goods.

The wood carving and rattan enterprises share a number of characteristics: they are both very labour-intensive, with specialized craftspersons undertaking different steps in the manufacturing process; they offer a wide range of products and can respond fairly easily to new product demands; they have both received support and technical assistance from government institutions; they are both dependent on raw materials imported from other parts of the island of Java or from other islands within Indonesia.

Rattan furniture - Occasional armchair with woven cane seat and back

In direct contrast to these expanding industries the umbrella making and wooden clog making industries exemplify the losing struggle with which many traditional crafts are confronted. Used culturally for weddings and ceremonies, the painted cloth umbrellas of Tasikmalaya are no longer in demand. They have been supplanted by practical, waterproof umbrellas imported from Taiwan and made of substitute materials like plastic and metal. Faced with a declining market, this traditional FBSSE is in danger of disappearing from the region. Young people are not interested in learning the art given all the new employment options opening to them. There are now only three suppliers left in the area.

The clog industry is in a slightly different stage. Having had a brief boom as an export item, this traditional wooden-soled footwear is also losing its domestic market in favor of substitute products. Very few craftspersons still make the badosan or traditional wooden sole. Unlike in the umbrella industry, however, a number of traditional clog makers have switched to the manufacture of “new clogs”, using a mixture of veneer, synthetic plastic soles and leather uppers.

This raises an important point. In order to survive as viable concerns in today’s dynamic market, traditional FBSSEs must be able to continuously diversify products to meet demands. Improved production rates and the use of new technology may need to be adopted. This is easier in crafts such as wood carved furniture and rattan handicrafts where new designs can be followed using the same materials, and where a range of products has always been the rule. In very specific activities like umbrella or clog making, it is not as easy to be resilient and innovative. Finally, the government’s efforts in giving guidance and technical training to further the skills of both entrepreneurs and craftspersons in the wood carving and rattan industries have helped stimulate these industries.

5.6.2 Recommendations

There are a number of measures which could help carved wood and rattan handicrafts enterprises to continue to be growing industries.

The present ban on log exports should be maintained but the price of logs for domestic use should not be increased. As it is, concessionaires are still trying to get the same amount of income through sales of logs to the local market, making logs and sawn wood too expensive for the craftspersons to purchase for their use.

Sustainable methods of producing raw rattan need to be developed and disseminated through proper extension activities to counteract the over-exploitation of this diminishing resource. The performance of plantations should be carefully observed in this context.

Better training both in the use of machinery like mechanized saws and dry kilns, and in business management needs to be continued through the extension mechanisms of the UPT (Unit Pelaksanaan Teknis - Technical Assistance Unit). Efforts should be made to ensure that training and guidance reach rural households where people may only be involved in these enterprises on a seasonal basis when agricultural work is slack.

The UPT’s objectives should be expanded to include better marketing of the small-scale, forest-based products. Local as well as export marketing is still a problem as far as this sector is concerned especially for small producers. With UPT’s active assistance, the increasing flow of orders from abroad for carved wood and rattan furniture as well as other decorative accessories may still be adequately filled by the small-scale, forest-based sector.

Credit facilities should be examined and the impact of the assistance schemes should be established to ensure the equity, improvement and stability of the credit granting institutions.

The activities of the National Council of Handicrafts Industries should be evaluated after some time to assess the present situation and plan for future actions.

Government policies and credit facilities have obviously been important to the growth the small-scale sector in Indonesia. It is hoped that through continued institutional support, most if not all FBSSEs in Indonesia can all become expanding rather than declining enterprises.

REFERENCES

Bank Indonesia. 1982 Internal Record. Jakarta, Indonesia.

Biro Pusat Statistik. 1975. Survey on small-scale and handicraft industries. Report no. 1/74, Central Bureau of Statistics, Jakarta, Indonesia.

Departemen Perdanganan, Kantor Wilayah Jawa Barat. 1985. Internal record. Provincial Department of Commerce, Bandung, West Java, Indonesia.

Departemen Perindustrian, Propinsi Jawa Barat, Kantor Wilayah. 1985. Informasi pembinaan industri kecil di Jawa Barat, Proyek Bimbingan dan Pengembangan Industri Kecil Propinsi Jawa Barat. Provincial Department of Industry, Bandung, West Java, Indonesia.

Dinas Perindustrian Dati I. 1976. Pengolohan rotan dan aspeknya bagi lapangan kerja di Kalimantan Selatan. Bahan Lokakarya Hasil-Hasil Hutan. 4 - 6 Agustus. Provincial Department of Industry, Banjarmasin, South Kalimantan, Indonesia.

Dinas Perindustrian Propinsi Daerah Tingkat I. 1982. Promosi dan informasi hasil produksi industri kecil, Jawa Barat. Proyek Pengembangan Komoditi dan Penyebaran Informasi Hasil Produksi Industri Kecil. Provincial Department of Industry, Bandung, West Java, Indonesia.

Kantor Perindustrian, Cirebon 1984. Internal record. District Industrial Office, Cirebon, West Java, Indonesia.

Kantor Perindustrian Tasikmalaya. 1984. Internal reports, 1979-1984. District Industrial Office, Tasikmalaya, West Java, Indonesia.

Kantor Statistik Kabupaten Tasikmalaya. 1981. Produk domestik bruto Kabupaten Tasikmalaya 1975 - 1981. District Statistics Office, Tasikmalaya, West Java, Indonesia.

Nasution, A. 1983. Neraca ekonomi Indonesia. Prisma (Jakarta) 11/12:9.

Republik Indonesia. Departmen Perindustrian. Direktorat-Jendral Untuk Industri Kecil. 1981. Internal record. Jakarta, Indonesia.

Republik Indonesia. Mentri Keuangan. 1985. Nota keuangan dan rancangan anggaran pendapatan dan belanja negara tahun 1984/1985. Ministry of Finance, Jakarta, Indonesia.

Sawit, H.M. 1979. Kerajinan rakyat dan masa depannya: kasus DAS Cimanuk. Prisma (Jakarta). March 1979.

Siringoringo, S. 1985. Perkembangan export non-migas pada akhir pelita III. Laporan Mingguan No. 1269, Suara Karya (Jakarta). April 2.

Unit for Technical Services (UPT). 1985. Progress report. Tegalwangi, Cirebon, West Java, Indonesia.

Appendix 5.1 Expenses and Income from Wood Furniture

1. Seminar Desk
	- wages accrued to carpenter	: Rp 37,500
	- wage accrued to carver	: Rp 50,000
	- wage accrued to sander	: Rp 2,500
Total wages accrued to labour		: Rp 90,000 = 30%
	- expenses for logs (0.5 m3 a 160,000)	: Rp 80,000
Total expenses		: Rp 170,000
Sale price		: Rp 300,000
Finn owner profit		: Rp 130,000 = 43%
2. Two door cupboard
	- wage accrued to carpenter	: Rp 17,500
	- wage accrued to carver	: Rp 15,000
	- wages accrued to sander	: Rp 2,500
Total wages accrued to labours		: Rp 50,000 = 31%
	- expenses for logs (1/3 m3)	: Rp 54,000
Total expenses		: Rp 104,000
Sale price		: Rp 112,500
Firm owner profit		: Rp 23,500 = 21%
3. Three door cupboard
	- wage accrued to carpenter	: Rp 22,500
	- wage accrued to carver	: Rp 25,000
	- wage accrued to sander	: Rp 2,500
Total wages accrued to labours		: Rp 50,000 = 31%
	- expenses for logs (0.4 m3)	: Rp 64,000
Total expenses		: Rp l14,000
Sale price		: Rp 160,000
Firm owner profit		: Rp 46,000 = 29%
		2 cm thick	3 cm thick
4. Coffin
	- wage accrued to carpenter	5,500	19,250
	- wage accrued to carver	8,000	14,000
	- wage accrued to sander	2,250	2,250
Total wages accrued to labours		15,750 = 22.5%	35,500 = 12%
	- expenses for logs (0.22, 0.73)	44,500	145,440
Total expenses		60,250	180,940
Sale price		70,000	280,000
Finn owner profit		9,750 = 14%	99,060 = 35%
5. One piece of chair
	- wage accrued to carpenter	3,500
	- wage accrued to carver	4,000
	- wage accrued to sander	350
Total wages accrued to labours		7,850 = 46%
	- expenses for logs (0.05 m3)	8,000
Total expenses		15,850
Sale price		17,000
Firm owner profit		1,150 = 6.7%
6. One set of chairs
	- wage accrued to carpenter	50,000
	- wage accrued to carver	150,000
	- wage accrued to sander	2,000
Total wages accrued to labours		202,000 = 50.5%
	- expenses for logs (0.5 m3)	80,000
Total expenses		282,000
Sale price		400,000
Firm owner profit		118,000 = 29.5%
7. Divider
	- wage accrued to carpenter	7,500
	- wage accrued to carver	20,000
	- wage accrued to sander	2,000
Total wages accrued to labours		29,500 = 23,6%
	- expenses for logs (0.25 m3)	40,000
Total expenses		69,500
Sale price		125,000
Finn owner profit		55,500 = 44%
8. Bed
	- wage accrued to carpenter	12,000
	- wage accrued to carver	12,500
	- wage accrued to sander	2,000
Total wages accrued to labours		26,500 = 31%
	- expenses for logs (1/3 m3)	53,500
Total expenses		80,000
Sale price		85,000
Finn owner profit		5,000 = 6%
9. One piece of dining chair
	- wage accrued to carpenter	4,500
	- wage accrued to carver	7,000
	- wage accrued to sander	1,000
Total wages accrued to labours		12,500 = 42%
	- expenses for logs (0.075)	12,000
Total expenses		24,500
Sale price		30,000
Finn owner profit		5,500 = 18%
10. One set of tables and chairs for the living room
	- wage accrued to carpenter	20,000
	- wage accrued to carver	17,500
	- wage accrued to sander	2,500
Total wages accrued to labours		40,000 = 20%
	- expenses for logs (0.5 m3)	80,000
Total expenses		120,000
Sale price		200,000
Firm owner profit		80,000 = 40%
11. Make up drawer
	- wage accrued to carpenter	12,000
	- wage accrued to carver	12,500
	- wage accrued to sander	2,000
Total wages accrued to labours		26,500 = 31%
	- expenses for logs (0.33 m3)	53,500
Total expenses		80,000
Sale price		85,000
Firm owner profit		5,000 = 6%

Appendix 5.2 Expenses and Income from Rattan Furniture

1. One set of rattan table and dining chairs
- wage accrued to labour		: Rp 17,500 = 5%
- expenses for all kinds of rattan		: Rp 67,773 = 20%
- expenses for other materials		: Rp 18,975
Sale price		: Rp 337,500
Profit for the firm owner		: Rp 233,252 = 69%
2. One set of table and chairs for the living room
	- wage accrued to labour	: Rp 15,250 = 5%
	- expenses for all kinds of rattan	: Rp 67,590
	- expenses for other materials	: Rp 19,225
Total expenses		: Rp 102,025 = 34%
Sale price		: Rp 300,000
Profit for the firm owner		: Rp 197,975 = 66%
3. One set of table and chairs for the front veranda
	- wage accrued to labour	: Rp 7,500 = 14%
	- expenses for all kinds of rattan	: Rp 23,120
	- expenses for other materials	: Rp 2,475
Total expenses		: Rp 33,095 = 62%
Sale price		: Rp 53,000
Profit for the firm owner		: Rp 19,905 = 38%
4. One set of other type of table and chairs
	- wage accrued to labour	: Rp 10,000 = 17%
	- expenses for all kinds of rattan	: Rp 34,230
	- expenses for other materials	: Rp 3,000
Total expenses		: Rp 47,230 = 79%
Sale price		: Rp 60,000
Profit for the firm owner		: Rp 12,770 = 21%
5. One table and moveable chairs
	- wage accrued to labour	: Rp 7,500 = 15%
	- expenses for all kinds of rattan	: Rp 18,840
	- expenses for other materials	: Rp 10,500
Total expenses		: Rp 36,840 = 74%
Sale price		: Rp 50,000
Profit for the firm owner		: Rp 13,160
6. Bed
	- wage accrued to labour	: Rp 25,000 = 14%
	- expenses for all kinds of rattan	: Rp 65,350
	- expenses for other materials	: Rp 10,150
Total expenses		: Rp 100,500 = 56%
Sale price		: Rp 180,000
Profit for the firm owner		: Rp 79,500
7. One piece of chair for the veranda
	- wage accrued to labour	: Rp 3,000 = 15%
	- expenses for all kinds of rattan	: Rp 11,987
	- expenses for other materials	: Rp 1,875
Total expenses		: Rp 16,862 = 84%
Sale price		: Rp 20,000
Profit for the firm owner		: Rp 3,138 = 16%
8. One piece of book rack
	- wage accrued to labour	: Rp 3,000 = 14%
	- expenses for all kinds of rattan	: Rp 11,475
	- expenses for other materials	: Rp 3,100
Total expenses		: Rp 17,575 = 70%
Sale price		: Rp 22,500
Profit for the firm owner		: Rp 4,925 = 30%
9. One piece of armchair (Lazy chair)
	- wage accrued to labour	: Rp 3,500 = 15%
	- expenses for all kinds of rattan	: Rp 14,856
	- expenses for other materials	: Rp 350
Total expenses		: Rp 18,706 = 78%
Sale price		: Rp 24,000
Profit for the firm owner		: Rp 5,294 = 22%
10. One piece of divider
	- wage accrued to labour	: Rp 10.000 = 25%
	- expenses for all kinds of rattan	: Rp 9,462
	- expenses for other materials	: Rp 6,050
Total expenses		: Rp 25,512 = 64%
Sale price		: Rp 40,000
Profit for the firm owner		: Rp 14,488 = 36%
11. One rack
	- wage accrued to labour	: Rp 2,500 = 16%
	- expenses for all kinds of rattan	: Rp 10,703
	- expenses for other materials	: Rp 1,200
Total expenses		: Rp 14,403 = 90%
Sale price		: Rp 16,000
Profit for the firm owner		: Rp 1,597 = 10%
12. One piece of cupboard
	- wage accrued to labour	: Rp 7,500 = 17%
	- expenses for all kinds of rattan	: Rp 19,372
	- expenses for other materials	: Rp 5,000
Total expenses		: Rp 31,872 = 71%
Sale price		: Rp 45,000
Profit for the firm owner		: Rp 13,128 = 29%
13. Make-up drawer
	- wage accrued to labour	: Rp 5,000 = 17%
	- expenses for all kinds of rattan	: Rp 10,017
	- expenses for other materials	: Rp 5,450
Total expenses		: Rp 20,467 = 68%
Sale price		: Rp 30,000
Profit for the firm owner		: Rp 9,533 = 32%
14. One piece of lamp shade
	- wage accrued to labour	: Rp 700 = 20%
	- expenses for all kinds of rattan	: Rp 1,580
	- expenses for other materials	: Rp 450
Total expenses		: Rp 2,730 = 78%
Sale price		: Rp 3,500
Profit for the firm owner		: Rp 770 = 22%
15. Book rack
	- wage accrued to labour	: Rp 5,000 = 17%
	- expenses for all kinds of rattan	: Rp 18,511
	- expenses for other materials	: Rp 200
Total expenses		: Rp 23,711 79%
Sale price		: Rp 30,000
Profit for the firm owner		: Rp 6,289 = 21%
16. One piece magazine rack
	- wage accrued to labour	: Rp 1,500 = 30%
	- expenses for all kinds of rattan	: Rp 2,325
	- expenses for other materials	: Rp 100
Total expenses		: Rp 3,925 = 79%
Sale price		: Rp 5,000
Profit for the firm owner		: Rp 1,075 = 21%
17. One piece of dining chair
	- wage accrued to labour	: Rp 7,500 = 23%
	- expenses for all kinds of rattan	: Rp 17,200
	- expenses for other materials	: Rp 1,700
Total expenses		: Rp 26,400 = 81%
Sale price		: Rp 32,500
Profit for the firm owner		: Rp 6,100 = 19%
18. One writing table
	- wage accrued to labour	: Rp 10,000 = 40%
	- expenses for all kinds of rattan	: Rp 11,764
	- expenses for other materials	: Rp 200
Total expenses		: Rp 21,964 = 88%
Sale price		: Rp 25,000
Profit for the firm owner		: Rp 3,036 = 12%

Dining-room chair with caned splatt