Interview with the Valencia International Furniture
Trade Fair, President, Joaquín Giner

The 1996 FIM won’t be disappointing

Joaquín Giner, chairman of the Valencia International Furniture Trade Fair, is a pleasant simple man, and an expert in the sector. The president of the most eagerly awaited celebration of the year, surprised us with an interview which reflected a great capacity of reasoning. The result turned out to be a completed outline of the furniture world: international trade fairs, international commerce, the sector’s needs and objectives for the future.

- The Valencia Furniture Trade Fair has been steadily growing and has finally become a representative of the sector at international level. From your experience as president, in which ways has the exhibition developed and what status does it have at present?

- There is a certain parallelism between the situation the sector is at and the status of the trade fair. There are three different types of situation: firstly when the trade fair obtains a mark of 10 in attendance but the market is in crisis and has a mark of -10. People attend the exhibition to escape the crisis. This situation occurred during the years 1993, ‘94 and ‘95.
The second situation is when the trade fair has a mark of -5 and there is an initial crisis of -3. We experienced this situation in 1990, 1991 and 1992. We went through a tremendous downfall. The surface space used up was reduced from 80,000 square metres to 60,000. The peseta was strong and, practically, we just couldn’t export.
Lastly, the best situation is the following: the market is at 10 and the trade fair is at 10 too. At the moment we are in the process of reaching this level, but we haven’t achieved it yet. Once again we are at 80,000 square metres of surface space and the market is emerging from the crisis. The present situation is based on a weak peseta and an increase in exportation.

- What are your plans for the ’96 FIM (International Furniture Trade Fair) and what are your expectations?

- Since 1994 the trade fair has experienced an extraordinary recovery. It went through a crisis in the years 1991, 1992 and 1993 which extended to Cologne, Milan and Valencia.
The Germans supported the crisis reducing the trade exhibition exclusively to furniture. Italy combined furniture with lighting and somehow matched up to the occasion. Valencia followed Milan’s steps and merged the FIM, FIAM and CEVIDER offering a complete range of decoration. This was the brilliant idea which saved the exhibition from the crisis of 1991, ’92 and ’93.
The joining up of the show-rooms took place in 1994. That same year I was named president and had the enormous luck that the furniture exhibition crisis was disappearing and there was a considerable and growing improvement. Every year is an improvement on the previous one and expectations for 1996 are very high, we only have to look at the figures: 85,000 square metres and more than 1,000 exhibitors.

- If the trade fair continues expanding in this way, the problem will turn out to be the lack of space.

- Yes, that’s true. The lack of space will be an emerging problem in the near future, and the trade fair also needs some modifications. At the moment there are the North, South, East and West wings. The North and East wings are in good conditions, and so is the West wing, but the South wing needs improving and we need to have the capacity of doing this efficiently. In all the time I have been President I have insisted on dignifying the trade fair so that exhibitors do not have preferent areas to display their products. In order to carry out these works we need to make an investment of 1,000- 1,500 million pesetas. The communication between the South and the centre point has to improve, the attics have to go, the trade fair has to provide comfort. The idea is focussed on Cologne rather than Milan because Valencia’s infrastructure is a lot better than Milan’s.

- Don’t you think that Valencia also needs to improve the signs so that visitors do not feel lost?

- Yes. We have to avoid any annoying features of the trade fair. It is necessary to introduce a new guide system by colours, for example, so that visitors do not have to be continuously looking at the maps.
We need to establish rest areas because a buyer needs to relax from time to time or study his/her buying plans or closed operations. We also need to build restaurant areas which are not too expensive but where visitors can have something to eat in comfort and peace.
As well as all this, communications also have to be improved: the tube would have to reach the exhibition site itself, and a car park would have to be built. Cars (many of which are very expansive) cannot just be abandoned in the middle of the road. The correct thing would be to have a minimum charge fenced car park with a watch tower, available to all.

- Do you mean that there are going to be large scale works? When will it all be finished by?

- Well, I’m talking about an enourmous investment I mentioned before, the 1,500 million pesetas. My aim is for the trade fair to be in conditions by the year 2000. For the moment, it is only a project, a range of proposals on which no decisions can be taken before the exhibition elections.

- At what level is the Valencia Trade Fair with regard to other international exhibitions like those of Cologne or Milan?

- In my opinion, the trade fair has a mark of 10 in infrastructure and a 10 in display quality. Cologne is the leader in international trade fairs. In Germany there is a fantastic exhibition institution and great response from exhibitors.
Milan, on the other hand, has a 5 in organization but the exhibitors have a 10. The Valencia trade fair venue is better than Milan’s, I would give it a 7, but my punctuation for the exhibitors is a 5.
In general terms, the level of Italian exhibitors is above the Spanish, and in Italy some important manufacturers are capable of making 10,000 to 15,000 million pesetas. Even some upholstery companies make up to 70,000 million pesetas.

- The Italians seem to be Spanish manufacturers’ nightmare. They are above us in all markets and are our direct competence in most of them. What is Italy’s secret?

- No doubt the auxilliary industry. Italy has a totally descentralized production. A large Italian company consists of a factory made up of 40 to 50 workers.
Subcontracting is the base of production. An Italian factory grows rapidly because of the enormous quantity of auxilliary industry. On the one hand there is one group which designs the pieces, these are manufactured by another company; the iron structures by a different one; the uphostery by another factory; so that the initial company is only specialized in design and assemblage. The final result is that of a large industry of 300 employees when really there are only 20 or so in each individual factory.
On the other hand, Italian industry has traditionally always exported. The Italian furniture sector has an anual production of 2 billion pesetas and exports 1.5 billion. With regards to us, we have a production capacity of more than 1 billion of which we keep 800,000 million and export 200,000.
The Italians have a very agressive exporting policy. Ten years ago you went to Riad and practically all sellers were Italian. At present you go to India and you see them there too, and you go to the remotest corner of the globe and you will find an Italian catalogue.
This characteristic aggressiveness han been equally reflected in the Milan exhibition which was full of foreign buyers. This is one of the advantages Milan has on Valencia: the number of foreign buyers who attend the exhibition. In this sense Milan is ahead of Cologne.

- With regard to Spanish manufacturers, are they conscious of the need to export?

- Spanish manufacturers are not really exporters. There are some exceptions, but due to the lack of support from the government, we are years behind.
Due tot the crisis we have suffered, the government is fomenting exportaion, manufacturers have become conscious of the need to export and so we are rapidly catching up. At the moment you can find a Spanish manufacturer in Seoul, Moscow, Indonesia, Malasia and even South Africa. At present, the manufacturer himself carries out direct operations and inste ad of travelling in order to sell, or customers coming to buy, consortiums have been created and exportaion is in the minds of most manufacturers.

- Has the European Union, and opening-up of commercial borders benefited our exportation?

- In my opinion, the devaluation of the peseta has been the most benefitial thing for us. We could only do one thing: export. Our home market was in crisis and the most effective solution for the sector was to export. Spanish manufacturers have been original and imaginative and have adapted to tastes and needs of each market. At the moment we have a good market in France and Germany, Russia, although it has its difficulties, is tremendously original and holds good opportunities to buy there, there are good markets too in Indonesia, Malasia, Hong Kong, Singapore, Taiwan, Korea, Arab countries step by step we are establishing new markets and consolidating those we already have.
In spite of this, we still have a long way to go. At the moment we are exporting 200,000 million pesetas, and considering the productivity of the furniture industry, we will export around 600,000 million.

- Spanish manufacturers have decided then to export. Isn’t there a danger of leaving aside the home market?

- The important thing is to export. I don’t think importing furniture from abroad will be a great risk for us. Exporting is much more productive and shops would have a wide range of products. In any case, we don’t forget the home market because it is the most comfortable we have. What can happen is that traders will reorganize their custormers, making a selection of them, a fact which will help the shops because we won’t see the same furniture everywhere. Instead there will be a selection in determined shops which are more adequate for a particular syle of furniture and which the managers consider most convenient.

- What changes are necessary in the furniture industry in order to reach the 600,000 million pesetas in export that you mentioned before?

- In order to reach this figure in exports we will have to be very competitive. We need the consortiums and the auxilliary industry to work, that is, we have to plan a reorganisation of marketing strategies and an increase in production. These are the two main elements which will be necessary to achieve this aim.

- Not long ago there was a boom in creating export consortiums, but now this process is paralized. Why aren’t consortiums working as they should?

- We need to have a consortium mentality. The figure of the manager is very important and we still don’t fully realize this. The manager must be a man with experience, very familiar with international trade, although not necessarily to do with furniture. He must have capacity and competence, whatever salary he demands. On occasions there is a tendency to employ an acquaintance or relative, but this usually turns out to be a mistake.
On the other hand, when there is a imposition of law and order, one has to obey. When members of a consortium do not agree on something, the manager is the expert and his opinion in some subjects is extremely important: the assembling of a catalogue, the adaptation of a product to certain makets, for example. As I said before, the manager is fundamental.

- In a sector where exporting is a basic element, it is essential to discuss the treaty of Maastricht. In which ways do you think Maastricht will affect the Spanish industry and specifically, the furniture sector?

- Maastricht is still a big question mark to traders. Personally I have a clear idea: I don’t want to reach the European Union dead.
I can understand that Maastricht is convenient for the government. The government says: if we reach Maastricth, there won’t be any inflation; if there is no inflation, there will be employment. This is only a theory which may be doesn’t coincide with the idea traders have.
The German institutes themselves have advised Kohl to delay the Economic and Monetary Union. Is there a nation which has all the requirements? Well, there is Norway, but Norway doesn’t care at all for Maastricht.
From my point of view, if the government makes sure that the peseta has the real value it should have, or even less than the real value, and we are able to not generate inflation, then I will think like the Norwegians: What do I care about Maastricht? But, if in order to reach the Economic and Monetary Union, we have to sacrifice ourselves, pay high interests, eliminate inflation in so little time etc, we end up suffocated or dead, I prefer not to reach it.
In my opinion, Maastricht is a German invention. I envy Germany but I can’t play the same game as them. From the beginning of this century Germans have been educated to be law abiding, but we are different. We are being obligated to go at the same rhythm. While they are going at a pace of 5km per hour (they start with advantage), we are forced to go at 180 km p/hour, and that is very dangerous.
On the other hand, Maastricht can be harmful to us because such enormous budget cuts can suppose a decrease in public investment and this would be detrimental to large industries. In order to reach Maastricht, many of these companies would have to go. To reach the Union with budget cuts, with the required rate of inflation, with the established economic growth. With all the conditions demanded, represents an enormous effort for a country like Spain. Which countries can reach these conditions? Those prepared for it are those from the North fof Europe. A two-levelled Europe is not interesting for us either.

- Returning to the initial subject of the interview, what do you have to say to the exhibitors who are planning on coming to the International Furniture Trade Fair this year?

- I would say that the’96 FIM won’t disppoint them at all. We are expecting around 50.000 home buyers and 15 to 20,000 foreign buyers.
When someone sets up a stand in the exhibition, he must keep in mind that his display responds to three functions: in first place, he displays his furniture and at the same time has the opportunity of observing his competence and compare other manufacturers characteristics with his own.
Secondly, he receives his customers. He has the opportunity of receiving the best customers and those he has never sold to before.
Thirdly, he can check if his sales strategy is adequate. Some operate with travellers, others with exclusives, or with representatives.
The exhibitor has the opportunity of assimilating the best quality of his sector, as well as attending conferences where management methods are explained.

- But many manufacturers go the trade fair as if the were using up their last chance and as it very near.

- But the aim should be the three factors I explained before and the selling should be left to specific people in charge of that, on the stand.
The trade man who goes to the exhibition should be receptive and not forget the opportunity offered to him. He should exchange ideas with other manufacturers and search for common aims: the creation of a consortium, information about the market.
That it is very imporant to get together and follow the three main aims I was talking about previously.
Only a celebration such as the Valencia International Furniture Trade Fair is capable of offering so many adavantages in Spain, for exhibitors and buyers. To waste them is absurd.