China's Furniture Makers Effectively Coping with Rising Costs

Not only have manufacturers of all kinds in China had to cope with rising manufacturing cost due to rising global prices of raw materials as coal, oil, metal, plastics, wood, rattan etc., which is worsened by soaring wages without sparing furniture makers in China of such misfortune, with the odds stacked even higher against those who rely on the United States as major export outlet, who are now required to comply with the stricter U.S. Formaldehyde Standards for Composite Wood Products Act, effective July 1, 2011.

The Act regulates the emissions output of formaldehyde in the making, supply and sale of hardwood, plywood, medium-density fiberboard, and particle board in the U.S., as well as finished goods of such composite woods.

Hou Kepeng, secretary general of the Shenzhen Furniture Industry Association, says that the preservative, also a VOC, is hazardous, whose controlled emission standards in the new Act set by the U.S. far exceed those set by China, so he believes the tougher standards will weed out wood furniture makers who cannot play by such rules. Hou's belief is likely based on the fact that lower-end makers in China lack adequate know-how and capital to upgrade facilities to meet the new emissions standard.

Furniture manufacturers in China can no longer compete by producing low-end products only due to higher manufacturing cost, so must go upmarket by developing products with higher added-value, innovation to build global advantage, Hou notes.

Headway is being made as China's furniture makers have exceeded Italian counterparts as the biggest suppliers globally to command an increasingly important role, which however is still offset by China's major position in mostly mid- and low-end segments.

The majority of China-made furniture are dining room sets, particularly those of solid wood and metal being export staples, followed by those of rattan, bamboo and plastics. Some 47.65% of furniture exports were made up of wooden dining room sets, but rising manufacturing cost has reduced the percentage.

Dongguan Zhenpin Furniture

Located in Dongguan, Guangdong Province, Dongguan Zhenpin Furniture Co., Ltd. specializes in wood and rattan furnishings for bed rooms, living rooms, dining rooms, and studies, most of which are marketed under its own brands—“Vine House” and “Golf”.

Dongguan Zhenpin imports rattan from Indonesia and lumber from Myanmar to craft furniture in classical European styles. “We specialize in made-to-order furnishings in rattan and wood and have built a reputation for deft craftsmanship,” says Dong Shupeng, marketing manager.

Offering a glimpse into the history of furniture making, Dong says rattan is a typical furniture making material that was imported into Asia from Europe as early as the seventeenth century, evidence of which lies in frescoes of Roman officials in wicker chairs or the earliest baskets made of rush or wicker by ancient Egyptians that may date to 2000 B.C., not to mention that many furnishings of rattan and wicker were found in India and the Philippines long ago.

“While rattan and wood have long been in ample, easily harvested supply, rising eco-sensitivity is working against furniture makers as cutting rattan and certain rarer woods are regulated, which is driving up prices that we try to offset by enhancing operating efficiency,” says Dong.

In recent years Dongguan Zhenpin has built a line of European dining room sets, including the Beethoven series, Louis XIII series, Caesar series, and Athens series with different features.

The Beethoven series combines wicker, leather and solid wood to create an unique mood of fashion and romance. The Louis XIII series consist of mostly rattan and solid wood that are carved into different patterns, figures to evoke nobility and luxury. The Caesar series is mainly made of solid wood featuring classical European grandeur and stateliness. The Athens series is made of elm imported from Russia that shows rare but sought-after grain, with the extra-hardness enhancing practicality without compromising its modern design.

The company has set up a chain of “Vine House” outlets in many cities in China while focusing overseas on the Middle East, the United States, Europe and Russia, with the “Thumb” brand recently set up as a line of white-color, contemporary wooden furniture to satisfy preferences of younger consumers for individuality and practicality.

Clearly a conscientious maker despite formal furniture making standards being absent in China, Dong says the firm uses mostly only Southeast Asian rattan and solid woods, which are kiln dried, treated to resist insect and rot etc., and only eco-friendly, non-toxic lacquer that can endure temperature as high as of 1,500 Centigrade are used.

“To battle increasing global competition and rising manufacturing cost due to higher wages and land prices, we have to work harder to enhance operating efficiency and expand marketing channels,” says Dong.

Honly Furniture

Also in Guangdong Province, Honly Furniture Co., Ltd. turns out mainly bar tables and stools as well as outdoor dining sets, being known for paying close attention to every step of order filling, from design, quality control to packaging.

Its strong R&D team enables rolling out of innovative, high-end products that help uphold global competitiveness, with its line mainly consisting of PE rattan, teak and specially-processed upholstery that are stylistically matched to accentuate particular product designs.

“We make mostly outdoor dining tables and chairs and emphasize minimal interruption to the ambiance, which calls for us to be very careful in choosing materials and product design,” says Li Wenjun, marketing manager.

Without explicitly stating the superiority of composite rattan over the natural variety, Li says SGS-approved PE rattan imported from advanced nations is used, which is extremely resistant to high temperature, heavy rain, snow, corrosion, insects, rot and UV, with per-strand pulling strength of about 10 kilograms.

Further confirming the advantages of PE rattan, Li says, besides designing furniture to be ergonomic and user-friendly, the plastic rattan is more flexible, glossier and easier to clean, with aluminum used as frame and specially-processed, waterproof, UV-resistant seat upholstery as seat cushions to cut cost.

Honly also imports Southeast Asian teak in manufacturing to tap the taken-for-granted merits of the naturally-oily hardwood. “Compared to other woods, teak is more weather-resistant and hence better suited for outdoors, and we reinforce safety by using tempered glass as tops,” Lin adds.

The company has built considerable success for supplying quality products that suit all kinds of extreme climates. “We do our best to meet global eco-protection trends to use renewable and/or recyclable materials, as well as keep improving manufacturing technologies, design capability to roll out more user-oriented, innovative furniture,” Lin notes.

Woodworth Wooden Industries
Established in 1970 in Taiwan but having moved production lines to China in 1997, Woodworth Wooden Industries (Dongguan) Co., Ltd. is now a leading furniture maker in Guangdong, and has since 2004 expanded into Vietnam to be a top-three maker there.

Operating mainly in China and Vietnam and exporting mostly to the United States, Europe and Asia, Woodworth is known to specialize in wooden furniture for dining rooms, living rooms, bedrooms and studies.

To tap the American market, Woodworth has established the “D'oro” (Spanish for of gold) brand for marketing in North America and so far has built a sound image there.

Like many manufacturers vying for a slice of the rapidly growing China market, the company last year set up two market-specific brands—“Funips” and “Fullwill,” with the former focusing on classical style and the latter with simpler designs.

To meet growing demand, Woodworth also expanded into Indonesia to inaugurate a branch there this summer, with its operations in Vietnam and Indonesia offering the added advantage of easier access to ample supply of local woods, as well as reinforcing manufacturing strength.

“To enhance value in products, we emphasize not only quality control but also hand craftsmanship; in fact after years of effort we have cultivated several craftsmen and skilled artisans who are the backbone of our products, plus we have own laboratory and advanced testing equipment to screen out imperfections,” says Yan Mingde, general manager.

Woodworth applies ample laminated wood boards in manufacturing and uses German-imported glue, whose quality influences the quality of laminated boards. “We use a special glue mixer to prepare glues needed for different kinds of laminated panels,” Yan says.

“We coat furniture with AKZO paint imported from the U.S. which helps to create a faux-antique appearance that is often popular, while we need many artisans capable of handcraftsmanship to turn out the kind of product we wish to be known for,” says Yan.

Crafting exquisite products with innovative design, Woodworth has built a reputation for easy-going elegance, trendy yet classical style that is increasingly popular among customers in China and overseas.