Most of Taiwan's outdoor-furniture makers reported weaker sales in the first four months of this year compared with the same period in 2002, but they remain optimistic of a second- half recovery, expecting long-term relationships with key overseas buyers to bring some stability.

Outdoor-furniture makers in Taiwan have been strengthening ties with overseas buyers over the last several years. Many of these tie-ups involve long-term technology/production- sharing agreements that promise to lead to steadier growth in the future.

As with the IT sector, Taiwan's outdoor- furniture makers have been able to forge strategic alliances with buyers on the basis of their ability to turn out products at consistently high quality levels and at competitive prices--a trend that foretells the industry's future. Teaming Up With Major Retailers

Mibelan Industrial Co., Ltd., one of Taiwan's largest makers of outdoor furniture, says that export orders received so far are running only slightly higher than the same period in 2002.

"Our sales of outdoor furniture are growing steadily year by year, as we have established strategic-alliance agreements with our major customers," says a company spokesperson.

The company's major partners include Costco, Wal-Mart, and Kmart of the United States as well as leading importers in Canada and Europe. "Nearly all globally renowned furniture importers and distributors buy furniture from us," she says. "Cooperation with those brand- name suppliers has helped us to compete effectively at the upper end of the market."

Mibelan, which moved most of its production to mainland China several years ago, sells parasols, ready-to-assemble pavilions, and garden/conservatory furniture, as well as outdoor-use tables and chairs made of stainless steel and aluminum.

Customer Oriented

Another leading outdoor-furniture maker that has established alliance agreements with foreign buyers is Jong Lung Lounge Chair Industrial Co., Ltd. Ariel Huang, the manager, says that her company sells metal-piping furniture, including lounge chairs, bunk beds, and sofa sets, to such major retailers as IKEA, Coaster and Wal-Mart.

"We are a customer-oriented manufacturer," Huang says, "which means that we have to supply our clients with top-notch products at competitive prices."

Like Mibelan, Jong Lung manufactures its furniture in mainland China. Each of the company's three plants there is equipped with automatic and semi-automatic machines, including iron-tubular extrusion, horning, stamping and welding machines.

Jong Lung self-produces over 95% of the parts and components used in its products, which Huang says gives the firm better control over production costs and quality. "You have to watch your production costs--even in the mainland," she states.

With a workforce of over 2,000 people in the mainland, Huang says that her company doesn't see any need to further boost its current production capacity. "We still have enough space to handle incoming orders," she adds.

It is expected that Jong Lung's total turnover in 2003 will be on par with last year's level, but Huang declines to reveal an exact figure.

Made for the Shade

Sow Shin Aluminum Co., Ltd., a medium-sized outdoor-furniture maker, says that it hopes to copy the same development model so successfully applied by Mibelan and Jong Lung--establishing long-term production partnerships with major foreign customers.

"Establishing strategic alliances with key buyers and making products in low-cost production bases like China are the two key factors that underline the future development of Taiwan's outdoor-furniture industry," says a top Sow Shin executive.

Following this strategy, Sow Shin plans to set up its first plant in the mainland within the next few months, adding that the plant will have 70-80 workers in the initial stage.

Sow Shin, an ISO9001- and 9002-certified furniture maker, sells shade umbrellas and aluminum casual furniture for commercial use, including outdoor-use leisure sets and café sets.

The company's shade umbrellas are made of anodized aluminum tubes and can be adjusted from 1.5 meters to 2.7 meters in height. The polyester, waterproof canopies are available in a round version at diameters of 2.5 meters-3.7 meters, or in a square version two meters square.

The high-back and low-back reclining chairs in the firm's Elite Leisure sets come with powder-coated aluminum frames and anodized aluminum seats and back slats. Tables in the sets are available in rectangular or square versions. The sets are available in three colors: navy blue, alpine green and charcoal gray.

The firm's Angela Café sets--among its best- selling--feature a square tabletop of tempered glass or round top of powder-coated aluminum.

Adding Value

Kyvas International Co., Ltd., a leading exporter of furniture, sports gear, exercise equipment, hardware items and household products, has built its success on a well- established global division-of-labor network.

"As an exporter we don't initiate the furniture- design process. Instead, we usually receive original designs and orders from our overseas clients and then we add value to the products by offering packaging designs and point of-sale marketing props such as display racks and posters, while subcontracting the production to specialized makers," says Karen Hsu, a Kyvas manager.

The firm also offers global-logistics services to large-volume buyers to help them control shipping costs and maintain efficiency, Hsu says. Kyvas has established close ties with a number of furniture makers in Taiwan, mainland China and Vietnam, with the majority of the company's furniture shipments made from the latter two locations.

The firm deals in a wide range of outdoor furniture made of natural and artificial wicker and rattan, as well as of aluminum and other metals, available at a variety of price levels. One of its most recent offerings is a series of chairs with artificial wicker seats and anodized, painted aluminum frames. "The stylish light- brown artificial wicker helps soften the hard look of the aluminum frames," Hsu says.

Hsu admits, however, that Kyvas's furniture business has slowed over the past year even though the company has expanded the number of its product lines.

Parasols to Pavilions

Guang Jia Wood Co., a leading maker of parasols, ready-to-assemble wooden pavilions, pagoda-style outdoor wooden-furniture sets, has also faced tough times recently. The company says its sales were lackluster in the first four months of this year, albeit compared to an unusually strong comparison period a year before.

"We were fortunate to receive a big-ticket order for our wooden pavilions during the same period last year, totaling 100 20-foot containers, but overall order volume has not kept pace so far this year," says a Guang Jia official.

The company expects its business to pick up momentum in the second half, which is traditionally a peak season for the furniture industry, the official says.

Shade umbrellas currently constitute the bulk of Guang Jia's production, with output running at 10,000 units per month at its plant in mainland China. The umbrella frames are made of solid wood and topped with high-density canvas or polyester woven fabric in diameters of 1.8 meters to 3.6 meters.

Guang Jia employs around 80 people at its mainland plant.

High-End Focus

One small-sized furniture company that has refused the lure of cheaper labor costs in the mainland to focus instead on high-end products in Taiwan is Ten Well Metal Furniture Co., Ltd., a specialized maker of stainless-steel tubular and outdoor furniture.

"While others have moved their factories to low-cost overseas sites, we have continued to base our production in Taiwan because we believe that we can continue to secure long- term orders with innovative, better-quality products," says Chang Pao-han, president of Ten Well.

In fact, Chang says, export orders received by his company in the first four months of this year were appreciably higher than in the same time- frame last year, thanks to a surge of new orders from Japan.

"Over the past year, Japanese buyers have been shifting orders back to Taiwan after purchasing furniture products from China for several years," Chang says.

Ten Well's best-selling outdoor furniture sets are the D-3302 and D-3303 metal tube and wooden slat outdoor umbrella furniture sets. The D-3302 model has one shade umbrella attached with a powder-coated aluminum tabletop and comes with two or three leisure chairs as well as one two-seated rest chair. The D-3303 model has the same specifications as the D-3302, but comes with a wooden slat tabletop.