Building New Markets With New Materials and Designs

With over three decades of development, Taiwan's outdoor-furniture industry has gained much experience in designing unique products. Innovation in the industry, particularly in the choice of materials, has accelerated as manufacturers attempt to outflank low-cost newcomers with a steady stream of new high-end offerings.

In fact, the transformation of the local industry represents a "survival of the fittest" strategy. All-metal furniture, once a Taiwan specialty, is now largely made in areas enjoying lower-cost labor, primarily mainland China but with Vietnam enjoying solid growth of late because of labor and shipping costs even lower than the mainland.

As lower-end manufacturers relocate abroad, the remaining diehards are discovering that they can carve out niches in the high-end market thanks to the strong backing of a well-developed peripheral-supply network on the island.



One-Stop Shopping



Still, the mainland transplants are rapidly catching up. Point Max Furniture + Foundry Industrial Ltd., established in 1992 in Guangdong Province, mainland China, offers a full range of indoor and outdoor furniture made of wood and cast iron. The company can also source furniture from both sides of the Taiwan Strait.

The company is a specialist manufacturer and exporter of Western-style faux-antique furniture, K/D (knock-down) furniture, cast-iron handicrafts, and patio furniture. The company uses wood materials and logs, mainly produced in the mainland.

In addition to its diverse product range, the company can easily adapt its lines to turn out custom items designed by buyers. The company's R&D team can also quickly design products based on customer needs.

Point Max president Hsu Yi-sheng says that between in-house production and products sourced across the Taiwan Strait, his company offers one-stop shopping for medium and small furniture items.

Point Max operates two plants with a total floor space of 252,000 square feet. Currently, the company's output is evenly divided between ODM (original design manufacturer) and OEM (original equipment manufacturer) production. The company says it can design 20 to 30 new furniture items per month.

"Most of our customers have done business with us for over a decade," says Hsu. "These long-term relationships have helped us grow in the past several years. They also underscore the reliable quality of our products."

At present, Point Max is eying new markets in Eastern Europe, South Africa, and the Middle East. The company now exports 80% of its output to the U.S., with Japan and South Korea absorbing much of the remainder.

The company anticipates its sales will grow by 15% to 20% next year.



Leading the Blinds



Lee Ah Sheng Enterprise Co., Ltd. Has manufactured deluxe wood, aluminum, and polyvinyl chloride (PVC) blinds and poles for outdoor use for more than 25 years. Over the past several years, the company has diversified into several other product lines, including wood Venetian blinds, slats, and related components; wood curtain poles; PVC and aluminum mini blinds; wood folding screens; PVC trellises; and wood shutters.

The company moved production to Guangdong in 1993, shuttering its plant in Taiwan the same year.

Since its relocation to the mainland, Lee Ah Sheng has been developing new items and expanding production capacity. About two years ago, the company began producing woven wood blinds, which have sold well in Europe.

The company is considering expanding its mainland facility, which currently measures 1.6 million square feet. The company boasts it is already one of the world's largest manufacturers of wood blinds and poles. This huge production scale has helped the company negotiate lower prices on raw materials and thus enhance its global competitiveness.

With a work force of 1,800, Lee Ah Sheng's annual revenue averages US$35 million. The company can produce 200,000 to 300,000 wood blinds and 100,000 to 200,000 PVC blinds monthly. Europe is the company's largest export outlet, absorbing 60% of its total output, followed by the U.S. with 30%.



Cost Benefits of Vietnam



Another export-oriented manufacturer of outdoor furniture is Komex Co., Ltd., headquartered in Shenkeng, northern Taiwan. The company makes outdoor wicker-like furniture from plastic materials.

Komex first set up a plant in mainland China some seven years ago. To keep costs down and expand its product line, the company recently moved to the Chanpeng Industrial Area in Vietnam. The new plant makes large furniture items, especially outdoor items.

The move to Vietnam has helped Komex cut shipping costs, says Danny Huang, the company's export manager. Vietnamese workers are also more industrious than mainland and domestic ones, he says.

Currently the company imports plastic materials from Taiwan and mainland to make its wicker-like furniture in Vietnam. "There are many well-established firms specializing in the production of plastic materials to meet our production in Vietnam," says Huang.

About two years ago when Komex still had a plant in the mainland, it produced not only large-sized wicker furniture but also some small-sized items. After moving to Vietnam, the company has been concentrating on large-sized outdoor wicker furniture aimed at the European market.

Currently the company exports 90% of its output to Europe and the remainder to the U.S. and other markets, Huang says.

Since moving to Vietnam, Komex has begun using mainly aluminum alloy in place of iron piping in its furniture items. Other materials can be substituted to meet customer requests. "Compared with iron piping, aluminum alloy is lighter and easier to mold," explains Huang. "We can offer aluminum-alloy outdoor furniture in original color or enameled in other colors."

Komex can design outdoor furniture in many unique styles. It also welcomes OEM and ODM orders.