Taiwanese furniture makers in Dongguan moving production facilities to Vietnam

Taipei, June 29, 2004 (CENS)--To mitigate the impact of heavy customs tariffs imposed by the U.S. government, more than 200 Taiwanese-invested furniture manufacturers in Dalingshan, Dongguan Province of mainland China are moving their production facilities to Vietnam.

Dalingshan is the production center of Taiwanese-invested furniture manufacturers.

Recently, the U.S. Department of Commerce (DOC) issued a preliminary ruling to slap anti-dumping tariffs of up to 198% on the wooden furniture imported from mainland China. The anti-dumping tariff will deal a heavy blow to the mainland manufacturers because their products currently account for 80%-90% of the U.S. market.

The U.S. DOC imposed anti-dumping tariffs of 4.9% to 24% on seven firms that are under mandatory investigation. Another 100-strong firms are subject to 10% anti-dumping tariff. Those which didn't respond to DOC's questionnaires are subject to an anti-dumping tariff of up to 198%.

A Taiwanese-invested furniture manufacturer said some counterparts have procured land lots in Vietnam in preparation for establishing plants there since a half year ago, when they were informed that the U.S. was investigating the dumping behavior of mainland wooden furniture manufacturers. Some of them are reported to begin installing production equipment at their new plants in Vietnam.

The relocation of the Taiwanese-invested furniture manufacturers is impacting the supply chain of the Dalingshan furniture sector. For instance, AKZO of the Netherlands, one of the world's top manufacturers of coating materials, is preparing to set up a plant in Vietnam following the relocation of the downstream furniture manufacturers.

Taiwanese-invested furniture manufacturers currently account for 30% of mainland China's overall furniture output. They converge in Dongguan and Shenzhen, Guangdong Province while mainlander-invested furniture manufacturers are mostly operating in central and northern China.

The DOC's anti-dumping investigations are focused on such items as wooden bed, dressing table, bed cabinet, and clothes cabinet. Some manufacturers are concerned that the U.S. DOC might launch another round of anti-dumping investigations on mainland-made living-room and dining-room furniture sets.

A Taiwanese-invested furniture manufacturer in the mainland said the firms that are relocating production facilities to Vietnam are those featuring small paid-in capital, high local content rate, and production of low-priced items. With little reliance on the backup of supporting firms of parts and components, the small-cap firms are said to pay less than large-sized ones in relocating production facilities to Vietnam.

Lacquer Craft Mfg. Co., Ltd., the largest Taiwanese-invested furniture manufacturer in Dalingshan, said it has yet to consider production relocation because it still needs strong support of peripheral industries to sustain its large-scale production.