Trade zone helps factories
By Larry Thomas -- Furniture Today, January 4, 2009
TUPELO, Miss. — Three northern Mississippi upholstery factories have been approved as foreign trade zone manufacturers by the U.S. Commerce Department, a designation that will allow them to buy duty-free imports of rolled microdenier fabric.
Officials say the absence of duties will save Lane, H.M. Richards and Bauhaus USA more than $1 million each in annual raw materials costs. That will allow the three to keep their cut-and-sew operations in Mississippi and save about 950 jobs, they said.
“It allows Lane, H.M. Richards and Bauhaus USA to remain competitive without outsourcing their upholstery operations overseas,” said Mississippi Gov. Haley Barbour, whose office worked with the state's congressional delegation to secure the designation.
Officials said cut-and-sew kits can be imported duty-free, but the rolled fabric used by the three companies had been subject to import duties of 7.2% to 17.2%.
“The savings that we will realize on the purchase of very popular selling microdenier suede fabrics will improve our competitive position and our ability to maintain and create furniture manufacturing jobs here in North Mississippi,” said Lane President Skipper Holliman.
Added Joy Tarrant, vice president of operations at H.M. Richards, “Being able to import microsuede fabric rolls duty-free levels the playing field with our competitors who decided to reduce their local cut-and-sew operations.”
Al Wiygul, president of Bauhaus USA, said the move gives his company a chance to show it can successfully compete with imports.
“I see us adding cut-and-sew jobs back to our workforce in the near future,” he said.
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