Brazil poised to impact U.S.
By Tom Edmonds -- Furniture Today, September 23, 2001
SAO PAOLO, Brazil — A long-time factory executive and now an import consultant, Jeff Holmes believes the Brazilian industry could be ready to make a powerful impact as a supplier to retailers, distributors and factory brands in the United States.
A consultant to the Promovel export initiative in Brazil, Holmes adds that he's felt that way for many years, but it remains to be seen whether it's actually going to happen.
"Brazil has some significant opportunities, but they've had these opportunities for 20, 25 years," he said, listing low-cost labor and a ready supply of lumber as the leading Brazilian advantages. "They've never been able to take the pain out of doing business with an overseas entity, but the Chinese have done that."
Since 1990, China has catapulted to the top of the list among importers supplying the United States with furniture. Brazilian furniture manufacturers are not as commodity oriented as the Chinese, but they do have some advantages, said Holmes, who has studied both markets.
"The labor in China is arguably cheaper, although the Chinese have to provide more benefits other than salary, but aside from that, there are certainly more trees in Brazil than China," he said. "With material content representing from 37% to 50% of wholesale cost, if you look at it that way, Brazil's got them beat, and they're two weeks shorter on delivery."
At the same time, he added, Brazilian factories are not equipped to conquer a large portion of the U.S. case goods business, as the Asian factories have over the past seven or eight years. "They're certainly focusing on this market, and they do seem to be picking their niches because they don't want to take China on head-on," Holmes said.
With all the recent investment in furniture manufacturing here, including finishing support from AKZO and Valspar, combined with the simultaneous collapse of U.S. furniture production, Holmes said, the opportunity for Brazil is now: "It's past time for Brazil to realize it's potential. It's time for Brazil to deliver the goods."
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