Growth sparks Martin to open Mexican factory
By Tom Edmonds -- Furniture Today, June 28, 2004
Otay Mesa, Mexico — Kathy Ireland Home by Martin Furniture, which operates a still-new factory just a few miles across the border in Otay Mesa, Calif., has opened a plant here to cut costs and increase capacity.
The new 100,000-square-foot facility will become the primary site for Martin's North American production of home office and entertainment furniture. The five-year-old building on the U.S. side, which will still handle some production, will serve as the company's distribution center for domestic merchandise and a growing import program.
"Eventually, we expect to transition all our production down there, but right now we're just looking to expand our production," said Duane Utt, vice president for sales and marketing.
He said Martin needed more space because of recent growth, and at the same time, the company wanted to escape the high costs of running a factory in California, where wages and workers' compensation costs are among the highest in the world.
While Gil Martin, owner, gave some thought to moving to Arizona, Utt said the Mexican site was more attractive because the company didn't have to abandon its San Diego-area roots.
"A tremendous number of our workers currently live in Mexico," Utt said. "They know us, and we know they are good and skilled workers. We're happy to be able to keep them."
While the factory in Mexico is only a few miles from the old one, the labor market there is much more plentiful.
"We've been having a very difficult time hiring employees over the last year-and-a-half," Utt said. "In Mexico, there's a huge labor force. We put a sign up on our front door and we had enough applicants that we didn't have to advertise."
The need for this expansion is driven by strong and steady sales growth. The company enjoyed a 20% increase in 2003 on the heels of a 17% bump in 2002. Much of the recent gains are coming from the import program, which represented 10% of sales in 2003 and is on pace to reach 35% of the total this year. That is not to say, though, that the U.S. product has not been turning.
"We're very fortunate that we've sold everything we're able to produce domestically," Utt said. "When we ramp up production, I think we can sell it."
