Culp plans to make fabric in China plant
By Susan M. Andrews -- Furniture Today, April 13, 2003
High Point — Culp Inc., the second-largest U.S. producer of upholstery fabric, is launching manufacturing and distribution operations in China, the first major domestic mill to do so.
The company is leasing a 65,000-square-foot facility near Shanghai that will begin production with about 30 employees by Nov. 1. The plant is expected to be running at full capacity within two years, employing as many as 150 people. Culp will invest about $3 million in equipment and facility improvements.
Rob Culp, chairman and chief executive officer, said the strategy is to link his company's strong customer relationships and design and technology knowledge with the cost advantages of China.
"This strategic initiative will enable us to integrate China-sourced goods with our domestic line and allow us to expand our business with midpriced to higher-end fabrics," he said.
"We believe the production from our China operation will complement rather than replace production at our other facilities and further enhance our competitive position," Culp said. "In China, we will have the capacity to produce 150,000 yards of fabric per week, which represents about $25 million in annual sales for Culp."
Although the company is not ready to discuss pricing for the China fabric, Ken Ludwig, senior vice president of human resources, said that if the goods were made in the United States, they would be in the range of $7 to $14 per yard.
Culp plans its first major introduction of fabrics from China in July at the summer Showtime fair here.
Through the China distribution center, Culp will offer multiple delivery and packaging options, including finished fabric roll goods as well as cut-and-sew fabric kits. The facility will provide on-site quality control testing and fabric inspection that meets U.S. standards, the company said.
The China operation will include a plant to provide value-added finishing to fabric designed by Culp and sourced from Chinese mills. Culp also has created a dedicated U.S.-based design group that will work closely with Chinese weavers.
In addition, Culp is planning to source low-cost raw materials, principally yarn, for its U.S. plants from China.
Michael Messer has been named vice president and general manager of the China operations and will relocate to the Shanghai area. He is a 21-year veteran of Culp and most recently was vice president of manufacturing for the Culp Decorative Fabrics division. His former duties will be absorbed into the organization.
Thomas Sibley Jr. has been named product manager and will serve as a liaison between the company's design group and its customers. In addition, he will coordinate sales of the China-sourced product through Culp's existing sales force. Sibley was previously a regional sales manager for the company's contract fabrics. His former duties also will be absorbed.
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