Lacquer Craft: Giant with two big feet
By Thomas Russell -- Furniture Today, October 3, 2005
Dongguan, China — Many furniture makers would cringe at the thought of moving into a new factory or headquarters. But if it's necessary for growth, they have little choice but to embrace the opportunity.
That's what case goods manufacturer Lacquer Craft did about two years ago when it decided to consolidate several Dongguan area factories into a single location.
At the time, the Chinese government was pushing for the development of high-tech industries. That required the company to move about a mile from its original plant to the Daling Shan area of Dongguan.
The move gave Lacquer Craft a chance to consolidate its main Dongguan plant and some smaller ones into one facility, which boosted efficiency, said President Mohamad Amini.
Meanwhile, Lacquer Craft was getting ready to move into another major plant some 800 miles to the north, or about an hour and 15 minutes west of Shanghai.
That plant makes medium to medium-high-end case goods and dining room furniture for the company's U.S. marketing arms, Legacy Classic and Universal Furniture. The Dongguan plant makes medium-high to high-end furniture for clients such as Thomasville, Lexington, Bernhardt and Henredon.
Before the move, the main Dongguan area production plant and secondary area production facilities were about 2.5 million square feet in size. Together, they had five finishing lines and a production capacity of about 1,000 containers a month.
Combined, the two new factories have 6 million square feet, nine finishing lines and a production capacity of roughly 2,200 containers a month.
Lacquer Craft chose the area west of Shanghai partly for the same reason it moved its former plant in Dongguan. The Chinese government wanted to leave more land open to high-tech industries, so that essentially left limited space to build in the Dongguan region, according to Gary Gone, a special assistant to Amini who helps run the Shanghai operation.
Gone said the Shanghai plant is in what's called a China Timber Industrial Zone, which houses a cluster of wood processing companies.
A recent tour of both facilities illustrates the massive and complex nature of Lacquer Craft's China operation.
The Dongguan complex has about 2 million square feet under one roof and 4,000 employees, mostly in production. Now running at full capacity, it has three finishing lines, two for case goods and one for dining room furniture, and can ship about 600 containers a month.
In addition to dining and bedroom furniture, the plant produces some home entertainment, home office and occasional goods.
Other features include a 200,000-square-foot raw materials warehouse and a nearby rough mill that cuts wood and veneer to dimension. There's also a temperature-controlled veneer room and a separate parts warehouse, dry kiln facilities, a finished goods warehouse, administrative offices and dorms for 4,000 workers.
The Shanghai complex has about 4 million square feet under one roof and more than 7,000 employees. Like Dongguan, 90% of those are in production.
Running at roughly 80% capacity in late August, it has six finishing lines and can ship 1,600 containers a month of mostly bedroom and dining room furniture.
Other features include a 260,000-square-foot raw materials warehouse and a 260,000-square-foot rough mill that processes 50 million board feet of lumber per year and 40 million square feet of veneer.
It also has a veneer room, worker dorms and a 300,000-square-foot finished goods warehouse that receives goods via conveyor from the production facilities, storing 1,800 containers of finished product.
In 2002, Lacquer Craft had U.S. sales of just over $400 million. Last year, sales were $411 million, ranking it No. 9 on Furniture/Today's list of Top 25 U.S. furniture manufacturers and importers.
With plenty of available land at both sites, the operations have room to expand. While plans are still being finalized, a Shanghai expansion could include three new production lines, a new finished goods warehouse, and medium-density fiberboard and particle-board processing facilities.
For now, Amini is content with the new factories, saying they represent the company's ongoing confidence in China as a source for quality furniture.
"I think our current presence in China shows our commitment and belief that China's future is very bright," he said. "When you look at it from every angle, as a whole, China is still attractive."
