Theodore Alexander will shed OEM plant in Ho Chi Minh City
Powell Slaughter -- Furniture Today, November 27, 2005
Ho Chi Minh City, Vietnam — High-end full-line manufacturer Theodore Alexander has put Saigon Fine Furniture, its OEM plant here, up for sale or lease in order to concentrate on more profitable business.
The company said it has had to sacrifice margins to get the sales necessary to fully utilize the 425,000-square-foot plant, which opened in 2003.
"Our OEM customers constitute the lowest-margin category of our production," said Randy Austin, group president of Theodore Alexander. "We therefore are de-emphasizing our OEM business and reducing the number of OEM customers."
Remaining OEM production has been moved to the 1 million-plus-square-foot TA factory in Ho Chi Minh City, where 250,000 square feet of warehouse space will be converted to production, and affected warehousing shifted to an outside contractor.
"Theodore Alexander continues to grow, thrive and be very profitable, and this move is simply a smart business decision for us," Austin said. "We are expanding the part of our business that is the most profitable, and the part that we do best. We have indeed been going upmarket, particularly with (the) Althorp and Replica (collections)."
Meanwhile, the International Finance Corp., a private-sector arm of the World Bank, has agreed to loan $8 million to Theodore Alexander parent Paul Maitland International to help TA expand its lines and upgrade its facilities in Vietnam.
The IFC also will help PMI achieve certification for the sustainability of its wood resources, which includes a company-owned plantation.
Since its founding in 1956, the IFC has committed more than $49 billion of its own funds and arranged $24 billion in loan syndications for 3,319 companies in 140 countries.
