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Omexey has backup BR factory in Vietnam

Retail Editor 3, Thomas Russell -- Furniture Today, October 3, 2005

For years, diversification has been part of Omexey Enterprises' strategy.

Today that holds true more than ever for this Taiwanese-owned and -operated furniture manufacturer.

Founded in Taiwan about 14 years ago, Omexey initially made metal dinettes and clocks. It moved to the Daling Shan area of Dongguan on mainland China about eight years ago, then built a larger plant in the same area about five years ago to make wood and metal furniture, clocks and, most recently, leather upholstery.

Today, the 1.02 million-square-foot plant is the company's flagship operation with some 3,000 employees and a capacity of 600 containers a month. That includes 200 containers of wood furniture, 200 containers of metal furniture and 100 each of clocks and leather upholstery.

The wood lineup encompasses bedroom, dining room, occasional tables and entertainment wall units for clients such as BenchCraft, SLF (formerly Samuel Lawrence) and Rooms To Go.

Its metal furniture includes dinettes, metal beds, occasional tables and components for clients such as Big Lots. It makes clocks for Howard Miller, Wal-Mart and Target.

Its diverse mix of mostly promotional to medium-priced furniture has kept the company busy, particularly in serving the U.S. market. Today, the United States accounts for 90% of its business on in wood and metal. Sixty percent of its clocks also go to the U.S. market, said Senior Vice President Samuel Liu.

America likely will remain its main market. However, the company also is looking to maintain its clock business in Japan and develop other business in Europe.

It also wants to move into more medium and even upper-medium price points. That could help it create higher profit margins at a time when the company is facing increased raw materials costs and increased competition in China on the promotional end.

Finally, it is building a wood bedroom plant in Vietnam that is expected to open this October. The 500,000-square-foot plant, which will replace a smaller facility it opened in Vietnam's Ho Chi Minh City last year, initially will employ about 700 people and turn out 150 containers a month.

Over 10 years, the plant could grow to as many as 3,000 employees and 500 containers a month of product ranging from bedroom to upholstery and metal furniture, Liu said.

In the U.S. antidumping case on Chinese wood bedroom furniture, Omexey qualified for the Section A duty rate of 6.65% last year. But with the upcoming administrative review process starting in late December, Liu and others worry that their rate could rise. So he believes Vietnam, in spite of its language barriers and related training difficulties, is the best bet for his company right now.

The Chinese government's push for development of high-tech industries in the Dongguan area, rather than furniture manufacturing, also is limiting growth opportunities there, Liu said.

"We will keep facilities in China and Vietnam," Liu said. "China will still be our flagship, but it makes sense to have Vietnam as a backup."

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