Lacquer Craft parent plans Bangladesh factory
Will start producing casual dining sets in July
Thomas Russell -- Furniture Today, March 26, 2010
HIGH POINT — Samson Holding, the parent company of Chinese case goods manufacturer Lacquer Craft Mfg., is investing about $15 million to build a casual dining furniture factory in Bangladesh.
It will be Samson's first plant outside China. The company says it can fill some of its product needs at a lower expense in Bangladesh.
The 500,000-square-foot plant will be in the port city of Chittagong in southeast Bangladesh, along the northern coast of the Bay of Bengal. Company officials have been working on the project for about two years. Construction began in October and initial production is set for July.
The plant will produce a line of lower-medium to medium-priced solid and veneer casual dining sets for Samson's U.S. marketing companies, Legacy Classic and Lacquer Craft USA. The company isn't currently producing such sets in China that hit the price points it can achieve in Bangladesh, said Lacquer Craft President Mohamad Amini.
While China remains its main manufacturing hub, the company said it chose Bangladesh because of its lower-cost labor. Amini estimated that labor costs are about 40% of what they are in China.
Samson also is establishing a sawmill in Southeast Asia to supply plantation-grown hardwoods to the new factory.
At full capacity, the plant will employ 2,000 workers and produce about 200 containers of finished goods a month, he said. Employment will be lower to start, since the plant will take some time to reach full capacity, Amini said.
The Bangladesh facility will be far smaller than the company's 4.5 million-square-foot case goods plant in the Shanghai area, which employs 5,000 workers and has a capacity of 1,600 containers per month. It also has a 2.5 million-square-foot case goods plant in Dongguan, China, that can produce about 600 containers per month and employs about 3,000 workers.
Since furniture is a relatively new industry to Bangladesh, it will take time to train workers and also to get the supply chain in place, Amini said. This includes anything from finish to hardware suppliers.
"There is no furniture presence there," he said, adding that the lack of a furniture infrastructure reminds him of China 15 years ago. "Although we are very optimistic about what we can do there, we will have our share of challenges. But we have done this in China so we know what to do to accomplish our task."
Amini said a team of supervisors, technicians and engineers from China will help get the plant running and train workers.
"We are exploring ... different opportunities to bring value from different parts of the world," he said.
Lee Boone, president of Legacy Classic, said Legacy plans to show seven new casual dining sets made in Bangladesh, tentatively priced to retail from $499 to $799 for a table and four chairs, at next month's High Point Market.
"The sizes and scale (of the new sets) will be large and heavy for casual dining," Boone said. He added that while some sets will use veneers, they'll primarily be solid wood.
Lacquer Craft USA will show 10 new "family dining" sets from Bangladesh at market, said company President and CEO Randy Chrisley. These start at $599 for a table and four chairs.
"We showed these at Premarket and they were very well received," Chrisley said. "Dealers came into our showroom and liked what they saw, and saw a whole new opportunity to do a lot of volume with some great value, finishes and quality."
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