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Is Bangladesh the next stop for furniture sourcing?
In furniture production, one of the ingredients of success has been to follow the low cost labor. This idea goes back to the migration of the industry from New York and New England to the Midwest during the late 1800s. From the Midwest, it shifted to North Carolina and Virginia during the early to mid-1900s. In the 1990s, Taiwan, China and other parts of Asia were the next major stop.
As higher labor costs and related issues such as labor shortages arise in China and elsewhere, we can now look to a new chapter. Chinese case goods producer Lacquer Craft revealed it is building a plant in Bangladesh, its first outside China.
In discussing the news, company President Mohamad Amini didn’t sidestep one of the primary reasons the company is making the move: Labor costs in Bangladesh are 40% of the labor costs in China. The move also will help the company produce a medium to lower-medium-priced line of casual dining currently not available to its U.S. marketing companies. These include Lacquer Craft USA and Legacy Classic Furniture, both of which will be showing product from the new factory at the April High Point Market.
Located in Chittagong, the factory will be close to a port in southeastern Bangladesh, which is good for logistics. Still, the move comes with some challenges, Amini notes. He said there’s no furniture infrastructure in the area to immediately support the operation. The landscape, he said, is much like China’s 15 years ago, although there are plenty of other industries in Bangladesh such as shoes and apparel, giving the company access to skilled and semiskilled workers. That said, it will take time to train new workers and get the plant up to its full capacity of 200 containers per month.
Amini believes the company is up to the challenge, given its previous experience in China. He added that casual dining is a good place to start since it is a relatively simple product to produce.
Time will tell how successful Bangladesh will be for Lacquer Craft. Furniture/Today research shows the country only shipped $69,000 - that’s right $69,000 - worth of finished furniture to the U.S. in the first half of 2009.
While the move has some risks, apparently it has huge potential for a company like Lacquer Craft. With a population of 156 million, Bangladesh has a large pool of workers to draw from, including some already skilled furniture workers now migrating to places like Malaysia that import much of their labor. As their visas expire and they get sent home, they may very well look for opportunities in their home country.
In the meantime, retailers may want to check out the new casual dining offerings at Lacquer Craft USA and Legacy Classic this market. What do you think about the new product? And what do you think this development means for the industry?
Outside the box commented:
Negative Americans, as always. #1- FUR producers would gladly have factories in the US if the numbers made sense. How can the numbers make sense? Americans are willing to pay the cost for furniture that would be produced there. #2 No market means no imports... Obviously there are enough people buying the "junk" to keep the shipments coming. Start buying only made in usa and start the trend!
Don commented:
Yes, it is amazing. People are, most of the time,thinking about every difficult situation in their life in $$$$$. If I can put more money in my pocket, what is more important then that? We are fighthing against each other. But, there is a solution.
Cutler commented:
It's very unfortunate to read another article like this. I would love to come on Furniture Today to read a blog about one new facility opening in the U.S. But as long as companies like Lacquer Craft continue to only see the short term effects of increasing their stock prices, they will never see the long term effect of moving jobs away from their consumer base. My question is how will consumers and retailers like you and I be able to make a living and afford to buy imports if we don't have good jobs to pay for them? Or are is America doomed to crash and burn like Greece and other countries in line for bankruptcy?
c1boobear commented:
I have to agree I would LOVE for production to stay in America, but to blam the messanger for what he his reporting is a bit unfair. He did not make the furniture industry as it is today he only reports the news. It up to us, the American people to elect representatives to vote in out best interest. Make import tax so large companies would reconsider sending things over seas. You complain but what do you do about it? I bet if I walked into some of your homes, I would find so many over sea productions in there I could not count them all. Grow up people. Your parents and grandparents made this for what it is and so do you for buying anything made overseas. Don't complain about the news do something about it!
solly currrent commented:
in1800 when mfg moved people lost jobs then also,is that ok then,its not good then or now,sending jobs to overseas companies leaves no $ at home,lines pockets of strangers w no interest in any domestic community activities or local help of any kind.like wal mart lvs empty downtowns where small biz once survived.and they make junk to boot
Lynne26Pollard commented:
I took my first credit loans when I was not very old and it aided my business a lot. But, I require the consolidation loans again.
its just furniture commented:
Amazing are the comments being made....I wonder if similar nonsensical statements were made by industry members in the late 1800's when manufacturing moved from parts of the midwest to North Carolina? When did we all become so elitest in thinking that only one manufacturing area owns the rights to producing furniture?
THOM commented:
Sadly, our industry is creating a generation of consumers that are unable to appreciate "value" and "quality" furniture for their homes. Let's call them the "dumbed down" generation.
Lets Get Real commented:
There is no chance of it coming back to the US at this point, the health care bill killed that. With all that added cost the numbers won't work. Thank you Democrats.
Waiting for a professional editorial in vain commented:
Once again a FT reporter misses the whole point. Can we ever get real journalism here? He should respond to the reader responders because they certainly understood what this move meant. As long as this industry remains production driven rather than product driven, it will drive itself to destruction. Let us hear what you think the results will be for the industry in the long run, Tom. Lacquer Craft has done nothing for the manufacturing or retailing industry as far as the US is concerned other than to line its pockets at the expense of the deaf dumb and blind US bean counting factory owners.
dun w garbage commented:
69 000 that was 800 pcs furniture for that amount,yup just what the doc ordered more borax for less,when will it end? labor, quality and price,what happened real value,integrity,design,not cartoon icons from modeling magazines,bring back good fesh design .
Big M commented:
I'm sure Ashley will jump on this. Bring more $#%#%%$ into the USA.
Schlock & Awe commented:
Yes, we really need more low end crap flooding the marketplace.
SCHNEIDER commented:
Amazing. Where does it end? So that some retailer can offer an 8 pc dining room or a 5 pc queen br for $299 at 50 points of margin? How much lower must we go before this slide completely destroys retail furniture stores?






















