Furniture: A Strong Export Industry

March 1984

中文

1. Living room furniture and a writing table exported for the European marke.

Once man had tamed his outer environment, he began to think of ways to organize his inner living quarters. From stone age rock furniture to the space age's "modern rock," furniture has always been an integral part of our surroundings. Furniture has moved out of the cave and into virtually every aspect of our daily lives. This month Sinorama will present the reader with a general report on Taiwan's export furniture situation.

Taiwan has become the "King of Asian Furniture," having cornered one-twentieth of the world's total export furniture business. Today most furniture for export is Western style. In the past nine years the export furniture business has set outstanding growth records; even during the economic recession (two years ago), when other export industries were struggling to keep afloat, the furniture industry still managed to make small growth gains. There are two reasons for this success story.

The first reason was the stationing of the American Advisory Committee (1951). The Americans were used to Western-style furniture, so the local craftsmen designed and manufactured furniture to cater to their tastes. The result was a quality product at a reasonable price. Many servicemen stationed in Southeast Asia came to Taiwan when on leave. Army personnel took advantage of its special shipping privileges and sent many pieces back to the United States. These products were the predecessors of today's export furniture. Furniture manufacturers who came from mainland China to Taiwan produced Chinese style chests, cupboards, tables and chairs which were also shipped to America in the same manner.

The second and more direct reason for the development of this industry was the decline of the plywood business. The plywood industry's demise was caused by a lack of raw materials. These raw materials had to be imported from Southeast Asia. The "supply" countries decided to establish their own plywood industry, saving shipping expenses. Domestic manpower was also cheap and abundant. There was no way for Taiwan to compete with the supply countries, so she switched tracks to furniture manufacturing, taking advantage of furniture's high surplus value and domestic high-quality cost effective labor force.

Taiwan's biggest trading partner is the United States (over 1/2 of total furniture exports). Many of America's large-scale furniture manufacturers closed down various production lines and placed orders with Taiwan's companies when they realized it was cheaper to import these products.

The basic materials used to make furniture are metals, plastics, bamboo, rattan and wood. The most popular export metal furniture include: chaise lounges, file cabinets and office furniture, which are mostly exported to Southeast Asia. At first, Taiwan was an importer of metal furniture. After a short period domestic production was established, and now Taiwan is currently exporting this product. Plastic furniture exports at present are not a major export commodity, but show signs of a bright future as they are lightweight, reasonably priced and durable. Plastic furniture is ideal for installation in public areas like bus stops, airports and amusement parks.

The largest selling type of bamboo furniture is the bamboo chair with the chair legs curving at the base. The body is composed of long slats of bamboo which converge at the bottom of the chair. Other factories are involved in pasting plywood onto woven bamboo slats to make bamboo woven boards. The production of the boards requires a great deal of manual labor. To cope with this problem, the factories first cut the bamboo and then distribute them among the families in the surrounding vicinity. These farmers' wives are contracted on a piecework basis to weave and assemble the bamboo slats according to the manufacturers specifications. This bamboo product is popular, yet few factories are actually engaged in production, because the woven boards require too much manual labor, the machinery is too primitive, and the sales volume is relatively low. Many people will buy a chair to decorate their living room but few will buy a complete set. Also the investment capital is high; thus there exists only a small portion of the industry dedicated to exporting bamboo furniture.

Rattan, similar to bamboo requires a great deal of handwork. The major difference between the two is that Taiwan's bamboo can be used for manufacturing, while domestic rattan is too thin and must be imported from either Indonesia or the Philippines. The two largest markets for exporting rattan products are Japan and the United States. The Japanese market demand is for small quantity and diversification of styles. The United States market is for larger quantities and fewer styles. Diversification leads to a higher cost factor so, beginning six years ago, Taiwan's ninety rattan manufacturers set America as its target export country and the Philippines as its target supply country.

Liu Chia-mo, an expert in the rattan field, feels that the following measures should be implemented to improve the overall quality of rattan furniture; first, workers should be hired on a long-term basis and put through a comprehensive training program to develop a more competent worker; second, the production schedules should be standardized to insure accurate delivery schedules; third, partial automation of the industry should be researched to reduce costs and increase the pace of production; and the industry should be cooperatively organized to prevent overproduction of a particular item. This would encourage specialization, bringing down overhead costs and facilitate more reliable marketing estimates.

The woodworking industry is the most important part of Taiwan's export furniture market, including approximately two thousand companies. According to estimates, there are three to four hundred companies who are actively engaged in large-scale exporting. There are two types of large-scale woodworking factories.

The first group includes major corporations who invest in and establish their own factories. For example, the Formosa Plastics Group's Sunrise Plywood Corporation produces plyboard and building materials. After only four years in the industry, last year's total exports figure exceeded seven million dollars. A subsidiary of Cathay Trust Group, Golden Design and Furniture mfg., a former interior decorating firm is now involved in the woodworking industry. The number one corporation, Hong Kong Teakwood, is an Overseas Chinese backed company, whose general offices in the United States and Canada have enabled Hong Kong Teakwood to set up a sales operation network in North America.

The second group are companies who developed their own particular style of woodworking. For example, Hwangs Co. Ltd, specializes in European style furniture. An-wei Enterprises is well-known for its chairs which are unmatched in terms of creativeness.

Presently orders for goods are increasing due to the worldwide economic recovery. Business activity between Taiwan and its biggest trade partner (the United States) has made steady improvement since March of last year. The Taiwan-European market has also made great strides recently. These new developments have confirmed expert's confidence in the growth potential of Taiwan's export furniture industry. The industry itself has been most responsible for Taiwan's sustained growth record. Additionally the industry has been assisted by two government sponsored associations; the China External Trade Development Council (CETDC) and the Taiwan Forestry Research Institute.

Ten years ago the CEFDC began holding annual furniture exhibitions to coordinate domestic displays and to help promote Taiwan's products overseas. Numerous foreign buyers have participated in these events, allowing domestic companies an excellent opportunity to make contacts. Buying missions are also organized to participate in overseas shows. The purpose is to promote domestic furniture and to give manufacturers a chance to observe each country's product and develop a better understanding of the market. The CEFDC is the key behind-the-scenes coordinator for the export furniture industry.

The Taiwan Forestry Research Institute's Department of Agriculture and Forestry is engaged in research ranging from wood assessment, dry coating, adhesion, woodworking machinery, to management and sales promotion. If a factory has a technical problem it can request help from this agency. For the past nine years, the agency has been interviewing factory managers and inviting them to participate in regularly held research meetings to provide them with conceptual as well as technical guidance.

The export furniture industry, at present, has achieved a modest level of success, but this success can only be extended if the industry on all levels coordinates efforts to improve technology, labor skills and continues to strive for better quality export products.

(Craig Scott Galper)

[Picture Caption]

1. Living room furniture and a writing table exported for the European market. 2. Dining room sets (wood) are a major export item. 3. Multiple-layered bamboo is the domestic market's newly developed furniture material. Pictured is one of Taiwan's designed chairs.

1. The China External Trade Development Center holds an annual furniture exhibit which attracts many foreign buyers. 2,3. Living room furniture sets made of different materials produce different types of atmosphere. 2. Made of wood. 3. Made of rattan.

There are many different styles of domestically produced furniture. 1. A study desk. 2. A long coffee table which is preserved in the timber's original shape. 3. An Eastern style dining room set. 4. European style dining room table. 5. A large office desk.

1. White colored rattan bedroom furniture. 2. Rattan chairs and wooden tables make a teahouse look elegant and noble. 3. A complete set of bamboo bedroom furniture is simple, yet fresh and clean looking.