Taiwanese Furniture Makers Innovate to Better Compete Globally

A couple returns to Taiwan to share

The massive outflow of Taiwan's furniture manufacturers over the past two decades has drastically changed the landscape of the sector, forcing many to come up with more creative solutions to better compete globally.

Some of the makers are going upmarket, building unique, high quality pieces, ones with higher margins, to take on the undersellers from Southeast Asia and China. The general belief amid the industry is that creative designs and high quality are proven strategies that work during harsher times.

In addition, increasingly more furniture manufacturers in Taiwan realize innovation and function are becoming two important factors to raise product value. The suppliers have also been investing in R&D and manufacturing technologies to achieve such goal, which is helping Taiwan's furniture makers capture attention in many international furniture shows to regain reputation, position globally.

Dynamic Maker

Founded in 2000, Sam Yi International Co. is a furniture manufacturer in Taiwan who is never complacent, offering a wide variety of high-end glass and metal furniture products, including dinettes, TV stands, bar tables & stools, coffee tables, trolleys & serving carts, hangers, wall & standing mirrors, office chairs, bookshelves, CD & magazine racks, bathroom accessories and more.

"Focusing on producing high-end innovative products, we have a strong R&D team of around five furniture professionals and designers in addition to a workforce of 50-100 skilled craftsmen," says Lily Wang, sales manager. "Developing unique designs and creative functions are the best way for us to build increasing popularity in the world market."

Meeting Changing Demands

To meet ever-changing global trend and occasionally choosey tastes among customers, Sam Yi develops more than 60 new products per year and boasts annual sales of US$10-50 million. The company exports almost 100% of output, mainly to North America, Europe and Japan. "We used to sell half of our production to Japan and the other half to North America and Europe. However, our shipments to Japan, where deflation has hampered economic growth, has dropped to 20% while that to North America and Europe has risen to 80%," Wang says.

Impacted by the global downturn and rising prices of raw materials, Sam Yi has weathered rough times over the last two years due to falling orders and rising manufacturing cost, with shipments plummeting 30%-40%.

The gradual recovery in many parts of the world since the beginning of this year has taken operations back to normal, with rising orders from clients.

Sam Yi has a modern factory in Taichung, central Taiwan of about 3,500 square meters, which turns out 80,000 pieces of various furniture monthly.

The recovering economy is motivating this maker to participate in quite a few leading international furniture shows this year, to display a line of newly developed products. At this year's Malaysian International Furniture Fair (MIFF) held March 2-6, the company showed off several innovative products that were attention grabbers, including a wheeled foldable multifunctional clothes rack and compact three-tier TV stand. Both are saving-space and easy-to-assemble, perfect for young consumers in bachelor suites and smaller apartments.

Diversified Maker

Established in 1986 in Taichung County, central Taiwan, Ho Shuan Enterprise Co., Ltd. processed metal tubes and plates for local supply initially and then diversified into production of finished furniture products. "My father founded the company about 25 years ago and produced metal tubes and plates for domestic manufacturers, mostly those in the furniture industry in the early years. Later on my father decided to diversify into finished furniture to make metal furniture specifically," explains Wayne Weng, sales manager and likely successor of the company.

"I only joined the company eight years ago when my father asked me to return from the United States, wanting me to help run the company and particularly reinforce sales channels," he says. "I began by taking charge of export to lessen dependence on traders that typically undermine profit."

Ho Shuan turns out a variety of items backed by a factory and an R&D office in Taiwan, including RTA work stations (PC desks), study carrels, TV stands & cabinets, K/D desks & related units, roller shutters, bathroom series, school furniture and more.

To achieve integrated manufacturing without heavy investment, the company works with many local plants in addition to its own workforce of about 30 persons in charge of R&D, quality control, key manufacturing processes and packaging.

"We once considered moving to China to tap lower materials and labor costs," Weng says. "But we finally decided otherwise, instead of choosing to stay put to achieve product differentiation by concentrating energy on improving production capability to turn out middle-to-high-end products like work stations and study carrels, which are more functional and structurally compact than traditional low-end PC desks."

Weng stresses that having structural design expertise coupled with molding skills are pivotal in leaving behind Chinese rivals, mainly because adept molding assures fully-realized structural design, but also production efficiency and flexibility.

Over 130 Items

The maker offers more than 130 furniture items and ships on average 16 TEU containers overseas monthly. "We export almost all our output, mainly to the United States that takes a lion's share of 60%-70% of our shipments. We generate products for our American clients mainly as OEM and ODM, and sell the remaining 30%-40% to Europe, the Middle East, and Africa," says Weng.

To stay competitive, Ho Shuan develops innovative new products in small volumes to satisfy mid- and upmarket consumers. "We focus on fabricating innovative high-end products in relatively small volumes for delivery to small- and medium-sized furniture companies overseas. I believe creativity and innovation are key for furniture manufacturers on the island to survive globally."

Last year the company developed a stylish TV stand and an ergonomic work table coupled with a chair, with the former of bentwood, metal and glass and the latter of PVC board and metal. Both pieces are easy-to-assemble and feature trendy aesthetics. In addition, the maker unveiled early this year an innovative and attractive bicycle-shaped magazine rack integrated into a coffee table, which is ideal as a creative addition to any living room.

Office Chair Specialist

To keep at bay price-cutters from rivals in China, Chueng Shine Co., a leading office chair maker in Taiwan, has long been engaged in turning out products featuring advanced technologies, multiple functions, and sophisticated design to target upscale buyers.

Established in 1981, Chueng Shine started up as a hardware processor in Chiayi County, southern Taiwan, and diversified into a maker of OA chairs in 1988. Subsequent growth means the company has now set up integrated production that enables it to boast a 70% in-house content rate. Company executives claim that they don't have to subcontract all critical manufacturing processes, including iron and steel shearing, forming and processing.

To meet eco-protection standards, hazardous and polluting processes such as electroplating and spray-painting are farmed out to subcontractors with in-house pollution-control facilities. "All the products we make are recyclable and reusable in compliance with green regulations stipulated by industrially advanced nations," stresses Lawrance Lu, son of company founder and now special assistant to his father. "For instance, we employ eco-friendly PP (polypropylene) instead of toxic PVC (polyvinyl chloride), and we minimize using formalin in wooden boards. At the same time, we use specially designed mechanisms to reinforce structure."

The maker has been continually upgrading manufacturing processes for high-quality products, hence becoming ISO-9002 certified as early as 1998 and was upgraded to ISO-9001:2000 in 2003. Dedicated to making high-quality products, the company has invested in sophisticated testing equipment besides automated production.

Ergonomic Chair

In recent years the company has been focusing more on developing ergonomic OA chairs and desks that are multi-adjustable in seat height and angle for better comfort. "In addition to a workforce of more than 100 persons, we have a strong R&D team of about six designers and experts who on average roll out four to six new models every six months," he adds.

"Lately the R&D team has unveiled a new OA chair of streamlined shape and chic panda-like designs. The chair can be adjusted in seat height, back tilt, lumbar support height, armrest height as well as headrest height," Lu explains. "The chair was debuted at MIFF 2010, held March 2-6 in Kuala Lumpur, and received ample inquiries. We plan to start mass production of the chair in the second half of this year."

Chueng Shine exports 90% of output and sells the remainder locally. "Japan has been our major buyer and used to absorb around 50% of the company's shipments. However the percentage has in recent years shrunk to 30% due to Japan's serious economic downturn," Lu says. "The United States, Europe, Russia and the Middle East are also important overseas markets, while we plan to further develop existing markets and tap others."

The global downturn has hit hard Chueng Shine, whose orders have dropped 30%-40% last year, but orders have rebounded above expectations amid the gradual recovery. "Steep competition is always a factor in the world market but we will keep forging innovative high-end products to maintain strength," Lu states.

Returning to Taiwan

Having been in the furniture industry for over three decades, Shirley Kang and her husband halted their furniture business in China and returned to Taiwan last year. With the grand goal to share their experience and know-how with Taiwan's furniture industry, the couple established last year a furniture maker on the island-Taiwan Folding Table Co., Ltd. (TFT), picking up where they left off in China.

"Our company focuses on R&D and subcontracts manufacturing to local factories," Shirley says. "I am glad to be back and so is my husband. We believe Taiwan is a good place to make high-end products since it has many well-established plants that form an efficient subcontractor network, offering parts and items as needed by different industries."

Backed by efficient satellite plants, TFT is concentrating on development of creative furniture items, mainly folding tables. "Like our corporate acronym, we are dedicated to development of folding tables and desks," as Shirley rationalizes the company name. "I am sure of the current trend in the furniture industry that emphasizes ergonomics and innovative design as well as eco-friendliness and compactness."

Early this year TFT unveiled a smartly designed portable folding laptop PC desk that folds into a knapsack and four extendable metal legs. Featuring intelligent design, the knapsack is divided into upper and lower levels with the former being a desk to place notebook PC and latter a storage rack that can hold and store the four metal legs. The knapsack also holds the laptop when not in use.

Proving its popularity as a smartly designed item, the laptop PC desk-in-a-knapsack is lightweight, compact, and flexible, features of which have helped to gain attention since its global unveiling. To achieve wider global sales, the company is always looking for agents at home and abroad to help build stronger sales channels for this very practical product.