Taiwan's already embattled manufacturers of living-room furniture have faced an additional blow over the last half year as rising iron and steel prices have cut into profits and forced them to consider new ways to pare costs.

The surging cost of iron have proven particularly onerous as the material has been more widely used by local furniture makers in recent years. Steel prices have risen by more than 50% over the past six months, yet producers have been loath to pass the higher costs onto their customers as cheaper rivals in mainland China and Southeast Asia gain ground in lower-end markets.

Some relief has come in recent months, however, as domestic iron and steel prices have started to edge down. Local furniture producers hope the trend will continue through at least the end of the year.

Strength and Warmth

Grand Furniture Manufacturing Co., Ltd. Is one of the many furniture manufacturers in Taiwan that have shifted their focus from single-material to composite-material products in recent years. The decade-old company currently specializes in high-quality metal-tube furniture with wood finishing.

Grand's main products are knock-down (K/D) metal-tube tables, desks, chairs, and bed racks. These items feature the company's unique finishing method and incorporate glass and wood components.

Company export manager Stella Cheng says that the combination of steel and wood in Grand's products imparts feelings of both strength and warmth. These qualities, plus the sophisticated look produced with special finishing techniques, have helped Grand woo consumers in high-end markets, she says.

Grand can ship 2,000 40-foot containers of furniture per year from its factory in Dongguan, Guangdong province, mainland China. Cheng says that the Dongguan plant is equipped with state-of-the-art production equipment that can flexibly produce items according to customer specifications. Such flexibility has helped the company win many big-ticket orders from foreign buyers.

The company currently exports all of its products, mainly to Europe, Australia, the United States and Japan.

Artistically Designed

Phoebe & George Enterprise Co., a manufacturer of K/D metal furniture and computer desks, has gradually increased the use of composite materials in its models to meet the demands of the global furniture market over the past several years.

The company's K/D metal-furniture line is focused on items for use in living rooms, dining rooms and studies. With their simple lines and artistic designs, these products are warmly welcomed in the European and U.S. markets.


Most of Phoebe & George's coffee tables, end tables, and dining-room sets have iron-pipe structures with wood and glass components.

The company says it has accumulated much expertise in designing innovative and modern products to meet various market needs.

In the past, Phoebe & George concentrated on sales to the U.S. market. However, since last year the company has been expanding its sales to Europe, where it recently landed big-ticket orders from two customers. The company plans to increase production of European-style furniture to meet the demand of the new customers this year, according to company president George Kao.

Last year Kao's company added several new items to its product line, including a popular series of bar stools. This year the company is turning out bedroom sets for export to Europe.

Kao underscores the importance of keeping a close eye on international furniture trends since the market is constantly changing.

Phoebe & George set up a 10,000-square-meter plant in Guangdong Province, mainland China five years ago and it plans to open another two facilities there by the end of October this year. The three plants will have a combined production area of 30,000 square meters and a total output threefold the company's current level, Kao says.

Despite the shift of production to mainland China, Phoebe & George still procures high-grade iron and steel from Taiwan's state-run China Steel Corp. (CSC). "Most mainland iron and steel is not reliable," Kao says. "We sell to high-end markets around the world, so we have to use high-quality materials to win the trust of our customers."

In addition to the utilization of high-grade materials, Phoebe & George ensures top quality through a strict quality-control system.

Although the company designs most of its products in-house, it also welcomes orders on original equipment/design manufacturing (OEM/ODM) terms. "We are seeking foreign furniture manufacturers interested in cooperating with us to develop innovative products for worldwide sale," Kao says.

Producing in Vietnam

HT International Co., Ltd., established a decade ago in central Taiwan's Taichung County, specializes in the production of wood living-room furniture. To cut production costs and enhance its international competitiveness, the company moved its production facilities to Vietnam about two years ago.

The company says that the lower costs enabled by its move to Vietnam has helped it win new customers from Britain, the U.S., Canada and other industrially advanced countries.

HT produces a wide range of furniture in different styles and models, including such living-room items as coffee tables, flower stands and telephone stands. Most of these products are developed in cooperation with foreign buyers on OEM terms.

In order to make the high-end products demanded in its main export markets, HT imports high-quality medium-density fiberboard (MDF) and rubber wood from the U.S., Southeast Asia and other areas.

Wide Selection

Founded in 1983, Franco International Group Co., Ltd. Manufactures a wide range of wooden furniture, from coffee tables and dining tables to chairs, desks, and much more.

The company has two factories with a total of 1,100 workers in Vietnam and mainland China churning out high-quality products that management says have been acclaimed by customers worldwide, especially in the U.S., Europe, Australia, and Asia.

In addition to its export operations, the company imports lumber, MDF, particleboard, veneers, and various other wood materials for sale to domestic producers.

With a top-notch design team and advanced production equipment, Franco is able to provide customers with high-quality products in diverse styles that meet the latest fashion trends.

Although it has an in-house R&D department, the company also welcomes original designs and ideas for cooperative product development and production.