The rising price of iron and steel over the past year has forced domestic manufacturers of office furniture to shift to non-metal materials. In today's competitive market, they explain, there is no room to increase prices to offset the higher material costs.

The strengthening of the New Taiwan dollar against the U.S. greenback also worries domestic furniture manufacturers, who depend heavily on exports. The dual disadvantages of rising materials costs and an eroding currency-exchange situation have encouraged some producers to turn their attention to the domestic market, in particular the growing number of local hypermarkets.

Others continue to focus on exports of high-end products, which producers say command more reasonable prices abroad than in Taiwan.

The use of multiple materials and designs aimed at younger fashion-conscious buyers are other strategies that some producers have embraced to survive in today's changing market. Some manufacturers are also discovering the benefits of branding in propping up margins.

Brand Pioneer

Founded eight years ago, Huei Jiu Tsai is one of the few manufacturers of own brand furniture in Taiwan. The company specializes in office chairs made of various materials, including plastics, synthetic and natural leathers, and fabrics. Many of its items are made of multiple materials.

The company has two plants in Taya, Taichung County, central Taiwan. One plant is devoted to products for domestic sale and the other for exports, according to Lin Tsung-yi, sales manager of the company. "We separate production to meet the different demands of foreign and domestic customers," he says.

At the beginning of this year, Huei Jiu Tsai began selling its products under its "Home's" brand. Lin says that branding helps the company reinforce its high-quality image both in the local and overseas markets.

Huei Jiu Tsai develops most of its own products in-house, though some items are produced for foreign customers based on their original designs. The company also adopts a rigorous quality-control system to keep quality standards high.

Most of the domestic sales of Huei Jiu Tsai are made through hypermarkets. Lin estimates that about 70% of the office chairs sold at hypermarkets in Taiwan are made by his company.

Huei Jiu Tsai has also invested in two plants in Guangdong Province, mainland China, one with a production area of 540,000 square feet and the other 720,000 square feet. Both plants will begin test runs in the first half of next year.

One of the mainland plants will produce office chairs and the other will make occasional chairs, electric beds, and electric-motor vehicles. The mainland production facilities utilize integrated production methods to ensure production efficiency as well as quality.

Huei Jiu Tsai has also made all-out efforts to expand international sales. "In the past, we entrusted domestic trading companies to help us penetrate international markets," says Lin. "As our operations grew, we decided to handle the export business on our own. Boosting foreign sales is one of the major reasons that we created our own brand."

Huei Jiu Tsai will transmit its successful Taiwan marketing strategy to the mainland by setting up marketing beachheads in Tianjin and Shanghai. The company is also in talks with the Ting Hsin Group to have its products distributed through Ting Hsin's hypermarkets in the mainland.

Since last year, Huei Jiu Tsai has participated in several international furniture shows, including those held in Singapore, Cologne in Germany, Dubai in the United Arab Emirates, and Kuala Lumpur in Malaysia.

The company says it received many orders at the Cologne International Furniture Show last year and it plans to attend the show next year as well, Lin says.

Sunny Prospects

Sun White Industrial Co. is another domestic manufacturer of original-design office furniture. Founded in 1990 as an iron-pipe processor, the company has evolved over the years into a full-fledged furniture manufacturer.

Currently the company specializes in production of dining room furniture, living room furniture, bedroom furniture, computer desks, bookshelves, television stands, stereo racks, magazine stands, telephone stands, metal audio/video stands, wood shelves, cupboard tables and desks, occasional tables, SOHO (small office, home office) workstations, file cabinet, and various kinds of knock-down (K/D) furniture.

Despite the variety of its furniture products, the ISO9001:2000-certified company currently concentrates on the production of computer desks and bookshelves. Almost all of its products are exported, mainly to the U.S., Europe, and Japan. The U.S. market accounts for 70% to 80% of its annual total output.

Sun White president Tseng Jen-chu says that his company has always placed strong emphasis on its product design operations. "The variety of our product line is the payoff for these efforts," he says.

Based on its experience in iron-pipe processing, Sun White has much skill in making furniture items with various styles and functions.

Sun White boasts it has the ability to develop the most modern products to meet the ever-changing demands of customers, especially younger buyers. One such item is a recently developed office computer desk with file rack.

In order to woo young buyers, Sun White has shifted from its emphasis on iron pipe as the major material in its K/D office furniture, and now uses various materials, such as aluminum alloy and acrylic, says Tseng. "It took a lot of effort on the part of our R&D team to combine these two different materials," he says.

An emphasis on design comes naturally to Tseng, who has over 20 years of experience in designing and producing office furniture. He devotes a lot of effort to training young workers and imparting his decades of experience to them. Talented workers, he says, are the most precious assets of the company.

Sun White offers regular training courses to help its workers grow. "In the modern world, people have to learn modern skills, including production-and even speaking eloquence and international manners," notes Tseng. "To this end, I have invited some experts to teach such skills to our employees. I believe well-trained and courteous workers are the only way to win the confidence of global customers. As we are an export-oriented firm, I hope our entire team can do its best to win the confidence of foreign customers and generate business."

Quality is another area in which Sun White allows no compromise. "We aim to become the best furniture producer in Taiwan-and eventually the world. So I have asked our satellite factories to supply only high-quality components," says Tseng. He attributes his company's steady growth over the past number of years in large part to this exacting attention to quality.

The company posted NT$140 million (US$4.11 million at US$1:NT$34) in sales revenues last year, double that of the previous year. In the first nine months of this year, the company achieved the same sales revenues as the whole of last year.

Simple Functionality

Stylesystem International Corporation, established in 1996, specializes in the production of multifunctional office furniture featuring simple designs, says Hung Yu-pin, president of the company. The company has close cooperative relations with a number of domestic manufacturers of office furniture, which helps it to develop these innovative products.

Stylesystem began operations as a furniture trader and later transformed into a furniture manufacturer and exporter. The company also distributes high-end imported furniture in the domestic market.

Stylesystem's major product lines include system furniture, office chairs and sofas. The company exports its chairs to Asian markets and is making all-out efforts to penetrate the European market. Most of its products are K/D models.

At the beginning of this year, the company obtained distribution rights for the "Hoop" furniture series produced by Italy's Parri Co. It has also won distribution rights from another Italian manufacturer, Alea Co., to distribute the "Zefiro" furniture series.

Since last year, Stylesystem has been exporting high-end office furniture. It is seeking sales agents in Singapore, Hong Kong and Europe for the new furniture line.

Early this year, the company opened a product showroom in Taipei to display both its own and exclusive imported products.

With the aid of its talented in-house R&D team, the company designs stylish office-furniture items that meet customers' tastes and capture international trends. The company says its products are designed specifically for the U.S. and European markets.

Hung says that his company can also tailor its designs accordingly to meet specific customer needs.

Stylesystem's innovative and ergonomically designed office furniture has won many prestigious awards in Taiwan, including the "Best of Taiwan Products Award", "Good Design Products Award", and the "Symbol of Excellence Award".

Recently the company has submitted a sofa and occasional table design with the semi-official China External Trade Development Council to contend for its Symbol of Excellence Award this year.

Efficient Operations

Founded in 1997, Dig Jet International Co. is a manufacturer of office furniture that has recently expanded into living-room and dining-room product lines. To increase its competitive edge, the company has made all-out efforts to reduce costs by standardizing production procedures and streamlining its management system.

As part of a corporate overhaul, Dig Jet recently moved its administrative, warehouse and showroom facilities to a new 25,000-square-foot site, leaving its existing factory to focus on production. "The separation of administrative and manufacturing functions has boosted our production efficiency," says Henry Wang, president of the company.

The move has also enlarged the manufacturing space at the plant to accommodate the production of new home-furniture series, adds Wang.

Other changes underway at Dig Jet include experimentation with new cost-competitive materials in response to the skyrocketing rise in steel and iron prices over the past year. "If domestic steel suppliers don't reduce their prices, a lot of metal-furniture makers in Taiwan could move their production facilities somewhere else," Wang warns.

An ISO9002-certified company, Dig Jet supplies tables, chairs, file cabinets, partition systems, computer desks and other related items. The company has many skilled workers able to produce furniture made of compound materials, such as wood combined with metal.

"Taiwan has a large pool of talented and skilled workers, so we have no plans to move our production facilities overseas," Wang says. "Taiwan also has a strong hardware industry to support out development of high-quality furniture." He notes that instead of seeking cheaper labor to boost its international competitiveness, his company will hone its manufacturing skills and strengthen management systems.

In the second half of 2001, the company began selling computer desks in Taiwan through major wholesale markets, including RT-Mart and Makro. At present the company mainly sells K/D computer desks through such outlets on an original equipment manufacturer (OEM) basis.

At present the company sells 60% of its output to the domestic market, with the remainder going to foreign markets, namely North America, Latin America, the Middle East and South Africa.

"We are targeting some new export outlets in Europe and Southeast Asia," Dawn Wen, export manager of the company, notes. There has been good progress, she states; by way of example, at a furniture show in Kuala Lumpur of Malaysia in March this year, a German buyer showed strong interest in the company's HT-9001 multifunctional K/D computer desk, which can also be used as an office desk and is designed to meet the demands of SOHO users.

Dig Jet has in the past focused on the production of high-end furniture. But the economic recession over the past year has forced the company to add lower-priced items to its product line. "The new models are aimed at budget-conscious consumers who buy from wholesale markets," says Wen.

Despite the lower prices, says Wen, Dig Jet does not compromise on the quality or functions of its products. This has proven to be a winning combination. Wen says that the company once sold 5,000 polyvinyl carbonate (PVC)-covered particleboard K/D computer desks in two weeks through local wholesale markets.

Dig Jet hopes to export its successful experience in the domestic wholesale market to overseas markets. "We plan to sell our products to overseas on an OEM basis," says Wen, adding that her company is now in talks with a British wholesale chain.

In order to make its products more competitive in overseas markets, Dig Jet has been computerizing its design procedures and automating production. Wen says that automated machines for particleboard cutting produce far less waste than do manual models.

Dig Jet may also add solid-wood furniture to its product lines if the Taiwan government lifts its ban on imports of needed raw materials from mainland China, says Wen.