Liebenow Debunks Chinese Threat
April 26, 2002
Fall River, MA (USA) - Many believed Chinese made upholstery would be a major threat to the American market, but Larry Liebenow, president of Quaker Fabrics Corp. is not convinced.
"China can''t service the U.S. from offshore because the pace of the market is too fast here. The breadth of product required to service the American upholstery market is just too large. The market is too complex. Also, delivery lead-times required in the U.S.A. are just too short.
"People thought that if the Chinese could be successful with casegoods then they could be successful with upholstery," Liebenow said. "This hasn''t been the case. It''s a very different business from case goods."
Liebenow said that American furniture manufacturers have approached him after bad experiences with Chinese suppliers. "The level of customer relationships required is way beyond what China can handle. To any degree, producing upholstery in China and selling to U.S. manufacturers is not a viable model."
On the other hand, Quaker has been selling its product into China direct to furniture manufacturers and through distributors.
"We''re concentrated in the upper end of the Chinese market, which doesn''t buy cheap product. We''re just in our third year in China, but we have established Quaker in China with reputable furniture manufacturers."
Stateside, Liebenow was one of the few American textiles executives to attend the World Economic Forum in New York in February. The gathering addressed issues related to globalization and economic development.
"I''m convinced that the future depends on aggressive development of the international market," said Liebenow, who met with the president of Poland and the prime minister of Malaysia among others. "In spite of all the anxiety and difficulty around the world, everyone understands the path for developed and underdeveloped countries is to break down trade barriers but we must have effective ways to deal with social issues that arise from this process."
Liebenow cited free trade agreement discussions in the Americas, Chile, Singapore, Australia and New Zealand and said America''s president needs to have trade promotion authority. "It is fundamental for leadership to move the globalization process forward. It is all-important that we find ways to engage trade dialogue with Europe and the Pacific region. Nafta with Canada and Mexico is very important." Liebenow said export will become the fastest growing part of Quaker''s business in the years ahead. Presently, 20 percent of Quaker''s business is export, but Liebenow sees the day when it will reach 30 percent. "You have to be involved in export when the market is difficult. This requires the education of the entire management of the company. Just because you are successful in the U.S. or Europe does not guarantee your success in export. There is a lot to be learned about changing your product and service to meet the needs of foreign markets."
Quaker has distribution centers in Mexico City and S"o Paolo. It has staff dedicated to export who are based in Mexico, Chile, Argentina, London, and Dubai.
"Europe is getting more important to Quaker as the level of our design is moving ahead of our domestic market and ahead of other European manufacturers."
Liebenow said Quaker has potential to grow its business Asia, New Zealand and the Middle East.
Quaker bought two facilities last year in Fall River. The comany is increasing its yarn, weaving and finishing operations. "By 2003, we will build in stages, 50,000-100,000 feet at a time." Quaker reported fourth quarter net sales of $90.3 million last year, an increase of 15 percent form the like period a year before. Total sales for 2001 were $331 million, a 9.3 percent increase over 2000. New orders for the fourth quarter in 2001 were up 18.5 percent versus the prior year, same period. F&FI
"China can''t service the U.S. from offshore because the pace of the market is too fast here. The breadth of product required to service the American upholstery market is just too large. The market is too complex. Also, delivery lead-times required in the U.S.A. are just too short.
"People thought that if the Chinese could be successful with casegoods then they could be successful with upholstery," Liebenow said. "This hasn''t been the case. It''s a very different business from case goods."
Liebenow said that American furniture manufacturers have approached him after bad experiences with Chinese suppliers. "The level of customer relationships required is way beyond what China can handle. To any degree, producing upholstery in China and selling to U.S. manufacturers is not a viable model."
On the other hand, Quaker has been selling its product into China direct to furniture manufacturers and through distributors.
"We''re concentrated in the upper end of the Chinese market, which doesn''t buy cheap product. We''re just in our third year in China, but we have established Quaker in China with reputable furniture manufacturers."
Stateside, Liebenow was one of the few American textiles executives to attend the World Economic Forum in New York in February. The gathering addressed issues related to globalization and economic development.
"I''m convinced that the future depends on aggressive development of the international market," said Liebenow, who met with the president of Poland and the prime minister of Malaysia among others. "In spite of all the anxiety and difficulty around the world, everyone understands the path for developed and underdeveloped countries is to break down trade barriers but we must have effective ways to deal with social issues that arise from this process."
Liebenow cited free trade agreement discussions in the Americas, Chile, Singapore, Australia and New Zealand and said America''s president needs to have trade promotion authority. "It is fundamental for leadership to move the globalization process forward. It is all-important that we find ways to engage trade dialogue with Europe and the Pacific region. Nafta with Canada and Mexico is very important." Liebenow said export will become the fastest growing part of Quaker''s business in the years ahead. Presently, 20 percent of Quaker''s business is export, but Liebenow sees the day when it will reach 30 percent. "You have to be involved in export when the market is difficult. This requires the education of the entire management of the company. Just because you are successful in the U.S. or Europe does not guarantee your success in export. There is a lot to be learned about changing your product and service to meet the needs of foreign markets."
Quaker has distribution centers in Mexico City and S"o Paolo. It has staff dedicated to export who are based in Mexico, Chile, Argentina, London, and Dubai.
"Europe is getting more important to Quaker as the level of our design is moving ahead of our domestic market and ahead of other European manufacturers."
Liebenow said Quaker has potential to grow its business Asia, New Zealand and the Middle East.
Quaker bought two facilities last year in Fall River. The comany is increasing its yarn, weaving and finishing operations. "By 2003, we will build in stages, 50,000-100,000 feet at a time." Quaker reported fourth quarter net sales of $90.3 million last year, an increase of 15 percent form the like period a year before. Total sales for 2001 were $331 million, a 9.3 percent increase over 2000. New orders for the fourth quarter in 2001 were up 18.5 percent versus the prior year, same period. F&FI
