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A-America to have 50% stake in Vietnam plant

By Thomas Russell
Publication: Furniture Today
Date: Monday, September 20 2004

Seattle— Case goods importer A-America will have about 50% ownership in a new plant being built near Ho Chi Minh City, Vietnam.

The company has sourced case goods from Vietnam for more than two years, and now buys from two plants there.

President Fred Rohrbach said the move to help develop the new factory and take an ownership stake isn't in response to preliminary U.S. duties imposed on Chinese-made bedrooms.

"This has no bearing on what happened in China," he said. "I just see Vietnam as a tremendous opportunity because it has a large skilled labor force with a good work ethic. It makes sense as an alternative to China."

He said Vietnam also has improved its infrastructure and attracted major shipping lines.

Rohrbach declined to say how much A-America is investing in the plant or how much it will cost.

He also declined to identify the investment partners, other than to say they are Asian.

The plant, 25 miles north of Ho Chi Minh City, is expected to begin production in early 2005. It would employ between 800 and 1,000 workers in the first phase, and could employ as many as 1,700 after a second phase of construction.

It would produce about 100 to 150 containers of furniture a month after the first phase and more after the second.

The plant will make solid-wood dining and bedroom furniture at medium price points, made from imported species such as oak, alder, pine and ash.

It will have dry kiln facilities to control moisture content.

Finishing likely will be done by two suppliers, Deh-Fuh in HCMC and Akzo Nobel.

Rohrbach said the facility will supply "new items" and won't supplant other sourcing from Vietnam or elsewhere in Asia.

"With the volume of business that A-America does, this factory could not supply everything we need," he said. "We still have to buy from other countries throughout the world."

However, with the new plant, the ownership stake will give the company more control over the process and quality.

A-America will have about four quality control staff in the plant.

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