Editor’s pickKaiser: Writing the future of a success story

30-07-2018
Kaiser,Vietnam,Binh Duong,Southeast Asia,Success,Furniture,Story

Charles Lo, CEO of the Kaiser Group

Kaiser’s story dates back to Taiwan in the 1960s—when forestry was a proper, profitable profession then.

The Group is founded by the Lo family from Feng Yuan, who poured in hard work and demonstrated resilience. They took risks and set up the first factory in Shenzhen. In the past, China was the number one choice for a manufacturing base.

Today, Charles Lo of the second generation helms Kaiser as CEO. He has had a long and illustrious career developing the multi-million dollar business from Taiwan to China and now to Vietnam.

When America slapped anti-dumping duties on China imports, he supported the business in China and paved the way for its settlement in Vietnam concurrently. It was almost impossible to shift all export activities to the country since Vietnam back then had not opened up yet, he says.

“So what we did was produce some parts of the furniture in Shenzhen, then ship it to Vietnam for final assembly and export. In this way we were able to meet our customers’ requirements.”

The factory eventually moved to Vietnam in 2004. It is still there in My Phuoc Industrial Park in Binh Duong, 60km northwest of Ho Chi Minh City.

Kaiser Furniture in My Phuoc Industrial Park in Binh Duong hires about 6,000 workers to mass produce furniture for export to USA and Canada.

Kaiser now hires 6,000 workers to process massive orders from USA, Canada and Europe. It sources wood extensively from all over the world—North America, Malaysia, Thailand, Indonesia, Chile and Brazil—to make living, dining and bedroom furniture.

It has seven finishing lines and two "white wood" lines. It mass produces in bulk but also accepts smaller orders. It ships about 1,000 containers worldwide a month.

By the end of 2017, a second factory, with a total planned investment capacity of US$350 million, will be up and running. It is expected to employ 4,000 workers.

Kaiser also plans to acquire a local furniture player, start a design centre to give customers more value, and file for IPO on the Taipei Stock Exchange.

Recipe for success

Although much of Kaiser’s success can be attributed to hard work and strategic planning, Mr Lo claims the real reason lies in its multi-national, multi-cultural team.

“How does one excel as a leader? You need to hire good people in every department, not just in production,” he says.

Managers hail from all over the world, from the Philippines, UK, USA, Vietnam, Taiwan and China.

A proper combination of automation and labour is also important if you want to stay relevant in manufacturing, Mr Lo adds.

The company features an IT and R&D department, testing labs and an EMC testing room. Advanced CNC machinery and high-speed laser cut machines also help to ensure cutting accuracies and productivity.

There are systems are in place to facilitate resource allocation, reducing wastage and increasing profit margins.

Writing the future

Mr Lo predicts that Vietnam will replace China as the largest exporter of furniture within 10 years.

There are many reasons for this: A strong supply chain, well-developed infrastructure and government support. An economic history marked by foreign investments has also seen the local workforce earning experience, skills and loyalty in woodworking.

On the other hand, developing countries like India and Cambodia will take at least a decade to emulate Vietnam’s success.

Even Chinese companies have set their sights southwards because labour woes at home have become difficult. In addition, many of them cannot keep up with the state’s regulations on environmental emissions.

As a result of this migration, Vietnam's furniture scene will be carved into two. Taiwanese players will dominate the scene for medium- to high-end furniture; China, the low- to medium-end.

In addition, the industry will also be up against some serious competition as many of these Chinese companies have capital, influence, technology know-how and management.

But Mr Lo is unfazed by this possibility because they lack one vital lifeline–access to market.

The Taiwanese, he says, are particularly successful because they have been in Vietnam for over 20 years. The second generation that came years later also have at least 12 years of experience in running a factory.

“New developments like these shouldn’t wobble our confidence in the future,” Mr Lo stresses. “We have been here for so many years. Kaiser makes great furniture, we have a good team and we have a substantial market share in the US.”

He adds that the company has enjoyed annual growth and orders have not stopped streaming in.

To prepare the third generation for taking over Kaiser, Mr Lo’s children have started working in the company.

On a broader level, Kaiser will also tie up with Taiwanese universities to offer scholarships and internships.

Very soon, they will be ready to write the next chapter of Taiwan’s success story in furniture manufacturing.

 

This article was first published in Panels & Furniture Asia (Jul/Aug 2017)