Here's an update on the anti-dumping action against Chinese engineered flooring, posted today, November 15, 2010.
Follow this link: http://ia.ita.doc.gov/download/factsheets/factsheet-prc-mlwf-init-20101112.pdf
Monday, November 15, 2010
Saturday, November 13, 2010
Still Mired in the Sludge of the 2010 Economy
Time is getting away from me again! But maybe it's because my life is full. Full of mostly great things. The family is doing well. One son about to graduate from film school with his Masters degree, another recently engaged to be married to a great young woman whom his mother and I really like. How good is that!
The high-end wood flooring business remains mired in the sludge of the 2010 economy. Meanwhile, I've been thinking about and looking around, sort of, for a fresh banking relationship. The prospective new bankers ask me the oddest questions now (not like the old days, when a decent credit score and a signature delivered the keys to the kingdom!). These bankers want to know what industry we're in! When they discover we're in the building industry, the light goes out of their eyes. I never thought I would encounter a banker with an "industry filter" in place.
But, it's okay. We don't really need a banker anyway. And I'll confess I'm bemused by the situation in banking nowadays. The Obama administration's Treasury department is shoveling liquidity into the economy, with plaintive statements about funding small businesses to get some job growth. But who do they shovel the funding to? They shovel it to the collection of entities that expressly will not fund small businesses...the banks!
If you ask a banker about this, he will protest loudly that his bank wants to lend. Just not to you.
Is anyone following the current sleeper activity in Washington, DC about indicting Chinese engineered wood flooring manufacturers and importers with dumping product into the U.S. at below cost, or with Chinese government subsidies? Yes, this is happening right now. And while Plantation has no Chinese products, it potentially affects us, and everybody in our business, one way or another.
Most people I speak with in this business are simply unaware of this potentially major disruptive influence on our business. The bigger boys in the wood flooring business (Armstrong, Anderson, Nydree, etc.) have filed an anti-dumping complaint with the FTC. My understanding is that the complaint has been accepted, is being validated, and a decision as to whether to investigate formally is due very soon, as in early December.
The potential here is that Chinese wood flooring imports may soon be dutied at levels that bring their costing way, way up! This of course, would be bad news for the general American consumer, who has been trained to believe that wood flooring is always cheap, really cheap. But it would be absolutely devastating news for importers and companies who are completely dependent on imported Chinese flooring at rock bottom pricing (can you say, Lumber Liquidators?).
The additional interesting news is that, if I have this right, any duties eventually levied will be retroactive to the formal investigation date. Think about that. The Feds may eventually decide on a duty rate, say, eighteen months from now, and announce it at that time. All imports since December, 2010 would be levied at that rate! That means all importers would owe the government massive amounts of money, covering their imports from the retroactive date.
Another complication: if the Feds decide to formalize this action, importers will be required to post a bond that guarantees they will pay whatever duties they owe, in whatever amount they owe, which they don't know and cannot know. Try writing and pricing that bond.
For a businessman, all this presents a big-time problem. What to do? Nothing? Everything?
I may be overthinking this subject, but I see this as a potential sea change in the wood flooring business. The NWFA has all the info. Plus, if you care to pursue it, there is a website link: http://www.usfloorparity.org/ Stay tuned.
Oh, by the way. We have an FSC-certified manufacturing facility with a California, USA address. Anybody need some local manufacturing to defend your brand while the Feds take their sweet time ruining your business, and while you're busy visiting new flooring mills in Vietnam? We'll be happy to take your call.
While we're waiting for the flood of calls from importers needing contract manufacturing, we'll be pursuing our newest initiative: custom finishing. The idea itself isn't new... but it is new to us. We have exceptional finishing capability and know-how, and have been using those assets in our own branded products. Now, we're willing to spread the wealth, and the orders are starting to flow in. We have perhaps the only flat line UV roll coat finishing machine "for hire" on the U.S. West Coast. Our finishing machine is set up in such a way that we can and will do short-runs, meaning low or no-minimum lots. This is important, since it means we will take your 2000sf order at a reasonable price, rather than insisting on a minimum 20,000sf order just to flip the switch.
At Plantation, there are several other initiatives too - ranging from a new specialty product utilizing some amazing technology, to new pathways to reaching and informing customers about the joys of customized wood flooring. More, later.
The high-end wood flooring business remains mired in the sludge of the 2010 economy. Meanwhile, I've been thinking about and looking around, sort of, for a fresh banking relationship. The prospective new bankers ask me the oddest questions now (not like the old days, when a decent credit score and a signature delivered the keys to the kingdom!). These bankers want to know what industry we're in! When they discover we're in the building industry, the light goes out of their eyes. I never thought I would encounter a banker with an "industry filter" in place.
But, it's okay. We don't really need a banker anyway. And I'll confess I'm bemused by the situation in banking nowadays. The Obama administration's Treasury department is shoveling liquidity into the economy, with plaintive statements about funding small businesses to get some job growth. But who do they shovel the funding to? They shovel it to the collection of entities that expressly will not fund small businesses...the banks!
If you ask a banker about this, he will protest loudly that his bank wants to lend. Just not to you.
Is anyone following the current sleeper activity in Washington, DC about indicting Chinese engineered wood flooring manufacturers and importers with dumping product into the U.S. at below cost, or with Chinese government subsidies? Yes, this is happening right now. And while Plantation has no Chinese products, it potentially affects us, and everybody in our business, one way or another.
Most people I speak with in this business are simply unaware of this potentially major disruptive influence on our business. The bigger boys in the wood flooring business (Armstrong, Anderson, Nydree, etc.) have filed an anti-dumping complaint with the FTC. My understanding is that the complaint has been accepted, is being validated, and a decision as to whether to investigate formally is due very soon, as in early December.
The potential here is that Chinese wood flooring imports may soon be dutied at levels that bring their costing way, way up! This of course, would be bad news for the general American consumer, who has been trained to believe that wood flooring is always cheap, really cheap. But it would be absolutely devastating news for importers and companies who are completely dependent on imported Chinese flooring at rock bottom pricing (can you say, Lumber Liquidators?).
The additional interesting news is that, if I have this right, any duties eventually levied will be retroactive to the formal investigation date. Think about that. The Feds may eventually decide on a duty rate, say, eighteen months from now, and announce it at that time. All imports since December, 2010 would be levied at that rate! That means all importers would owe the government massive amounts of money, covering their imports from the retroactive date.
Another complication: if the Feds decide to formalize this action, importers will be required to post a bond that guarantees they will pay whatever duties they owe, in whatever amount they owe, which they don't know and cannot know. Try writing and pricing that bond.
For a businessman, all this presents a big-time problem. What to do? Nothing? Everything?
I may be overthinking this subject, but I see this as a potential sea change in the wood flooring business. The NWFA has all the info. Plus, if you care to pursue it, there is a website link: http://www.usfloorparity.org/ Stay tuned.
Oh, by the way. We have an FSC-certified manufacturing facility with a California, USA address. Anybody need some local manufacturing to defend your brand while the Feds take their sweet time ruining your business, and while you're busy visiting new flooring mills in Vietnam? We'll be happy to take your call.
While we're waiting for the flood of calls from importers needing contract manufacturing, we'll be pursuing our newest initiative: custom finishing. The idea itself isn't new... but it is new to us. We have exceptional finishing capability and know-how, and have been using those assets in our own branded products. Now, we're willing to spread the wealth, and the orders are starting to flow in. We have perhaps the only flat line UV roll coat finishing machine "for hire" on the U.S. West Coast. Our finishing machine is set up in such a way that we can and will do short-runs, meaning low or no-minimum lots. This is important, since it means we will take your 2000sf order at a reasonable price, rather than insisting on a minimum 20,000sf order just to flip the switch.
At Plantation, there are several other initiatives too - ranging from a new specialty product utilizing some amazing technology, to new pathways to reaching and informing customers about the joys of customized wood flooring. More, later.
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