Several days ago, Shenzhen Huaren Industrial Co., Ltd (the parent company of Baland mattress) had a notice in their factory gate, claiming that due to the recession of real estate industry in China, many furniture companies in China is hard to survive, Huaren had to close down the factory in Shenzhen because of the continued loss. Now this famous Shenzhen furniture factory close the door and there is no worker inside. Some workers outside the door are still waiting for their salary, and they haven’t been paid for several months because of the loss.
Huaren is not the first closed down famous furniture manufacturer in Shenzhen, actually there were two famous furniture factories had negative news in the past 2 months, one is Shenzhen Huayuanxuan Furniture Co., Ltd (Housen Furniture), this company have a great development in recent years, it is famous in MDF furniture and tries to get IPO twice, unfortunately they failed, and now Huayuanxuan furniture has applied for bankruptcy protection because VC (venture capital) leave their funds. Some furniture workers of this company have not get their salary for months, they stop working and start a march to ask for payment. Another furniture enterprise is Shenzhen Fuzhidao Furniture Co., Ltd, this company had closed down in June 2014, all workers and officers had not been paid since last December, the total unpaid salary amount had reached to two million US dollars. Shenzhen local government are trying to solve this big problems now.
HongYuan Jiang (Mr.), CEO of Zhejiang Province Furniture Association, said that there are also some China furniture companies had increased their furniture product sales by 30% ~ 40% during the last year, the real reason of this famous enterprises’ problems are bad management of funds, this entrepreneurs do not focus on furniture only when their furniture companies grow bigger, they are trying to invest in other industries such as the real estate, this is not they are good at and it is dangerous, most would failed in it. Another reason is that they are trying to do all kinds of furniture when the scale and brand has formed certain degree, but it is hard to make all kinds of furniture and make them well, so they have a lot of furniture stocks that can not be sold, then no money to maintain it.
Shenzhen furniture industry has a high speed development in the past 30 years, there were 2,500 furniture companies and 150,000 relative employees in 2001, annual output value 15 billion U.S dollars. In 2012, there were 2,500 furniture companies in Shenzhen and annual output value 260 billion U.S dollars. Shenzhen has been the furniture R & D center since the year 2010, it is the top of China in furniture industry scale, furniture design, skilled furniture people, furniture technical, furniture equipment and furniture export value, soft furniture and MDF furniture is what Shenzhen furniture famous for, but this situation has been worse since 2008, some furniture manufacturers in other areas of China has challenge it this years, and they finally make it, especially in Si’Chuan Province and Zhejiang Province of China. “Made in Shenzhen” does not have much influences now.
The cost of furniture production is also a great factor. Labor cost in Shenzhen has increased a lot in recent years, and it is also the top 3 of all cities in China. The price of raw materials such as wood board, stainless steel, paint, is always keeping up this years, the price of Guangdong furniture has increased about 10% in whole, many furniture manufacturer have lower advantage in international market. What should they do? We will keep updating.