Outdoor chaise lounges

	This patio set from Ningbo Top Green combines plastic rattan with nyatoh wood. Aluminum is used for the frame.

While large players welcomed the tax rebate modification, their small counterparts did not find the revised policy as advantageous.

The latest round of tax rebates in June this year received varied reactions from China’s outdoor furniture suppliers.

Rising to 15 percent or only 2 points short of the full 17 percent VAT, the refund aimed to stimulate business amid the global economic slowdown. Not all makers, however, benefited from the adjustment.

Small companies, which are currently getting only minimal export orders, expressed that they did not gain more profit from the tax rebate modification. This is because in order to secure better deals from material providers, most of them are not requiring an invoice for their purchase. In doing so, they lose the official receipts needed to prove the amount of tax paid. As a result, they can only receive little or no VAT refund.

Many small suppliers also find the application for tax rebates cumbersome. After submitting the required documents, makers need to wait for six months to get the reimbursement. For them, this processing time is quite long, especially since their financial structures require fast monetary turnover.

Most midsize and large enterprises, meanwhile, welcomed the revised policy. At such companies, higher exports easily translate to bigger rebates.

Samson, the third-leading furniture manufacturer in the world, for instance, can receive about $10 million annual refund. The supplier has established two new factories in China.

The benefit of the tax rebate increase, however, is expected to be short-term. Makers expressed that buyers would sooner or later demand lower prices as a result of this policy, requiring them to cut their profits.

Most of the latest outdoor furniture from China come in wicker. The output of cast- and wrought-iron designs has decreased due to waning demand for more expensive products. In the low-end segment, some suppliers also offer models made of specialty fabric such as Textilene.

Instead of natural rattan, wicker outdoor furniture pieces are generally constructed from PE and PU strips.

Some companies also employ recycled plastic or virgin vinyl. The polymers undergo various treatments to yield grain similar to that of wood canes.

Compared with natural rattan, plastic strips are said to be more durable because they do not encourage mildew growth, or crack and peel after getting soaked in the rain. As a result, models preserve their shape and color over a long period even with frequent cleaning. To protect the furniture further, makers apply anti-UV and flame-retardant finishes.

Aluminum is the top choice for frames, as it is lightweight but sturdy. The tubes, usually cured in anti-corrosive glaze, are covered with bamboo veneer or lacquered with honey- or mocha-colored paint to match the natural feel of rattan.

Some makers also utilize regular steel for low-end designs, and wood and stainless steel for upscale models.

The materials used greatly influence prices. Upscale plastic rattan is at least 100 percent costlier than low-end versions but lasts for up to five years, which is significantly longer than the maximum life span of the latter. Moreover, expensive PE strips are said to be more health-friendly as these do not contain toxic ingredients such as cadmium.

A low-end set of four wicker chairs and a table is priced at $140 to $200. Models generally adopt steel frames and plastic rattan that lasts for one to two years.

Midrange versions go for $210 to $250. These have 1.2mm-thick aluminum or steel tubes, and UV- and fire-resistant PE or PU rattan with a life span of two to four years.

Upscale designs, which can reach $350, use 1.2 to 1.5mm-thick aluminum tubes, and UV- and fire-resistant PE or PU rattan lasting for five years.

Apart from the materials, the weaving method and product design influence the price. Low-end models have basic patterns and shapes. Upscale releases, on the other hand, feature complex weaves and innovative forms.

The majority of China-made outdoor furniture pieces come in contemporary styles, making them suitable also for interior display.

New models boast streamlined yet fluid forms, achieved by using more curves instead of angles. Examples are 3D round and oval chairs, which are hollowed out to create a sleeker contour.

Riding the trend for space-saving furniture, many companies have released stackable and KD pieces. Such designs also allow manufacturers to save on packaging and shipping costs.

Aside from streamlining the product form, several companies are breaking the traditional theme

by utilizing contrasting elements such as animal-print cushions against dark-colored club chairs and sofas. Some are also incorporating mesh side panels to tone down the formal ambience of opulent dining pieces.

For ergonomics, makers are enlarging the cushion area, allotting 25mm space for foam thickness. The distance between the armrest and the seat is also calculated. Optimally, the gap should be 200mm. More makers are also adopting concave instead of flat backrests.

China has about 300 suppliers of outdoor furniture. The number is a decrease of 5 percent from the previous year, due to the global economic crisis.

About 60 percent of those that remain in the industry are small privately owned local companies. These employ 100 to 200 people and generate $200,000 to $1 million each year.

Midsize makers, with annual revenue of up to $10 million, constitute 30 percent. Most of these are locally owned, although some have Taiwan or Hong Kong investment. Their labor force reaches 500 people.

The rest are large players, several of which are backed by US financiers. They usually generate between $10 million and $50 million in sales each year, and have 1,000 to 2,000 workers. A few are very big corporations with a labor force of 5,000. Annual revenue may reach $300 million.

Irrespective of size, makers are mostly OEM-driven. Small and medium-scale suppliers typically have two to 25 specialists for product development, which involves mainly countersampling. About 10 designs are released each year.

Large players can have an R&D team with 100 members. Most develop an average of 200 pieces each year. Top-tier companies create up to 1,000.

Small and medium-scale enterprises offer mainly low-end and midrange outdoor furniture. Less costly components with shorter life span are usually adopted.

Large suppliers, meanwhile, concentrate on upscale production, often employing higher quality materials. They typically have separate facilities for various components or processes. During the peak season, however, some also outsource from their less busy counterparts.

While most small and midsize suppliers have their own factories, many subcontract painting and powder coating to local specialists.

With more than 10 years of industry experience, Guangdong province is China’s largest sourcing center for outdoor furniture. The hub has about 200 mostly small and midsize companies that benefit from a rich local supply of skilled labor and materials.

Targeting the midrange and high-end, makers in Guangdong generally have the experience and capability to develop their own designs. Many can create prototypes from buyers’ concepts and are adept in releasing models that require complex cutting and finishing techniques.

Foshan is the province’s main production base. In fact, large international manufacturers such as Agio have set up factories there. The city is home to some of the country’s major PE and PVC providers.