Monday, December 29, 2008

Chinese Cabinets, the good, the bad and the ugly.

At our Montrose, Colorado sales office we have been bidding against an outfit that only sells cheap Chinese cabinets. Their price point is very low and I know we have lost a few jobs to them. At the same time, the overall construction market is very slow. Money is tight and customers are asking for a low priced product. Not wanting to lose business to the competition, I started to research carrying an import line along with how the Chinese can produce such an inexpensive product.

The good.

The import lines are styled after traditional American cabinets. Generally they are of framed construction with hardwood door and drawer fronts in the typical American species like oak, maple and hickory. Boxes are either laminated MDF or plywood. All the suppliers I looked at offer only about four color choices. Chinese cabinets are priced about 15% less for a similar quality American made cabinets and are limited in the available sizes. Hardware options are also consistent with what is available by our domestic makers, though I know they are knock offs of Blum and Salice.

As a business owner, it is hard to argue with a better product for less money. Our company, Kitchen & Bath Designs started to really consider purchasing our lower end cabinet line directly from China but then we started to see the other side of the story.

The bad.
I am writing this towards the very end of December of 2008. There has been a 13% decline in home values this year, unemployment is rising to 10% (a 26 year high), we have a negative savings rate of $7500 per person and our government has been borrowing 1/3 of all the money it spends for the last half dozen years.

The Chinese on the other hand are doing quite well at our expense. They have had a consistent 8% growth over the last twenty years with 19% last year alone. They are also the largest holder of our debt. They own our country or atleast the future economic output of our country. Cabinets and the wood industry is one of the last industries that is left from our once great manufacturing base and now it is leaving too.

Global economics may not relate to your kitchen or bathroom project or you may not care. As we searched out the pros and cons of the import cabinets, we started to see real quality issues. Number one is that the panel stock for the boxes is of the lowest quality. We have seen issues of the MDF swelling from close proximity to the dishwasher and destroying the cabinets, the plywood we are seeing warping issues. Doors, drawers and counter tops look used prior to installation, my guess is that the damage occurred from the shipping containers crossing the ocean. The finishes seem to have an orange cast caused from using cheap lacquers. Drawer slides are stamped light gauge steel and do not last very long.

The ugly.
Most of our cabinet and countertop sales occur in Colorado, occasionally we have a customer in California who buys our products or services. Currently we could not sell the Chinese import cabinets in California because of their high formaldehyde content, it would be in violation of the CARB initiative meant to improve indoor air quality. As we try to offer th greenest products avialable, the import cabinets are decidingly not green at all.

Further research lead me to this article in a recent New Yorker. http://www.newyorker.com/reporting/2008/10/06/081006fa_fact_khatchadourian
The author explores the booming Chinese wood industry. The majority of hardwoods used in the construction of cabinets is illegally logged out of the Siberian wilderness. China itself has few trees left and began to purchase its raw materials from Russian loggers about a decade ago. Please read the article if you would like to learn more about the deforestation of Siberia and the huge illegal logging industry.

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