3 Miss. furniture firms helped by trade zone OK

Published 12:50 am Thursday, January 1, 2009

Three furniture businesses in northeast Mississippi are now part of a Foreign-Trade Zone manufacturing authority, the U.S. Department of Commerce said Tuesday.

The designation enables manufacturers that import raw materials or export finished goods to save hundreds of thousands of dollars in duties and processing fees.

Officials with Lane Furniture, H.M. Richards and Bauhaus USA said the approval will help save about 950 cut-and-sew jobs in Lee County and will reduce the raw goods cost of each company by over $1 million annually.

Sign up for our daily email newsletter

Get the latest news sent to your inbox

Al Wiygul, president of Bauhaus USA, said the companies wanted the chance to show they can still be competitive. “With a little help from the economy, I see us adding cut-and-sew jobs back to our work force in the near future,” he said.

One benefit of the designation is that businesses operating inside the zone don’t pay taxes on imported materials and exported finished products. The idea is to help companies compete against foreign manufacturers.

U.S. Rep. Travis Childers, D-Miss., who was joined by other local and state officials at Tuesday’s announcement, said the zone approval “represents an important and necessary commitment to Lee County and North Mississippi jobs.”

“The precedent that this approval sets for the U.S. furniture industry is especially beneficial for North Mississippi’s hard-working families during today’s difficult economic times,” Childers said.

The program was started in 1934.

The scope of manufacturing authority is limited to micro-denier suede fabrics that are not produced in the U.S. Each company imports micro-suede upholstery in rolls and pays customs rates from 7.2 percent to 17.2 percent.

Many U.S. upholstery manufacturers import prefabricated cut-and-sewn kits, which are made in the Far East, at a “free” duty rate.

Officials said the three furniture companies will be able to use rolled micro-suede to produce upholstery covers and finished upholstered furniture that may enter U.S. commerce at the same “free” rate of duty that applies to foreign-sourced prefabricated upholstery kits.

Lee County Board of Supervisors applied for the designation in October 2003, with over 40 furniture companies throughout North Mississippi invited to participate.

Lane, H.M. Richards, and Bauhaus USA were the only companies that chose to formally submit applications, officials said.

Skipper Holliman, president of Lane Furniture Industries, said the savings “will improve our competitive position and our ability to maintain and create furniture manufacturing jobs here in North Mississippi.”