An 80-year-old, Fort Lee-based Couristan Inc. entered into a joint venture with China's largest carpet manufacturer, by building a 1-million-square-foot plant in Shangdong Province, on the country's east coast to make carpets more competitive in the global market.
Chinese venture with partner, Haima Group Corp., gives Couristan Inc., a low-wage new plant, on the North Korean border which will hold about 100 machines and employ about 2,000 people.
Couristan one of the largest carpet importers, will be closing its Irish facility and a plant near Manchester, England and will be moving machines from both the places to China.
European competitors are also increasingly making carpets in China, India, Singapore and Thailand as the wages in Western Europe is high and can't compete with competitors who are manufacturing in lower-cost countries in the Far East.
American carpet workers earn upward of US $2,000 a month, but in Poland they are paid $520 whereas in China its only $130.
A few carpet makers have set up their own plants in Georgia because carpet is expensive to transport and China's intellectual property laws are very weak that US manufacturers worry their designs will be stolen.
In addition, most carpets sold in the US are made through 'tufting', a fairly simple, highly mechanized manufacturing process that uses little labor.
Tufted carpeting made in Georgia is comparatively inexpensive that China wouldn't be competitive.
Woven carpet on the other hand requires higher skilled labor that makes China's low-wage labor an attractive proposition and also Chinese production standards have improved significantly in recent years.
By collaborating with Couristan, Haima Group has gained foreign investment, benefits from working with skilled technicians the quality has improved which has helped to boost exports that now account for about 30 percent of the company's $150 million in revenue.
marketing@alchempro.com
