Chilean furniture makers eye U.S. market.

Major U.S. retail chains, including J.C. Penney and Pier 1, are among major retailers participating in Chile's increased effort to spur furniture exports to the United States, Europe and Latin America.

At 68 percent, or roughly $18.7 million, North America, the United States, is Chile's primary export market for wooden furniture. RTA furniture, made with locally grown radiata pine, is the chief product type, said Jenny Renis, head of the Furniture and Household Goods Division for ProChile. ProChile is part of the Ministry of Foreign Affairs, Export Promotion Bureau.

According to Renis, it wasn't until the mid 1980s that the Chilean wooden furniture industry began a concentrated effort to penetrate foreign markets. Export sales totaled $500,000 in 1985, before rising 386 percent in 1986, and another 290 percent in 1987. Between 1988 and 1992, sales rose 362 percent, to $26.2 million. Chilean wood furniture exports for January to August were $27.5 million.

Show highlights export possibilities

Export opportunities were on the mind of many interviewed by WOOD & WOOD PRODUCTS at the third annual Salon del Mueble furniture fair, held Dec. 15-19 in Santiago, Chile. The show was organized by Masisa, the largest Chilean particle-board supplier. Sponsors included ProChile and ASIMAD (Asociacion de Industriales de la Madera), the Chilean furniture association.

Of the more than 90 companies exhibiting, close to half were furniture companies, many of whom either currently export to North America or plan to in the future. Suppliers at the show included representatives of Grass, Blum, Homag, Wilsonart, H.B. Fuller, Knape & Vogt, Casadei, Rehau, Black & Decker and Intek. Wood & Wood Products was the only U.S.-based magazine at the show.

NAFTA's impact

Companies interviewed at Salon del Mueble expressed positive thoughts as to whether the North American Free Trade Agreement will make it easier to penetrate the North American market.

"We want to export to the U.S. because it is a big market, with a range of quality and pricing availability," said Edgardo Mendel, sales manager for Delher, a low- to mid-price kitchen cabinet company. According to Mendel, Delher hopes to penetrate the U.S. market through its parent company, which is located in Mexico City, Mexico. "We hope to buy the Masisa particleboard here and do most of the manufacturing in Chile, then ship to Mexico for some final assembly work. We would then export to the U.S. under NAFTA," Mendel said.

Although currently selling to the United States, Industrias Fourcade general manager Miguel Lopatin said NAFTA might help the company enter the Mexican market. The company exported 750,000 units of RTA furniture last year. Approximately 80 percent of its business is to the United States and Canada. 1993 export sales to these markets was $2 million.

The prevailing wish among most exporting companies is for a similar agreement to occur between Chile and North America, said Alvaro Allegis, commercial manager for CIC, one of the largest Chilean furniture export companies. CIC currently exports approximately $5 million, or 85 percent of its product, to the United States. Other markets for CIC include Canada, Spain, France, Germany, Belgium, Japan and South America.

A free trade agreement between Chile and North America would greatly benefit Muebles Andes S.A., said general manager Luis Gostin Bernabe. Until then, the company will continue exporting 100 percent of its solid radiata pine furniture to the United States, Bernabe added.

Desmo Industrias Ltda. also is banking on an eventual free trade agreement between North America and Chile. "We are preparing a set of productions, mainly bath vanities, for the U.S. market," said general manager Harry Abrahams. The company plans to market its product through U.S.-based distributors within the next two years.

Adding more value to the product

To attract the North American market, Chilean companies are offering products with "more added value, such as better finishes and design. They're not just sticking to products for the low- to mid-price range," said Ramiro Gutierrez, also of ProChile.

"What you see for the United States is more the modern style. For products marketed in Chile, you see a 50-50 split between contemporary and classic. Although most of the furniture is made from pine and eucalyptus, the (stains) colors still preferred seem to be the oaks, cherry and walnut," added Sergio Goitia Llull, president of ASIMAD.

This viewpoint was borne out of Salon del Mueble. Dave Embry, director of design for Ralph Wilson Plastics Co., said he found much of the Chilean furniture exported to the United States is indistinguishable from domestic American furniture. "Chilean designers still exhibit a tendency for a lot of copying. The species are really the only difference," he said.

Regarding painted finishes, "They also show a lot more of a whitewash/opaque tinting than you'd normally see in U.S.," Embry added. In laminates, white is very popular, followed closely by gray and almond.