Editor’s pick“You could say I was destined for a career in woodworking”

13-09-2017
Vietnam,Yue Fa,wooden furniture

Mr Li Tung Hui, Yue Fa Wooden JS Company


Yue Fa Wooden Joint Stock Company is now in the hands of the second generation. Managing Director Li Tung Hui runs all three factories in Vietnam and can be considered successful. But he says it was not the case when he first joined his father’s business.

Mr Li sighs and smiles when he shares that he is “destined for a career in the woodworking industry.” Growing up in Taiwan, he spent his childhood helping out in his father’s plywood factory.

“I disliked factory life, hated the smell of chemicals. It made me dizzy,” Mr Li recalls. To escape a future resigned to the four walls of warehousing and manufacturing, he studied shipping law and worked a couple of years honing his expertise in that field.

The Taiwan factory closed in 1992, only to reopen again later in the year, this time in Binh Duong province in Vietnam. It was one of the few foreign-owned companies in those days.

Five years later, the company dropped the plywood business and started manufacturing wooden components. These were supplied to other furniture manufacturers in the province, who would assemble the full product and ship to customers abroad.

In 1999, Yue Fa acquired land to build factories and over the years developed at a comfortable pace. It now manufactures a variety of living and dining furniture for export to USA, China, Taiwan and Malaysia.

Yue Fa’s expansion was not without its difficulties, however. It explored various revenue streams such as supplying semi-finished products to Vietnamese factories. (This department subsequently folded.) In 2007, it started to manufacture finished furniture products for export, which was in conflict with the customers they supplied to at that time.

But they were successful enough to build a second factory to manufacture bedroom furniture in 2012, as well as a third in 2015 to expand the dining furniture production line.

A chip off the old block

Looking back, Mr Li says coming back to his father’s business is as if his life has come round one full circle.

“My father was mostly absent during my teenage years as he was working in Vietnam. Now I’m here most of the time while my wife and children are in Taiwan.”

Working with his father now also seems to be a means to make up for the lost years, he says. However it is not always smooth sailing as there can be a lot of friction in the relationship at work as well as in their private time.

By the end of this year, Mr Li plans to move Factory 2 to a bigger piece of land about 30km away from its current premises. The extra space will be able to accommodate more products such as double decker beds and infant cribs.

By the first quarter of 2018, Mr Li wants to expand the factory’s land space to 45,000sqm. His plan is to one day be big enough to offer customers the complete bedroom furniture set.

“You cannot always depend on your past experience to boast about your success. This will make you complacent. It’s not just about copying past solutions for current problems. You must always be learning, doing better, always thinking through solutions...”

Ironically, the elder Mr Li, the pioneering entrepreneur who built his furniture empire from scratch in a backwater province in a foreign land, disapproved of the expansion idea.

“He is a bit conservative,” Mr Li remarks. “Especially since we now live in a very uncertain age. Global markets are quite unpredictable. But I think that now is the best time to go forward when everyone else is holding back investments.”

Furthermore, the problems that plagued foreign businesses still exist today, albeit in a different form. The Vietnamese furniture industry may be very mature and local labour is experienced, but cost is escalating. Mr Li says labour cost this year is likely to increase 7.5 per cent. Other issues such as tax, politics, social security insurance and competition also add to the burden of risk.

Lobbying for change

To overcome these winds of change, Mr Li invests a lot of time in training and communicating with his workers. He also demands his managers rotate jobs around the company.

“They must be challenged so they can realise their potential and identify their own weaknesses. Only then can they become better managers,” he says.

He knows all his managers and addresses all of them by name. Preparing each of them for impending change is important, but so is respect. This too, the Yue Fa management has achieved. It is all a company needs to buffer against the unpredictable future. 

 

This article was first published in the Sept/Oct issue of Panels & Furniture Asia


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