Five-year Milestone

We have just celebrated our first five years of operations here.  I just submitted an article to an industry publication with a view to getting some free publicity.  I copy it below for those of you who may have been wondering exactly what we have been doing here, but were afraid to ask.  I apologise for the self-promoting tone, but that is what publicity is.

An Australian owned and operated flooring factory in China has just celebrated five years of successful operations.  Located in the regional city of Huzhou, two hours to the west of Shanghai, Ecquality Timber Products has about 40 employees and is run by its owners, Terry Newman and Sonoe Mishima.  Terry and Sonoe, a husband-and-wife team, are well known in the timber industry, especially to the Cypress mills of Queensland, where they have been sourcing timber and flooring for about 15 years for export to Japan.

The move to China was prompted by the rising Australian dollar and increased manufacturing costs that have accompanied the mining boom.   Terry explains that initially the plan was not to set up a manufacturing operation at all; “We came to China to outsource production, not to make things ourselves, but we quickly learned that China is not a place where you can simply write a contract with a manufacturer, go home and expect things to run smoothly”.  After finding that he was spending more time on factory floors in China making things work than in Australia, Terry and Sonoe decided to move to China to start their own operation.  “We knew it would be hard, but so was running around China trying to stay on top what was happening in our sub-contract factories.  We tried many factories and none of them could consistently produce what we needed”. 

On the personal side it was a huge change too.  “We brought our daughter, about to turn 14, with us, but our 16 year old son elected to board at his school and complete his last two years there, rather start in an international school at that late stage.  For them it was no doubt a big challenge too, but they both adapted quickly to their respective new circumstances and there were no major issues”.

The challenges for the family and the business were just beginning, however, because after soon after registration of the company, but before operations commenced, Lehman Brothers collapsed and what Terry calls “the great train wreck” began.  “We just got started with things went bad.  We had enough cash to carry us through a slow year or so, but this went from slow to zero at the beginning and took about three years to get back on track, so it was nerve-wracking on top of all the other challenges of operating here”.   Terry says that there is a book in these “other challenges”, but he is now clearly on top of things and is confident of growth.    “Our challenge now is to stay on top of orders and to manage growth.  Last year was 20% up year-on-year and I expect that will now continue”. 

The factory still produces Australian Cypress for Japan, but also does other Australian hardwoods and German Oak.  “Solid German Oak wide boards to the Australian market are now one of our biggest items”, Terry explains.   “We are also supplying some engineered products from nearby factories that we work with closely.  Trading is now about 20% of our sales, but we still do all the QC”.

Terry is first to admit that times are very uncertain, but says, “There are never any guarantees in life.  You just have to get on with it and give it your very best shot”.  It is pretty clear that this hard-working couple is giving it their best shot and that it is working.   Good luck Terry and Sonoe in the next five years!