WASHINGTON – Representatives of companies that import and distribute ready-to-assemble cabinets have spoken out against what they see as an unfair trade petition.

U.S. RTA distributors, which provide a limited selection of cabinet offerings, earlier formed the American Coalition of Cabinet Distributors (ACCD) to fight the trade action.

A group of cabinet companies had filed an anti-dumping and countervailing duty petition earlier this year against RTA cabinets being imported from China.

In March, the American Kitchen Cabinet Alliance filed an antidumping petition against China, claiming the government's "manipulation and unfair trade practices" have led to a more than 75 percent rise in Chinese imports of kitchen and bath cabinetry since 2015, creating a threat to the $9.5 billion American industry.

Speaking at the National Press Club, RTA company representatives highlighted a number of facts about the RTA segment and their own businesses, and what they call the “made-to-order” U.S. cabinet industry.

Rather than emphasizing price, these RTA distributors say they are providing a product not available from most U.S. producers – a ready-to-assemble cabinet that can be delivered in days instead of weeks.

CNC Cabinetry

Looking at lead time

Robert Hunter, COO of CNC Cabinetry in South Plainfield, New Jersey, also emphasized the shorter lead time he said RTA distributors provide.

“Every order in [the made-to-order] market segment takes weeks to lay out, plan with designers, and order,” he said. “Then manufacturing, finishing and assembly takes two to four weeks. In the end, you are waiting six to eight weeks to get your cabinets. Companies in the RTA market do not cater to the clientele that are customizing and waiting these long durations for their cabinets to be completed.”

CNC Cabinetry is a distributor of ready-to-assemble cabinets based in South Plainfield, New Jersey. The company moved to their current location in South Plainfield in 2004 to expand the operation and meet growing demand. Today, CNC Cabinetry employs 400 people and has 1,500 dealers across the country.

Hunter said the company has taken advantage of the explosive growth of house flipping. Their customer base needs to occupy apartments quickly and therefore needs cabinets in 24 to 48 hours. They could not wait the traditional six to eight week lead-times to furnish their units.

In an effort to meet this new growing market, the company started buying RTA cabinets from overseas, as CNC’s domestic suppliers could not meet demand or the requirements for quick delivery. As the business grew and the company increased his inventory with RTA cabinets imported from overseas, they were able to take the old lead time from six to eight weeks to a “next-day” delivery from RTA cabinets that he had in stock.

“CNC is working on projects and with house flippers that are looking for quality cabinets that can be purchased and installed in three to five days,” Hunter said. “Many of our customers want the convenience of RTA cabinets to take directly into the kitchen and build the cabinets on site. There are currently no companies manufacturingin the U.S. that serve this market. I know because I have reached out to them and asked them to provide these products. They have told me they don’t do this.”

Cabinet market segments

Chris Graff is executive Vice President of JSI Cabinetry, a U.S. importer of cabinets from China. JSI manufactures and distributes all-wood kitchen and bath cabinetry. JSI was founded in 1997 and has grown to employ 100 people at their headquarters in Fall River, Massachusetts, and locations in Chicago, Atlanta and Denver.

“The products sold by U.S. producers into the stock segment are generally not sold from existing inventory,” Graff said. “They are still made to order. This enables U.S. producers to offer consumers a wide range of choices, with corresponding extended lead times. Imported products, by contrast, are generally sold in ready-to-assemble form, known as RTA flat packs, and are therefore sold from existing inventory that enjoy much shorter lead times.

“Imported cabinets are typically shipped to the U.S. in the form of ready-to-assemble, or RTA, flat packs that contain all the components of a cabinet for the stock segment of the market. We then either assemble the cabinets as a service to the customer, or the customer arranges for assembly by an installer at the jobsite.

“Because of this business model, importers offer only limited options in terms of styles, colors, and finishes, while U.S. manufacturers, even in the stock segment, offer far more options. U.S. producers and importers offer a fundamentally different combination of product and service – U.S. companies are focused on offering a breadth of choices, but with longer lead times; importers offer limited choices and fast delivery

For stock cabinets, U.S. producers have lead times of weeks or months. By comparison, JSI company can deliver cabinets in as fast as one day, Graff said.

“Many U.S. producers have aging plants in which they typically finish cabinets through spraying by hand. In contrast, many Chinese cabinets are finished on an automated flatline system that produces a thicker, more durable, and more consistent finish. For this reason, the quality and consistency of the finishes for U.S.-produced cabinets is often inferior to that of imported cabinets. In addition, U.S. producers use particleboard in many of their stock cabinets, while our products are exclusively made of hardwood plywood.”

KCD kitchen cabinets.

Anti-import sentiment

Randy Goldstein, CEO of Kitchen Cabinet Distributors in Raleigh, North Carolina, was critical of the cabinet companies behind the petition.

“This petition is simply an attempt to use current political sentiment against China to eradicate a small but important market segment traditionally supplied by China, to favor the petitioners’ new foreign suppliers in other countries, and to otherwise limit consumer choice in deference to the aging business model of domestic manufacturers,” Goldstein said.

“There are cabinet companies in the United States that are struggling because they face a complex set of issues, some of which are self-inflicted and some of which are driven by direct competition from the largest, more cost-efficient manufacturers such as Masterbrand. While it may feel good to point a finger at imports and hide behind a patriotic veneer, the facts are much more complicated.” 

“One of the petitioners’ stated goals is to prevent importers from taking advantage of what they claim are unfairly dumped and subsidized cabinets. If this is truly the case, then one would expect those petitioners to confront the largest importers of wood cabinetry, a list which happens to include companies like Masterbrand and American Woodmark. But oddly, Masterbrand and American Woodmark are not part of the defense in this case. In fact, they are among the largest members of the petitioning group.

“While the petitioners may hide behind an American flag and claim to be standing up for American jobs, companies like Masterbrand and American Woodmark have relied heavily on China for a significant share of their own cabinetry products and are now moving those operations to other Southeast Asian countries, Mexico, and elsewhere. None of these jobs are actually returning to the United States.

“I’ve personally visited many factories in Southeast Asian countries and have frequently been told that the factories are not taking new customers because Masterbrand has already purchased all of their manufacturing capacity.

“I certainly have no problem with Masterbrand producing cabinets in China, Vietnam, Thailand, or anywhere else they choose. But the claim made by Masterbrand and the other petitioners that protection of American jobs is at the heart of their struggle is disingenuous. This petition is simply an attempt to use current political sentiment against China to eradicate a small but important market segment traditionally supplied by China, to favor the petitioners’ new foreign suppliers in other countries, and to otherwise limit consumer choice to conform to the aging business model of domestic manufacturers.”

Different markets

Missy O’Daniel, is president and CEO of Web-Don, Inc. in Charlotte, North Carolina. Web-Don is a distributor of RTA cabinets and surface products serving North Carolina, South Carolina and Eastern Tennessee.

“We rarely cross paths with the petitioners in this trade case who are domestic producers of cabinets making made-to-order products,” she said. “Being in the RTA business requires a big inventory investment for a company of our size. The tight timelines of our customers means we need to have a lot of product on-hand ready to be shipped out the door next-day. We continue to make this investment because we believe that we are serving a specific customer base that the petitioners in this case cannot or will not serve.”

“In the U.S. cabinet industry, a distinct, niche market has emerged of consumers who want to place orders fast and have them filled just as fast. Web-Don is working to meet the needs of those customers. We have been importing ready-to-assemble cabinets from China for about 10 years. We sell those cabinets to dealers and to remodelers who need high-quality, quick turn-around cabinets. Sometimes our customers assemble the cabinets and sometimes we assemble the cabinets for them. Our customers can get the cabinets from us right away, meaning they can have them installed in a remodeled home in under a week.

“The imported RTA sector makes up less than 10 percent of the U.S. cabinet market. We serve a specific, small group of customers who need cabinets right away. Domestic producers making cabinets with longer lead times always have, and still do, dominate the market. The success of companies like mine has done nothing to impede the growth of the larger cabinet industry and of the domestic producers.”

Fair trade laws

Matt Nicely, partner, Hughes Hubbard & Reed, representing the companies, also spoke at the event.

“The fair trade laws were simply not meant to be used to impose trade restrictions on imports that are growing their own market in the United States based on distinct, qualitative product characteristics that are unavailable from domestically sourced merchandise,” he said. “For domestic producers to suggest otherwise—while themselves importing the product—compounds scapegoating with sheer hypocrisy.”

Nicely said the cabinets and vanities these and other companies are bringing in from China are not commodity products. They serve a niche demand for RTA cabinets here in the United States that U.S. producers are not supplying, except for large U.S. producers like Masterbrand and American Woodmark that also import to meet that demand.

“The U.S. producers that import RTA cabinets manufacture all of their other product lines – assembled stock cabinets, semi-custom, custom – here in the United States,” Nicely said. “Clearly Masterbrand and Woodmark recognize that these RTA products do not compete head to head with their domestically produced product lines. They know that RTA cabinets serve a special market, in which the short lead-times of a storable, inventoried product are desired.

“The fair trade laws were simply not meant to be used to impose trade restrictions on imports that are growing their own market in the United States based on distinct, qualitative product characteristics that are unavailable from domestically sourced merchandise. For domestic producers to suggest otherwise—while themselves importing the product—compounds scapegoating with sheer hypocrisy." See http://americancabinetdistributors.org

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