An important part of WoodCrafters success is not only how the products are made, but how they are sold.
WoodCrafters, an operating division of Tan U.S. Group Inc., is based in Weslaco, Texas, and makes product lines for a single retailer.
"With our strategic alliance programs with different retailers, we offer something that the competitor next door doesn't have," Abraham Tanus, president and CEO, says. "We're competing against the direct retail competitor, but also directly against anyone who is manufacturing similar products."
WoodCrafters is selling to major retailers in the United States. The company makes proprietary brands for home centers such as Home Depot, and this is currently one of the strongest markets.
The company produces brands such as Domani Total Bath Solutions, and has introduced a furniture line called Home Office Solutions.
"With all the consolidation taking place at the retail level, when you have an opportunity to align with one retailer and to go out to the marketplace with a particular line, you become a (unique part) of the marketplace, rather than making the same product for two or three retailers, packing it in different boxes, and allowing the retailer to set a price that competes against the other retailer," says Tanus.
"If we want to sell a product category in one store, we will not sell it to anyone else that competes with that store," Tanus adds. "We offer product line exclusivity, rather than a different brand name."
Tanus thinks consumers are much more educated than they are given credit for. "If we do this (offer the same product to different retailers in different brands), we are deceiving ourselves as manufacturers and doing a disservice to the market when we go out there and sell the exact same product to Wal-Mart, Costco and Target, with different brands. Eventually the consumer realizes you're not really offering anything different. It's the same product across the board with different labels," he says.
"We've chosen to do alliances where product lines are sold through different markets. When we (enter) a market and give them exclusivity, we're truly competing against both the retailer across the street and any other manufacturer that is doing a similar product."
The retailer is able to offer an exclusive product, Tanus says. "If you're going to sell at retail, you're going to set a value, and if you have a better product, you're going to attract the consumers, and that's the philosophy of WoodCrafters and how we go to market."
Why were sales up in 2005? "It's all about planning and execution," says Tanus. "It is a very controlled growth that has been forecast in our projections for the last three years. It's a very sustained growth."
In 2004, the company reached $85 million in sales, and then $110 million in 2005. This year, sales are expected to grow by a similar amount. In the FDM 300, Tan U.S. Group was listed as manufacturing bathroom cabinets, cultured marble tops, storage and furniture. The company reported 1,150 total employees.
WoodCrafters has made large investments in equipment and plant spending in 2006 totaling almost $20 million. In 2007 the company is planning additional investment, but not as large as this year.
"We did a lot in 2006, and it's going to be a little less for 2007," Tanus says. "Our expansion continues because we still have very aggressive goals."
Tanus sees developing a budget and projections for the next five years as a major challenge. Expansion will help serve a larger portion of the market in the same categories that they now serve.
Importing and processing
Tanus says the company's manufacturing strategy is built around vertical integration. Components such as drawer fronts, RTF doors, MDF components and some finished small cabinets are manufactured in one of four company-owned plants in Mexico. Most of the panel processing, along with assembly and distribution, are done in the plant in Weslaco, Texas.
Tanus is optimistic about the overall market. "We can go in either direction," he says. "We can go into new construction or into remodeling. Our outlook is very positive. We're in a very aggressive growth mode." s
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