I recently had an extended phone conversation with Howard Goldman, who owned and ran Cedar Fresh from 2003 until recently, when he sold it (yes, he’s looking for a new business opportunity). Goldman confirmed that the company does ship cedar logs to china in containers where they are made into cedar balls, cedar hangers, and the like. “We used to do all our production in the U.S.”, says Goldman, “but we couldn’t be competitive.” It’s much less expensive to manufacture in China, he says, even with shipping both ways.
I asked Goldman to estimate the difference between producing in China and the U.S. He replied that it varied significantly between items, but cedar hangers tended to be 20-30% less expensive when made in China, including shipping and customs duty.
Goldman pointed out that Cedar Fresh is one of the few (“if not the only”) cedar storage accessories companies that still does manufacturing here in the U.S., with his primary remaining U.S. facility being an adult handicapped day care center in rural Arkansas.
Finally I asked if he could reduce the cost of producing in the U.S. by using machinery to do the most labor intensive parts of the production process (such as packaging). Goldman noted that a lot of the machines he would buy are actually made in China, and a lot cheaper there. So China may be cheaper than the U.S. both for labor and for capital investment.