Furniture manufacturers whose upholstered items require foam are being hit by a triple whammy, according to the Associated Press.
For starters, one of the four leading chemical companies supplying two major chemical ingredients used to make foam – polyol and TDI (toluene diisocyanate) – decided to exit the business. Lyondell Chemical, Houston, ceased production at its Lake Charles, La., plant because TDI profits constituted a small percentage of its total revenue stream.
Foam producers dealing with tighter supplies of needed chemicals were also hit hard by hurricanes Katrina and Rita. They drew a bull’s-eye on the cradle of U.S. chemical plants that stretches from Galveston, Texas, to New Orleans.
The sting of skyrocketing foam prices, supply delays and rising transportation costs comes as American furniture manufacturers are battling competition from Chinese and other Asian imports.
“It makes for a tough equation,” says Stuart Curtis, director of operations at Best Home Furnishings in Ferdinand, Ind.
The situation has impacted several industries, including the recreational vehicle sector which relies on the foam for several furniture components.
Rob Elliott, president/CEO of Foamcraft, headquartered in Indianapolis, said the RV industry has experienced major foam delivery delays.
Curtis says a number of foam suppliers have had difficulty keeping up with deliveries.
“Some suppliers have instituted 50% allocations and have turned away new customers,” Curtis said. “In the residential upholstery business, there are other competitors who have been unable to continue to deliver on time – but those are not local companies.”
The demands placed on foam pouring and cut-to-size plants were growing even before the Federal Emergency Management Agency ordered 125,000 travel trailers and mobile homes to house Hurricane Katrina victims.
“It’s been just a very wild October,” said Elliott, who guessed that foam prices took 65% to 70% percent jumps twice last month.
Hurricane-related shortage issues will be felt through year’s end, Elliott estimated.