LAS VEGAS—ZYfire Hose Corp. does most of its business in the U.S. selling products made at its headquarters factory in China, but the firm is prepared to set up manufacturing in the states if tariffs become too high.
The Jiangsu, China-based firm opened a warehouse and office on a 19-acre site in Houston five years ago, and there is space available to add production lines there if needed, according to CEO Merry Zhang. She discussed the firm's plans during NAHAD's annual convention, held recently in Las Vegas.
ZYfire was founded in 2000 and operates out of a more than 1.6 million-sq.-ft. facility in Jiangsu. It employs 350 and operates about 200 production lines, focusing on fire hose, layflat hose, agriculture, mining, oil and shale gas hose. The hose diameters range from three-quarter inch to 16 inches, with the products generally having innerliners made of rubber, urethanes and some thermoplastic rubbers, Zhang said.
She was one of the founders of the hose producer, along with her brother, Rich Huang, who serves as chairman.
"Our main market is for the U.S.," Zhang said. "About 65 percent of our hose revenues are in the states."
The balance is spread across more than 60 countries and regions, including Europe, the Middle East, South America, Canada and China. She said ZYfire does very little business in its home country because customers there are looking for cheaper prices, while her firm likes to focus more on high-end hose lines.
The company has more than enough capacity at its Chinese facility, having added machinery and more extruders as its develops new products. "We forecast out five years and are prepared to meet expected demand," Zhang said.
ZYfire selected Houston as the site for its U.S. distribution facility because of its central location and because many hose distributors have locations there. "Distributors don't have to wait a long time," she said. "They will get hose in two days. We can give faster delivery and respond quicker for service needs. It's a one-stop hose shop."
Zhang said the hose producer has increased its sales in the region by 50 percent since opening the Houston warehouse. She said she splits her time evenly between Houston and China.
"Every year I visit my customers at least one time," she said. "I ask how can we improve our service and how can we develop new products."
In the U.S., ZYfire has three distributors for oil and energy markets, four for industrial hose and two for agriculture. They currently are looking for a new distributor to cover drinking water hose markets, and another for trenchless applications, a new market for the company where hose is installed underground.
Until now, ZYfire has been able to satisfy all its market needs through its Chinese manufacturing site, taking advantage of lower labor costs to supply competitively priced products, she said.
However, if the current tariff rate of 10 percent would rise to 25 percent or more, ZYfire has a plan to locate a production plant at its Houston site. She said that's why the hose maker bought so much land in Houston, to give it flexibility if needed.
Zhang said the plan would be to move machinery from the China factory, adding that the site would take no more than three months to get set up for production. She didn't say how much the relocation project would cost if needed.