E7-15169. Foreign-Trade Zone 158 - Vicksburg/Jackson, MS, Request for Manufacturing Authority, Bauhaus USA, Inc., (Upholstered Furniture)

An application has been submitted to the Foreign-Trade Zones Board (the Board) by Greater Mississippi Foreign-Trade Zone, Inc., grantee of FTZ 158, pursuant to Section 400.28(a)(2) of the Board's regulations (15 CFR Part 400), requesting authority on behalf of Bauhaus USA, Inc. (Bauhaus) (a subsidiary of La-Z-Boy, Inc.), to manufacture upholstered furniture and related parts under FTZ procedures within FTZ 158. It was formally filed on July 26, 2007.

The Bauhaus facility (216 employees) is located at One Bauhaus Drive within the Turner Industrial Park (Site 16) in Saltillo, Mississippi. The facility is used to produce upholstered furniture (up to 200,000 sofas, chairs, and recliners annually) and cut-and-sewn upholstery covers for the U.S. market and export. The application proposes that Bauhaus would utilize foreign-origin “micro-denier suede” fabric to be cut and sewn into furniture upholstery covers under FTZ procedures. The finished upholstery covers (HTSUS 9401.90; duty free) would then be assembled into finished chairs, seats, sofas, and recliners manufactured by Bauhaus at its Mississippi facility.

The proposed scope of authority under FTZ procedures would only involve duty savings on foreign-origin, micro-denier suede fabrics (classified under HTSUS Headings 5407, 5512, 5515, 5516, 5903, 5906, 6001, 6005, 6006; duty rate range: 2.7 17.2%%) finished with a caustic soda wash process, which the applicant indicates are not produced by U.S. mills. The application indicates that Bauhaus does not seek FTZ benefits on any of the other foreign fabrics used in production at the facility (i.e., full duties would be paid on all such fabrics). All other material inputs used in production would be domestic-status.

FTZ procedures would exempt Bauhaus from customs duty payments on the foreign micro-denier suede fabric used in export production. On micro-denier suede fabric used in production for the U.S. market, the company could elect the finished upholstery cover (i.e., furniture part) duty rate (free) after the fabric has been cut, sewn, and formed into upholstery covers, at which time they are entered for consumption from the zone. Bauhaus would also have the option to elect the finished furniture duty rate (free) for the subject fabric when the finished furniture is entered for domestic consumption. The application indicates that the savings from FTZ procedures will help improve the facility's international competitiveness.

Public comment is invited from interested parties. Submissions (original and 3 copies) shall be addressed to the Board's Executive Secretary at the following address: Office of the Executive Secretary, Room 2111, U.S. Department of Commerce, 1401 Constitution Avenue, NW, Washington, DC 20230-0002. The closing period for receipt of comments is October 2, 2007. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to October 17, 2007.

A copy of the application will be available for public inspection at each of the following locations: U.S. Department of Commerce Export Assistance Center, Suite 255, 175 East Capitol Street, Jackson, Mississippi 39201; and, at the Office of the Foreign-Trade Zones Board's Executive Secretary at the address listed above. For further information, contact Pierre Duy, examiner, at: [e-mail], or [phone].

Dated: July 27, 2007.

Andrew McGilvray,

Executive Secretary.