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Senator Pressler. Thank you. 

 Mr. Perdue. 



STATEMENT OF DON PERDUE, PRESIDENT, PERDUES, INC., RAPID 



CITY, SD 



Mr. Perdue. Thank you for the opportunity to speak before the 

 Senate Small Business Committee. 



Perdue, Incorporated, manufactures promotional bedroom furni- 

 ture, which we sell throughout the continental United States. Also, 

 we export to Canada, Mexico, and Puerto Rico. The business was 

 started in Montana in 1970. The plant was added in Kentucky. In 

 1987, we moved to South Dakota. At that time we had 3 million 

 dollars in gross sales with about 50 employees. We have grown to 

 $25 million in sales and we have approximately 220 employees with 

 a payroll of $5.4 million. We are an in-user of this forest product 

 that everyone has been taking about. Our delivered price is one of 

 the lowest in the Nation for furniture of this quality. And by 

 design, we have one of the highest labor costs. Our employees aver- 

 age $10 per hour plus fringe benefits, including health insurance. I 

 mention this because of a corporation desire and obligation to our 

 employees to supply them a living wage so they can be independent 

 in their lifestyle. 



We are constantly working to obtain the lowest possible price for 

 raw materials, i.e., particleboard, that is available in the private 

 competitive market. During the time I have been in business, the 

 price and availability of raw materials has been reasonably stable 

 within the normal functions of inflation and market pressures. 

 Since August 1992, the price of particleboard has increased from 

 $175 per thousand to $250 per thousand, approximately a 43 per- 

 cent increase, which is predictable when large quantities of timber 

 are taken from the market. This forces our need to raise prices. Let 

 us not forget that a price increase from a manufacturer is a dou- 

 bling factor to the consumer. 



We purchase material from mills throughout the United States, 

 and our consumption last year was 15 million board feet. In addi- 

 tion to the price increase, we have also experienced shortages. 

 Early this summer we were forced to close our plant and send our 

 employees home for a week, because we were unable to secure 

 board. Raw material at this time has become somewhat more avail- 

 able due to the softness in the economy as a result of the conduct 

 of the Clinton Administration. However, I am cautioned by the 

 mills that their raw materials are scarce and that I could be put on 

 an allotment or a rationing basis at any time. 



The furniture industry is very competitive, and I cannot compete 

 with manufacturers from countries with reasonable environmental 

 concerns if ours become unreasonable. The people who are opposed 

 to multiple use tell us that jobs lost in the timber industry will be 

 replaced by employment in tourism. I would hope that if the time 

 comes when I will have to close the doors because of a lack of raw 

 materials that one of these people will be available to explain the 

 advantages of a minimum-wage job to the employees of Perdue 

 Woodworks. 



Thank you. 



