Adam Hofmann has spent his entire career working for Canadian furniture manufacturers and he has developed a fine sense of the industry's historic role in the growth and development of the country.

"Since the first ships came over loaded with settlers, people have been building furniture," says the 43-year-old businessman, who is based in the town of Walkerton, 150 kilometres northwest of Toronto. "The flour mill, the lumber mill and the furniture factory were usually the first businesses in most settlements."

These days, though, the prospects for this heritage industry look bleak.

"Governments and the financial community have written off furniture manufacturing," Hofmann adds. "I have heard the comment made that it is a sunset industry. It's very hard for us to get financing."

The industry, both here and in the U.S., is being killed by cheap imports from China and other low-cost countries.

Canadians spent $2.6 billion on such goods last year, which represented 34 per cent of the market, according to figures compiled by the Aktrin Furniture Information Center in Oakville, Ont.

To say that the playing field is uneven would be an understatement.

As Hofmann observes, the Chinese can ship finished product here for less than a Canadian manufacturer pays for raw materials.

Companies across North America have been folding in recent years and the trade press routinely carries news of plant closures as well as notices for equipment auctions.

But not everyone is quitting. In fact, a few brave souls like Hofmann are actually investing in the industry.

Four and a half years ago, he became president of the Bogdon and Gross Furniture Co. in Walkerton, a manufacturer of distinctive solid-wood furniture for the bedroom, the dining room and the home office.

Peter Bogdon and Karl Gross founded the firm in Kitchener in 1927 and members of the Bogdon family owned it when Hofmann took over.

His job was simple: Save the company. It had been losing for several years and had only a 50-50 chance of surviving.

"We spent several million rethinking our whole approach to manufacturing," says Hofmann, adding that he finally settled on the Japanese approach rather than the Henry Ford method.

"Instead of producing a Model T and saying: 'You can have any colour you want as long as it's black,' we've taken a page from the Japanese car companies," Hofmann notes. "We're producing what the customer wants and when they want it."

Bogdon and Gross assembles standard model bedroom or dining room suites and ships them to retailers across the country as display models, but buyers can customize the pieces to suit their tastes by, for example, choosing the color and finish.

The company has wisely abandoned the high-volume, mass-market end of the business now dominated by the Chinese and other low-cost manufacturers.

It has gone upscale with bedroom suites in the $5,000 to $7,000 range and dining room suites that sell for $8,000 to $12,000.

Hofmann has also repositioned the company at the retail end. Bogdon and Gross furniture used to be available in 450 stores, but that number has been reduced to 50 outlets run by merchants who know the product and are committed to selling it.

Turnarounds take time and this was no exception. Sales grew by 35 per cent from 2002 through 2006, but the company only become profitable last year.

At that point, the Bogdon family was ready to cash in and they found an eager buyer in Hofmann, who purchased the firm last December.

He is convinced that the company is "China proof," as he puts it, and he is optimistic about the future.

His goal is to double sales in the next five years. He also intends to rebuild the workforce from the current level of 80 to its historic peak of about 175 employees, which was achieved 25 years ago.

Furthermore, he believes that the Chinese manufacturers will eventually lose some of their current advantages.

Workers there will begin to demand more. Costs will rise. And Canadian consumers will tire of low-priced furniture that is built to sell, not last.

But that may take a decade and the question is: How many Canadian companies will be left to take advantage of the opportunity?

Not many the way things are going. (D'Arcy Jenish can be reached at jenish@businessedge.ca)