CATAWISSA, Pa. - For decades, Catawissa Lumber thrived by selling hardwood components to American furniture makers.

But CEO Bill Gittler Jr. could see the Chinese writing on the wall.

Over the past decade, American furniture manufacturers have been steadily closing factories or moving them to other countries, usually China, where wages are extremely low.

And Catawissa Lumber has felt the effects firsthand.

The company lost its oldest and largest household furniture customer in 2004, when Pennsylvania House shut its Lewisburg factory. Catawissa Lumber's sales to other American companies have plummeted or dried up entirely.

The company's revenue fell from $46 million in 2003-04 to $38 million in 2004-05, a 17 percent drop, Gittler says.

But over the past five years, Catawissa Lumber executives have been pursuing a bold new strategy.

In part, they have been establishing business ties in China in hopes of selling wood components to furniture makers there.

The company is trying to "survive in an industry that is very troubled and declining in our country," Gittler says.

Catawissa Lumber's first major overseas success is a new line of high-end furniture, handmade by Chinese artisans, called Catawissa/Baili Fine Arts & Crafts, released last fall.

Gittler discovered Beijing-based Baili, whose owner was looking for hardwood supplies and hoping to enter the American market, through a consultant.

The two companies soon partnered to create the Catawissa/Baili line, made of Appalachian cherry hardwood and designed by Baili's craftsmen.

Gittler is hoping other Chinese manufacturers will soon think, "If Baili is buying panels from the U.S. and is successful at it, gee, maybe we should buy from Catawissa Lumber."

Gittler's first hard look at the Chinese market came in early 2001, when he attended a trade show in Guangzhou, at the heart of China's furniture-making sector.

The Chinese trade association assigned him a translator, a savvy engineering student, who helped him set up his booth at the show and served as his contact with potential customers.

Gittler says he was inundated with inquiries.

He recalls talking via translator to a Mongolian woodworker whose company crafts intricate stairs, and a western Chinese businessman whose firm specializes in furniture for disabled people.

He could see that both were craftsmen, their hands rough and colored with wood stain. That's unlike most American owners, he says.

Gittler spoke at length, through the translator, to a man from northern Vietnam interested in Catawissa's products.

The man then turned to Gittler and spoke in perfect English, he recalled with a laugh.

Gittler came away from the eight-day show encouraged.

Then, Gittler's son, Derek, met an important contact for the company in 2002.

The younger Gittler is fluent in Japanese and well-versed in Asian cultures. He holds a bachelor's degree in foreign service from Georgetown University and taught three years at a girls high school in Japan.

Derek had joined Catawissa Lumber in 2001 as director of international sales and was soon attending trade shows with his father, traveling to China and Singapore.

As a result, he was asked to speak at an event sponsored by SEDA-COG, the development agency near Lewisburg, where he met consultant James Chan, a fellow speaker.

Chan's company, Asia Marketing & Management in Philadelphia, was helping medium-size manufacturers do business in China, Gittler says.

Soon after, Gittler hired Chan as a consultant.

"We could not have gotten where we've gotten without James Chan and his contacts," Gittler says.

It was one of Chan's Chinese contacts who found Baili for Gittler.

He was also present during the Gittlers' first visit with John Liu, Baili's owner.

And he has served as the interpreter between Gittler and Liu, who doesn't speak English.

Gittler says he quickly built a "trusting relationship" with Liu.

"Just on speaking, the chemistry was right," he says. "We perfectly understand each other, because he's a true woodworker."

Gittler paid all the costs for Liu to make four sample pieces of furniture.

"He was doubtful about using our product," Gittler says. "But when we gave him those four initial samples, he saw the advantage of it."

Soon after, the companies partnered to produce the Catawissa/Baili line.

Gittler formed a new division, Catawissa Trading Co., to buy and sell lumber, wood components and furniture.

That division buys Appalachian cherry panels from Catawissa Lumber's manufacturing arm and then sells them to Baili.

Baili's craftsmen make the furniture by hand using centuries-old techniques.

And the trading company, which has the exclusive right to sell and market Baili furniture in the United States for five years, sells the finished furniture.

The first Catawissa/Baili catalog features "occasional furniture" or accent pieces for any room of a home.

Baili's artisans don't use any mechanical fasteners only wood joinery and adhesives, according to the catalog.

And the finishes are all-natural. One, made in Austria, is derived from orange peel extracts. Another, made in India, is created from insect proteins.

Gittler notes that both of the finishes are edible.

"I was offered a taste," he says. "But I declined."

The most expensive piece, an American Mission book cabinet, has a suggested retail price of $6,500. The least expensive, a coat rack, could run about $400.

This spring, the two companies plan to distribute a second catalog, featuring dining room, living room and bedroom selections in the same styles.

The Catawissa/Baili line is targeted at the "designer portion" of the furniture industry, Gittler says.

The trading company plans to sell mainly to interior designers and decorators and home architects, but also high-end furniture dealers.

The first customer to buy from the collection was Dena Hess, owner of 111 West Main Street, formerly Two Cousins Fine Furnishings, Bloomsburg.

Hess has already sold four pieces from the catalog to a Philadelphia-area customer.