Poland prides in being one of the largest producers of furniture, with its rank being sixth worldwide. It also ranks fourth worldwide in exporting furniture. Thus, Poland has decided that its position needs to be strengthened further and investment for expanding the production capacity is a step in that direction.
As per the estimates of the Association of Furniture Manufacturers, the value of the furniture in 2017 amounted to over CHF 13 billion, witnessed an increase of 8% over the previous year. The growth is expected to witness an upward trend in 2018 by 10%. Majority of the furniture manufactured in the country is exported. The estimations of furniture exports in 2017 amounted to approximately CHF 12 billion, a 5% rise from the previous year. Germany is the largest importer of Polish furniture, contributing to around 30% of exports in Poland. United Kingdom, France, Netherlands, and the Czech Republic are among the other countries which import the furniture. Switzerland, in 2017 imported furniture from Poland worth CHF 217 million. Thus Poland is ranked fourth in countries supplying furniture to Switzerland, with Germany, Italy, and China being ahead.
The furniture industry forms an integral part of the Polish economy, contributing approximately 2.17% of the GDP of the country. This is in contrast to other EU countries where the average contribution of the sector amounts to 0.55%. As per the report by KPMG, "Furniture Market in Poland 2017", the furniture production in the country was worth PLN 42 billion.
One problem faced by the exporters of polish furniture is the lack of recognition of polish brands internationally. Furthermore, the sales made abroad are handled through large retail chains. Considering that the furniture manufacturing sector contributes largely to the Polish economy, state support can be counted upon. The new polish furniture program aims to ensure that new markets are developed and promotional activities are supported. Developments have also been made for funding investments to companies in the industry. The polish Development Fund understands that for strengthening its international position along with paying heed to the increase in labor costs and a decrease in a number of skilled workers, fresh business models and an increase in capital investment is the need of the time. The targeted areas of development in the industry include robotics, automation, consolidation, customized solutions, and innovations.
Currently, furniture manufacturing is done by more than 27000 polish companies, with more than 407 medium and large sized enterprises contributing to three-quarters of the production.
Poland is the second country to supply the largest amount of furniture to Ikea, first being China. A dozen factories of the Swedish brand are running the country, making it the largest furniture manufacturing company in Poland.
Quite a lot of companies with domestic capital form the major part of the polish furniture industry. These companies have assumed a significant role in the central and eastern European market.
The leading polish furniture group, BRW acquired sales of around CHF 470 million in the year of 2016. Its production sites, numbering to 21 are located in Poland and abroad. The Nowy Styl group, which is the third largest office furniture manufacturer of Europe, had sales of CHF 360 million in 2016. The company prides in operating quite a high-tech office furniture factory in Europe. Other domestic companies that have managed to make a mark include Forte with sales of CHF 302 million in 2016, Wojcik, with sales worth CHF 120 million in 2016 and Szynaka which had sales amounting to CHF 221 million in 2016.
Polish companies acquire interest from the limited purchase of power in the domestic market. Around Nan average of PLN 4.5 thousand was spent on furniture per household in three years. On the other hand, as per the estimates of the Business Insider Intelligence, around 38 billion that is PLN 135 Billion has been spent on furniture by the people of US, and this is just the record of the online market. This implies that the turnover of furniture ecommerce in the US is three times higher than the furniture trade in Poland.
One of the significant challenges that Poland faces when it comes to international expansion is the organization of logistics. This is a significant step in the ecommerce purchasing process. Before any piece of furniture can be dispatched from Poland to the new customers, the company must realize the workload of the organization that needs to be handled.
Transportation is pivotal when an online purchase is considered, and its importance increases all the more when it is expensive items, such as pieces of furniture at stake. However, this can also be used to acquire an edge over the competition. While gloves delivery is gaining popularity which not only includes transport services but also incorporates comprehensive service of assembling furniture and getting rid of the old one. Thus, the aspect which was once a hindrance for users is now a means of enhancing customer satisfaction.
New investments
An Austrian company, Egger commenced constructed in northeast Poland in 2017 of a furniture panel factory. Their investment is worth around CHF 280 million, and the production is likely to begin near the end of the year 2018.
Ikea's factory in West Poland, Zbaszynek, also witnessed an extension at the same time. The investment of this expansion is likely to cost around CHF 63 million, and completion is expected in the middle of 2018. This new plant will be capable of producing about 125 thousand pieces of furniture in a single week.
A new chipboard factory was opened by Forte in 2018. A production hall worth CHF 84 million is also in the plan. The hall will commence operating wholly next year.
Planning permission for expanding the woodworking plant was acquired by Sklejka Pisz Paged SA in the special economic zone in Pisz/Northeast in 2017. This project, whose investment worth is around CHF 30 million, includes a new manufacturing facility for plywood along with fresh production lines.
Meble Wojcik, a furniture manufacturer, was also permitted to construct a new production hall and warehouse in the area of Elblag with the investment approximating CHF 14 million. The company has also announced plans for investment in innovative and automated production lines. Plans of the company include expansion of the existing IT system so that the growing demands of the customers can be met.
Szynaka has plans of building a new high bay warehouse in Ilawa. An investment of CHF 6 million will be required for purchasing readers, a forklift localization system, shelves, and barcode terminals.
Swiss Companies
The Swiss Krono group prides in being known as the best Swiss company in Poland, claiming to have one of its products in every other household of Poland.
The company specializes in producing and selling wall designs, floor coverings and wood-based materials for the furniture and construction industry. It has been operating in Poland for more than two decades and has more than 1000 people working in its facilities.
Another example worth mentioning is IGP which has been operating in Poland since the last 15 years. It has its own sales company along with a production facility, located near Warsaw that was opened in 2016.
IGP produces powder coatings for various materials. These products can be used in different industries including wood furniture, transport, and construction. Some time ago, it was only metals on which powder coating was applied. However, owing to the development of low-temperature powder coatings, it can also be applied to wood. This is time-saving as compared to wet painting since one does not have to indulge in sanding, drying or priming. This increased efficiency is now being employed by a lot of renowned furniture manufacturers in Poland.
The investments made in this area also enhance the opportunities of export for the Swiss suppliers as a profound quality of technology is used in the furniture industry which has not yet gained prominence on the market. You can contact us to acquire more information about your market entry.
