The furniture industry in the Baltic States

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THE FURNITUR E INDUSTR Y

IN THE B ALTIC STATES

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The furniture industry in the Baltic States

July 2018

Thomas Castrel, Vlaams economisch vertegenwoordiger Flanders Investment & Trade

Gedimino Prospektas 20 LT-01103 Vilnius

Lithuania vilnius@fitagency.com

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Executive summary

The furniture industry in the Baltic countries is well developed. The presence of an abundance of raw material – the Baltics are rich of forests – makes that we see today many furniture companies operating in the region making use of the craftsmanship of local workers, often transferred from one generation to another.

Numerous foreign, mainly Scandinavian furniture producers, have discovered the potential of the region already of which IKEA is probably the most famous example. The lack of skilled workforce has become a problem though, as especially Latvia and Lithuania are coping with a chronical migration crisis.

Nevertheless, there are opportunities for Flemish companies to tap into to the rich traditions existing in the Baltic region in this sector as described in the overview below, which will zoom in on the Lithuanian, Latvian and Estonian furniture industry.

1. A few facts & figures about the furniture industry in Lithuania

Wood manufacturing and furniture industry is a very old and traditional industry in Lithuania. As a result of the favourable wood processing conditions in Lithuania, since nearly a third of Lithuania‘s territory is covered with forests. The Lithuanian furniture and wood processing has long-standing traditions in producing high quality products. The industry is well-developed, modern production facilities are utilized and the workforce is highly skilled.

Lithuanian companies produce a wide range of furniture and the majority of production (85,2%) is exported. Lithuania is the fifth biggest IKEA supplier in the world. Moreover, Lithuanian offices of such companies as Swedbank, Barclays, Danske as well as some famous brand stores in Europe are equipped with Lithuanian furniture installed by local producers.

895 companies were active in the industry at the beginning of 2016, 97.5% of them were SME’s.

Furniture industry accounts for about 2.5% of GDP employing about 27,000 workers or 2.9% of total employment.

In 2015 exports of Lithuanian furniture industry amounted to almost EUR 1.2 billion, making it Lithuania`s fourth largest exporting industry.

Major export destinations for Lithuanian furniture industry in 2015 were Sweden (25.6% of total Lithuanian furniture exports), United Kingdom (12.2%), Norway (11.2%) and Denmark (10.2%).

These four countries accounted for almost 60% of Lithuanian apparel industry exports.

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2015 2016 2017 Furniture export to Belgium

(thousands of euros 19038,3 19776,1 24154,1

Furniture import from Belgium 2570,4 3369,9 4292,2

Source: Statistics Lithuania

List of products imported by Lithuania, Euro thousand

Sources: ITC calculations based on UN COMTRADE statistics.

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List of products exported by Lithuania, Euro thousand

2. A few facts & figures about the furniture industry in Latvia

The furniture industry branch is important in Latvia both in terms of export and employment. There are over 700 furniture manufacturers, mostly SME’s. Over the last few years, the proportion of higher value-added products has grown rapidly, with the diversity of products also increasing: furniture and furniture components, joinery and carpentry products, prefabricated wood structures, garden furniture and fencing, wood toys, and other products with high market demand. A number of companies have been successful in the field of furniture design and penetrated international markets with original furniture designs such as curved and glued chairs and high-quality bedroom furniture.

The common trend in the furniture sector is that an increasing proportion of production has been exported and the share of exports in sales has increased year-on-year. The majority of exports are destined for the EU, while traditional Eastern markets continue to have a significant share. The main markets for Latvian furniture are Germany, Denmark and Sweden.

Number of

employees: 2013 2014 2015 2016

0-9 564 600 654 679

10-19 69 71 64 52

20-49 37 28 28 31

50-249 25 26 20 17

>250 1 2 3 4

Total number of

companies 696 727 769 783

Source: Statistics Latvia

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Sale of manufactured industrial products

2011 2012 2013 2014 2015 2016 Chairs and seats (incl. seats convertible into

beds), thsd units 164,0 130,0 146,0 160,0 139,0 130,0

Wooden office furniture (incl. desks), thsd

pieces 80,5 93,8 107,0 101,0 133,0 159,0

Wooden kitchen furniture, thsd pieces 37,8 21,9 22,4 26,1 31,5 39,6 Wooden furniture for bedroom, thsd pieces 234,0 249,0 260,0 180,0 171,0 171 Wooden furniture for dining-room and

living-room, thsd pieces 85,0 106,0 190,0 119,0 116,0 98,9

Wooden furniture n.e.c., thsd pieces 3147,0 2326,0 1465,0 2904,0 2976,0 1860 Furniture of other materials, n.e.c., thsd

pieces 121,0 x x 16,8 12,7 12,0

Parts of furniture, mln euro 20,8 28,7 34,8 40,4 42,1 53,5

2015 2016 2017

Furniture export to Belgium (thousands of

euros) 1124,1 1175,5 988,9

Furniture import from Belgium

(thousands of euros) 763,4 425,3 506,5

List of products imported by Latvia, Euro thousand

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List of products exported by Latvia, Euro thousand

3. A few facts and figures about the furniture industry in Estonia

There are altogether nearly 700 companies active in the furniture manufacturing business in Estonia.

They employ more than 7,000 people. The furniture industry is a sector with long traditions in Estonia and the number of companies in the sector has kept growing in the past three years. These are principally micro enterprises which are important employers in rural areas.

Estonian furniture producers have been able to successfully compete in foreign markets. About two thirds of total production is being exported, with an increasing trend being reported. Finland, Sweden, Denmark, and Norway are the most important export countries for producers. Estonian companies manufacture high quality furnishings that are tailored to the specific requirements of the customers, and custom-made furniture for trade organisations, cafés and bars, offices, homes, and other places, covering many areas including office furniture, home furniture, modern furniture, bedroom sets and bedroom furniture, kitchen furniture, living room furniture, outdoor furniture, bathroom furniture, children’s room furniture, and more.

Indicator 2011 2012 2013 2014 2015 2016

Number of

companies 568 608 610 641 704 719

Number of

employees 7311 7388 7357 7544 7820 7852

Source: Statistics Estonia

Indicator 2011 2012 2013 2014 2015 2016 2017

Furniture industry

exports (mill. Eur) 257,2 242,6 222,9 245,7 278,4 271,8 310,5 Furniture industry

production (mill. Eur) 364,5 383,1 407,5 413,4 467,7 502,8 x

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2015 2016 2017

Furniture export to Belgium

(thousands of euros) 10 659,3 12742,2 12372,4

Furniture import from Belgium

(thousands of euros) 2936,8 3262,3 2984,0

List of products imported by Estonia, Euro thousand

List of products exported by Estonia, Euro thousand

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4. Furniture associations in the Baltic States

Association Lithuanian forest

The membership of the Association includes enterprises and organisations of various size and form of ownership related, in one way or another, to the processing of wood, production of wood products, trading in raw wood, wood materials and wood products.

www.lietuvosmediena.lt Asociācija "Latvijas Mēbeles"

www.latvijas-mebeles.lv

Estonian Furniture Industry Association https://furnitureindustry.ee/en

5. The biggest producers of furniture in Lithuania

SBA furniture group

SBA furniture group unites seven furniture manufacturing enterprises in Lithuania, Russia and Belarus.

www.sba.lt/en

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Vilniaus baldai

Vilniaus Baldai is a team of 600 professional furniture makers who continue the 130+ year old history of successful growth and ensure constant improvement and quality from generation to generation.

Their products are sold in Europe, Asia, the US, Australia - www.vilniausbaldai.lt/en/.

Šiaulių venta

"Venta" is a part of the "Libra Holdings" group. The company manufactures high quality contemporary furniture: chairs and tables from solid wood - www.venta.lt/en.

UAB Vokė-III

Company designs, manufactures and sells more than 5,000 kitchen and other carcass furniture sets per year in Lithuania and abroad. Over 50% of production is exported to Great Britain, Denmark, Norway, Sweden, Iceland and Latvia - www.voke3.com/en.

6. The biggest producers of furniture in Latvia

Dailrade Koks

SIA “Dailrade koks” was established in 1994 and since then it has become one of the biggest and most advanced furniture manufacturers in Latvia, with more than 500 employees. In its lifetime Dailrade koks has successfully cooperated with German, Danish, Finnish and US furniture sellers, to increase exports and company turnover each year - www.dailrade.lv/.

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DIŽOZOLS PLUS LTD

Manufacture of design furniture and all types of finished or untreated furniture components – shells, seats, backs, table parts, chairs according to customers’ designs and requirements. Manufacture of bespoke furniture – kitchen, office, and shop furniture from MDF and solid wood. Target export countries: Belgium, France, Germany, Luxembourg, Netherlands, United States of America.

http://dizozols.lv.

A/S Eliza-K

The first makes of Eliza collection appeared 17 years ago. Meanwhile the company has become one of the most dynamically developing manufacturers of the cushioned furniture. Elisa suggests a wide range of upholstery lining ang genuine leather form Italy, France and Belgium. Export countries: Denmark, Estonia, Finland, France, Germany, Switzerland - www.eliza-k.lv.

PINUS GB LTD

Company manufactures furniture from solid pine and birch. Their main products are chairs, dining room furniture, bedroom furniture, living room furniture, children’s room furniture and hallway furniture.

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LĀMA LTD

Their assortment includes complete kitchens, bathroom furniture, built-in cupboards, tables and other items for interior design. Export countries: Denmark, Finland, France, Germany, Norway, Spain, Sweden - http://abvirtuves.lv.

7. The biggest producers of furniture in Estonia

Bellus Furniture OÜ

Bellus has grown to become one of the largest manufacturers of upholstered furniture in Estonia. They currently produce 100,000 sofas & beds a year and employ 250 people.

www.bellus.com AS Standard

AS Standard is the leading furniture manufacturer in the Baltic States. The enterprise has existed since 1944. The company has two primary business directions: StandardPro offers hotel and public space furnishing solutions; StandardOffice focuses on offices and interior design.

https://standardoffice.eu/en www.standard.ee

Flexa Eesti AS

FLEXA® specializes in design, manufacturing and sales of Scandinavian interior solutions for kids.

www.flexaworld.ee

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Gomab manufactures high-quality solid wood furniture, most of which their export to different markets in Central Europe - www.gomab.ee

8. Furniture exhibitions in the Baltic States

Litexpo

Baldai - Furniture Vilnius Laisvės pr. 5, Vilnius +370 52 454500 info@litexpo.lt www.litexpo.lt/en

This event showcases products like interior designing, lighting possibilities, flooring, wall materials, home textile, finishing materials for bathrooms and other spaces, interior elements and decorations etc. in the Business Services industry.

SIA “BT 1”

“Baltic Furniture”

Ķīpsalas iela 8, Rīga, LV-1048, Latvija +371 67065000

vl.1tb@ofni www.bt1.lv

Baltic Furniture 2018 – the major furniture, interior design and lighting solutions fair in the Baltics that brings together the most competitive manufacturers and sellers to present new products, to establish international business contacts and to meet industry professionals - bulk purchasers of finished products, talented designers and media representatives.

Estonian Fairs Ltd DESIGN TRADE FAIR Pirita tee 28 10127 Tallinn +372 613 7337

fair@fair.ee

www.sisustusmess.ee

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Sources

• www.trademap.org/

• www.stat.gov.lt/en

• www.csb.gov.lv/en/

• www.stat.ee/en

• www.enterpriselithuania.com

• https://investinestonia.com/

• www.liaa.gov.lv/en

Disclaimer

The information in this publication is provided for background information that should enable you to get a picture of the subject treated in this document. It is collected with the greatest care on the bases of all data and documentation available at the moment of publication. Thus this publication was never intended to be the perfect and correct answer to your specific situation. Consequently it can never be considered a legal, financial or other specialized advice. Flanders Investment and Trade (FIT) accepts no liability for any errors, omissions or incompleteness’s, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organization mentioned.

Date of publication: July 2018

The furniture industry in the Baltic States

THE FURNITUR E INDUSTR Y

IN THE B ALTIC STATES

The furniture industry in the Baltic States

Contents

Executive summary

1. A few facts & figures about the furniture industry in Lithuania

2. A few facts & figures about the furniture industry in Latvia

3. A few facts and figures about the furniture industry in Estonia

4. Furniture associations in the Baltic States

5. The biggest producers of furniture in Lithuania

6. The biggest producers of furniture in Latvia

7. The biggest producers of furniture in Estonia

8. Furniture exhibitions in the Baltic States

Sources

Disclaimer