Prices will affect demand
„Demand for our furniture is growing in export markets, but the situation with shortages of raw materials and logistics remains tense due to the war in Ukraine and the imposed sanctions. This is why our team, hardened by the challenges of recent years, is looking for new solutions to ensure the supply of quality raw materials, the right volumes and timely delivery. Furthermore, changes in the geography of suppliers increase the cost of those materials and logistics, which affects the profitability of the company and the final price of the product. Therefore, we forecast that these reasons may limit the growth of demand this year,“ says Tomas Mauricas, head of Kauno Badai.
According to him, raw materials – wood panels, metal furniture fittings, as well as transportation – have recently increased in price by 10-40%, which will affect the company's results.
The current number of orders for Kauno Baldai will allow production capacity to be used to its maximum up to the end of the year. In addition, the company is gaining ground in Germany with in country's largest furniture retail chains. As a result, exports to this country grew by as much as one-sixth in the first quarter and accounted for more than 20% of the company's total sales. Kauno Baldai traditionally sells most of its products in the Benelux countries, and it plans to consolidate its position here by offering higher-end furniture of natural materials.
The new factory will stimulate growth
„We are strengthening our competitive advantage, and next year we will move fully into a modern factory, where innovative technologies and efficient solutions will be introduced. This will allow us to increase our sales by a factor of 1.5 to EUR 70 million a year within a few years. In the first phase, interior fitting work is starting in the already built building, installation of the equipment will start soon, and the production units will move in a few months later. Construction of the second part of the building is also gaining momentum, so we expect to complete the work on schedule as planned, despite the challenges in terms of supply and cost of building materials,“ says Mr Mauricas.
According to the company's head, in order to meet customer demand and increase production, upholsterers, seamstresses, and other specialists are currently being invited to join the team. The company is ready to recruit at least 30 new employees by the end of the year, who will be offered competitive salaries and performance incentives and work in a modern new production facility.
