Furnishing under foreign control: a danger for the Polish timber industry?

Poland, also known as the Tiger of the Central and Eastern Europe Countries has become an Eldorado for companies looking forward to maximize their turnover. Indeed, more and more SMEs but also big names in the industry are rushing the doors of Poland to establish there. What about the timber industry, does the economy also favors its development?

An economy of the opposite trend

PolandAs mentioned above, Poland is attracting more and more companies. And for good reason: unlike its fellow EU members, Poland is not under deindustrialization and can still count on its manufacturing sector, which contributes to more than a quarter of its GDP. It goes without saying that its population of 40 million and its highly skilled workforce sound like a dream to manufacturers who could then produce at lower costs while enjoying an advantageous geographical location. At the heart of Europe and close to Germany both from a historical a and a geographical point of view (Germany also happens to be the main foreign investor in Poland, with Sweden), the context is therefore very favorable. Regarding the timber industry, and against all odds, Poland is in 6th position on the European market for furniture production. It is no coinciodence if the output of this industry has increased by 7 over the last decade. Indeed, the sector employs over 116,000 people (4% of employment in Poland) in over 20,000 companies.

Market subject to various influences

wood industryOn the other hand, this market remains in the hands of its investors and big names of the furniture production market. Examples include IKEA, whose subsidiary Swedwood Holding BV happens to be the largest investor in the sector, with exports amounting to an annual turnover of 595 millions of euros. This factor is not unrelated to the fact that the majority of the revenue collected is based on exports, namely 80%. This poses a problem with respect to forecasts suggesting an increase in domestic demand for furniture, which should follow Poland’s economic recovery and thereby induce higher -and deserved- purchasing power of the local population. This rising demand also finds its roots in the current policy of modernization of structures started by Poland following the boom in the economy and induced mainly by investments that have been made in services, which concretely involve new buildings to accommodate the workforce. The loop is closed. Can we speak of a threatened industry? Since Poland is famous for its tough and very attached to its ecological heritage market, the question can be asked.

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With its expertise in the wood processing and its global reputation in this sector, it is therefore conceivable for the timber industry to manage to combine its « know-how » with the financial conditions of its business, mainly the yoke of foreign investors. But this, the future will tell.

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