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Furniture makers set stage for a comeback

  • 2000-03-23
  • By Darius James Ross
VILNIUS - Last week's Baldai2000 furniture show at the LitExpo exhibition facility saw 98 Lithuanian and European companies display their wares to a receptive public. Attendance at this year's show grew by 5,600 visitors over 1999. The total number was 28,000 over four days with 11,000 visiting on Saturday March 18. The mood among manufacturers is cautiously optimistic now that the country has seen the worst of the Russian crisis.

"We're just starting to see our products sell in Germany and Sweden now," said Ricardas Andriuskevicius of Bilijardai pool table manufacturers just outside of Kaunas. Until now, the company, in Ramuciai, has relied on Russia, Kazakhstan and other former Soviet republics for the bulk of its income. The Lithuanian market, owing to the country's small population, is just not big enough to support Bilijardai. It must export to prosper.

The company was started in 1988 and today has 70 workers employing the latest woodworking technology in its manufacturing process. They produce a huge range of tables.

"We make everything from kids' tables at 385 litas ($96) to high-end mahogany tables at 33,800 litas ($8,450) for people whose biggest problem in life is figuring out how to spend their money," Andriuskevicius said. All the wood used is from Lithuania except mahogany which doesn't grow in the country as it requires a warmer climate.

Kitchen and office furniture manufacturer Narbutas & Ko is also starting to look west.

"In 1999 we suffered a 33 percent drop in revenues. We had over 500 employees before the Russian crisis and are now down to 310 with 190 in production and 120 in marketing and administration," said Petras Narbutas, the company's owner. "Right now, we're actively looking for a solid foreign partner to help us expand and enter European markets. We need to participate in the world economy," he said.

To this end they are employing the services of Baltic Management, the Norwegian company that helped Denmark's Carlsberg acquire Klaipeda's successful Svyturys brewery.

"Right now, we need to regain the Lithuanian and Russian markets. In five years, though, I'd like to see 50 percent of our production going to the West," he said.

Arne Augustinussen is helping to launch Narbutas' foray into Western Europe. "Presently we're slowly entering the German and English markets. They're large markets, so our competitors won't notice us right away. This will give us time to get established. We're starting with office furniture as we can go through dealers and use their showrooms. Kitchens require a larger investment as you need to build your own showrooms in order to develop the brand," said Augustinussen.

Advantages for Narbutas & Ko include the favorable exchange rate and low labor costs in Lithuania.

"Our office furniture is produced in accordance with European quality standards and yet is between 30 [percent] and 60 percent cheaper than a product of identical quality produced in Western Europe depending on the material," he said.

There is a silver lining to the Russian crisis.

"The only good thing to come out of the whole crisis is the fact that Lithuanian companies have been forced to look west and develop a more professional approach to promoting themselves there. Russia and the other transitional countries are too volatile. If we manage to export to Scandinavia, Germany and the UK, we won't have all our eggs in one basket. Even then, a future recession in Germany, for example, will only cause a drop in sales, not wipe them out. It's a mature economy," Augustinussen said.

Latvia's Tehnika was also at the show displaying portable bandsaws and processing equipment for small woodlot owners. The company had revenues of 1,200,000 lats ($2.03 million) in 1999. Its main markets are the Baltic states, Belarus and Russia.

"We barely felt any effects from the Russian crisis. Frankly, this is because our customers are small woodlot owners who escape the eye of the state. They cut trees on their lots, process them on the spot, and sell the materials for cash. Most did well throughout the crisis," said Janis Beisins, one of the company's representatives.

Final-year students from Lithuania's furniture design programs were also on hand displaying their designs and hoping to catch the attention of future employers. They were given small stands for free.

"I get the impression from talking to people that the job market is looking good. In recent years a lot of graduates had to find jobs in graphic design because of the problems in the furniture industry. I'm optimistic that I'll find a job in my field," said Sarunas Slektavicius, a student at the Vilnius Art Institute.

An industry association called Mede represents Lithuania's furniture makers, design schools and wood processors. It works with different levels of government to protect the industry's interests and also organizes trade shows. They were distributing an expensive, glossy brochure at Baldai2000 with a complete listing of Who's Who in the Lithuanian furniture world.