Huge layoffs in the furniture industry. Business calls for changes in the State Forests

Luc Williams

The furniture industry is counting on participation in the national conference on forests announced by Deputy Minister Mikołaj Dorozała – says Jan Szynaka, president of the Polish Chamber of Commerce of Furniture Manufacturers (OIGPM). Over the last year, the industry has recorded a decline in production and employment. The problems resulted from a decline in demand and an increase in costs, including wood.

5 thousand people to be laid off in the furniture industry

Poland is the largest furniture exporter in Europe and the second in the world. Even though we maintained this position in 2023, the value of sold furniture production decreased by 6%. compared to 2022 and reached the value of PLN 64 billion.

The Polish furniture industry is based on exports. The largest recipient is Germany, where products worth almost PLN 5 billion were exported, 4%. more than a year earlier. In turn, the total value of exports decreased by 3%. up to PLN 62.3 billion. Despite declines over the last year, the export value was half as high as in 2016.

Entrepreneurs assume that the value of production sold this year will be at a similar level as in 2023 and will amount to approximately PLN 64 billion. According to estimates, this may mean the layoff of 5,000. people. Decreases in employment have already been observed in recent months – from March 2022 to December 2023, it decreased by 18,000. full-time positions, up to 147 thousand people employed in full-time equivalents. Pessimism is shown, among others, by: study by B+R Studio, according to which the economic climate in the furniture industry in the last two years has been the worst since 2001.

Wooden problems of the furniture industry

One of the reasons for the current situation is the weakening economic situation on the global market. However, the industry also sees problems in the Polish wood market and appeals to the government to take actions related to FSC certification and the export of unprocessed raw material. Other mentioned challenges include burning the raw material for energy purposes, which reduces its availability for entrepreneurs, as well as the inability to recycle the raw material – in Poland, post-production wood is treated as waste, even though wood-based materials are produced from it in many countries. OIPGM representatives admit that they have been submitting materials proposing new solutions to the ministry for many months. Now they hope to participate in the talks, including: during a nationwide conference on forests.

Restore FSC certification

OIGPM welcomes with hope the statements of Deputy Minister Mikołaj Dorożała about talks with the State Forests on the restoration of FSC (Forest Stewardship Council) certification, proving that the raw material comes from responsible forest management. In order for a furniture company to mark its products in this way, it must use certified raw material. This, in turn, is often required by contractors who, if they want to be certified, must have it throughout the entire value chain.

Meanwhile, in recent months, subsequent regional directorates of the State Forests have resigned from certification. In August, the State Forests explained that “today, signing a certification agreement with this organization (FSC-ed.) is a proverbial cat in a bag.” It was therefore replaced by the less popular PEFC certificate. According to current contracts, from April FSC wood will be available in only two of the 17 regional directorates.

– All our partners use FSC certification – in order to cooperate with them, we also have to meet these standards – one of the representatives of the furniture industry recently told us.

OIGPM warns that if the State Forests do not restore certification, further declines in the volume of furniture production may reach up to 20-30%.

Access to Polish wood

“The forest is not a timber economy, the forest is our sacred national resource and we will protect it again as it deserves (…) You will see that it is possible that it will no longer be the case that a Polish entrepreneur buys wood in Germany , in Austria, in Sweden, because Polish wood is sent wholesale to China for unknown reasons. A Polish entrepreneur will see that forests can be protected and at the same time that Polish wood can be available on the market and can be cheaper than Swedish wood,” said Donald Tusk during his exposé.

The furniture industry also draws attention to the fact that unprocessed wood leaves Poland instead of being used by Polish entrepreneurs. However, the sale is not carried out by the State Forests.

– The State Forests do not export harvested wood. They do not sell wood to China, nor do they transport it by ship from Polish ports, said Józef Kubica, then director general of the State Forests, in August.

The sale is carried out by intermediaries who buy the raw material from the State Forests and then sell it abroad.

– We can change the wood raw material sales system to reward its processing in Poland. This requires a different approach to evaluating offers, says Michał Strzelecki, director of OIGPM. In the proposed system, 60 percent evaluation of the offer would concern the price, and 40 percent – non-price factors. One of them would be the depth of raw material processing by Polish enterprises. According to Strzelecki, other countries are introducing similar mechanisms, which makes it increasingly difficult for Polish entrepreneurs to buy raw materials abroad – especially since it is impossible to import from the directions that were the most popular in the past, i.e. Russia and Belarus.

Innovation is the hope

What can improve the situation of the furniture industry? In addition to changes in the State Forests, OIGPM mentions strengthening promotion and brand building, innovation and research and development, automation of production processes and increasing cost and energy efficiency.

About LUC WILLIAMS

Luc's expertise lies in assisting students from a myriad of disciplines to refine and enhance their thesis work with clarity and impact. His methodical approach and the knack for simplifying complex information make him an invaluable ally for any thesis writer.