The furniture industry is an important sector of the Polish economy. Keeping a high position and increasing the efficiency of Polish furniture companies, with rising costs of remunerations and diminishing human capital resources, will require the implementation of new business models and increased investment expenditures. The automation and robotization of production, the integration of the value chain, material, functional and design innovations, and direct services for individual and institutional customers have the potential to become a driving force for the development of furniture industry. In the Strategy for Responsible Development, 12 flagship projects were included to create Made in Poland products and solutions, with significant usefulness and prospects to succeed in global markets. The purpose of the Polish Furniture program is to stimulate the development of industrial design and the creation of strong Polish brands using modern technologies and eco-design. During the 590 Congress in Rzeszów, the Financial Services Package was presented - a pilot project for the furniture industry. All elements of the package support Polish companies and implement the objectives of the Polish Furniture program.
"Among the industrial processing sectors, furniture making is the second industry in terms of net export, and creates an important part of our economy. The Polish Development Fund, under the flagship program of the Ministry of Development "Polish Furniture", coordinates the implementation of initiatives aimed at the development of the furniture industry. The PFR Group provides Polish furniture manufacturers with financing and offers a range of non-financial instruments," said Paweł Borys, the President of the Management Board of The Polish Development Fund.
"The purpose of the "Polish Furniture" program is to develop the image of Polish furniture as a manufacturer of high-quality brand products. Our ambition is to occupy, by the end of 2020, the first place in Europe when it comes to the value of furniture exports. We also want to become the leading European furniture manufacturer in terms of value by the end of 2030," said Tomasz Wiktorski, the Manager of the Polish Furniture program in the Department of Polish Development Fund Sector Programs.
The Polish furniture sector is one of the largest employers in Poland. In the furniture industry, manufacturers employing more than 49 persons (medium and large size enterprises) employed approximately 132 thousand persons in 2016, which makes this industry the fourth industry in Poland with regard to the number of employees. The entire Polish furniture industry provides employment to almost 180,000 persons.
Sales of medium and large furniture manufacturers have maintained a level of around 2% of GDP for many years. The Polish furniture sector is one of the major exporters. Export of goods in the CN 94 group exceeded PLN 48 billion. In 2016, Poland took fourth place among the world's largest furniture exporters. China took the first place, which accounted for over 37% of global exports. Germany (7.2% of share) and Italy (5.6%) were also placed before our country. Poland exports more furniture than, among others, the United States, Mexico or Vietnam.
We manufacture and export relatively large amount, but we do not do so very efficiently. The average work efficiency in the Polish furniture industry, without labor costs, is lower than the EU average. After taking into account labor costs, the situation appears better - Poland is in third place behind Bulgaria and Great Britain.
Polish Development Fund defined the basic drivers of the furniture industry development:
Automation and robotization of production. This development model assumes the acquisition of competitive advantage due to process optimization and the scale effect, however it requires investment expenditures in modern solutions of automatic inter-operative transport, implementation of lean production solutions, use of autonomous and collaborative robots, and IT coupling of all stages of production.
Integration of the value chain. The activity in the market of investments, mergers and acquisitions of foreign entities, manufacturers and distributors benefits enterprises by broadening the customer base and improving the brand portfolio. Investments related to furniture materials and accessories may bring similar benefits.
Material, functional and design innovations. Higher profitability can be achieved through material innovations (e.g. in the scope of lighter board materials, cheaper decorative materials, etc.), development of functional innovations (e.g. relaxers, integration with Internet and digital systems, etc.) or through the development of design innovations.
Development through direct services. Services for individual customers: in this case, it is necessary to implement new skills related to the operation of e-commerce platforms and the selection of the offer for online sales in the companies. This involves the need to optimize logistics processes, and requires IT integration of supply, production and trade. Services for institutional customers: this is an area that from a traditional furniture company requires a change in the business model and the expansion of production skills with interior design services, rapid prototyping and assembly in various, often remote, locations in the world.
The Group of The Polish Development Fund offers a range of financial, advisory and promotional instruments to Polish furniture manufacturers. At the 590 Congress in Rzeszów, the Financial Services Package was presented - a pilot project for the furniture industry. All elements of the package support Polish companies and perform the objectives of the Polish Furniture program.
The Polish Enterprise Investment Fund invests in Polish entities an amount from PLN 50 to 300 million, including minority shares in companies. The Foreign Expansion Fund invests in companies established abroad or taken over by Polish entities. The volume of investment varies from EUR 2.0 to 12.5 million in this case. The Financial Services Office of the Industrial Development Agency offers financing of enterprises in the restructuring process and debt financing of their growth. Bank Gospodarstwa Krajowego has treasury products, working capital loans, debt financing independent of the business cycle and debt financing for the "Loan for Purchaser", as well as loans from EIB and KfW, and CashManagement in its offer. The Export Credit Insurance Corporation provides insurance services of the Loan for the Purchaser, foreign trade receivables insurance, direct investment insurance abroad - contract guarantee services, while also offering a short-term loan repayment guarantee and guarantees for letters of credit. Export Credit Insurance Corporation Joint Stock Company (KUKE) Finance provides factoring - with or without taking over the risk of customers' solvency.
"Among the industrial processing sectors, furniture making is the second industry in terms of net export, and creates an important part of our economy. The Polish Development Fund, under the flagship program of the Ministry of Development "Polish Furniture", coordinates the implementation of initiatives aimed at the development of the furniture industry. The PFR Group provides Polish furniture manufacturers with financing and offers a range of non-financial instruments," said Paweł Borys, the President of the Management Board of The Polish Development Fund.
"The purpose of the "Polish Furniture" program is to develop the image of Polish furniture as a manufacturer of high-quality brand products. Our ambition is to occupy, by the end of 2020, the first place in Europe when it comes to the value of furniture exports. We also want to become the leading European furniture manufacturer in terms of value by the end of 2030," said Tomasz Wiktorski, the Manager of the Polish Furniture program in the Department of Polish Development Fund Sector Programs.
The Polish furniture sector is one of the largest employers in Poland. In the furniture industry, manufacturers employing more than 49 persons (medium and large size enterprises) employed approximately 132 thousand persons in 2016, which makes this industry the fourth industry in Poland with regard to the number of employees. The entire Polish furniture industry provides employment to almost 180,000 persons.
Sales of medium and large furniture manufacturers have maintained a level of around 2% of GDP for many years. The Polish furniture sector is one of the major exporters. Export of goods in the CN 94 group exceeded PLN 48 billion. In 2016, Poland took fourth place among the world's largest furniture exporters. China took the first place, which accounted for over 37% of global exports. Germany (7.2% of share) and Italy (5.6%) were also placed before our country. Poland exports more furniture than, among others, the United States, Mexico or Vietnam.
We manufacture and export relatively large amount, but we do not do so very efficiently. The average work efficiency in the Polish furniture industry, without labor costs, is lower than the EU average. After taking into account labor costs, the situation appears better - Poland is in third place behind Bulgaria and Great Britain.
Polish Development Fund defined the basic drivers of the furniture industry development:
Automation and robotization of production. This development model assumes the acquisition of competitive advantage due to process optimization and the scale effect, however it requires investment expenditures in modern solutions of automatic inter-operative transport, implementation of lean production solutions, use of autonomous and collaborative robots, and IT coupling of all stages of production.
Integration of the value chain. The activity in the market of investments, mergers and acquisitions of foreign entities, manufacturers and distributors benefits enterprises by broadening the customer base and improving the brand portfolio. Investments related to furniture materials and accessories may bring similar benefits.
Material, functional and design innovations. Higher profitability can be achieved through material innovations (e.g. in the scope of lighter board materials, cheaper decorative materials, etc.), development of functional innovations (e.g. relaxers, integration with Internet and digital systems, etc.) or through the development of design innovations.
Development through direct services. Services for individual customers: in this case, it is necessary to implement new skills related to the operation of e-commerce platforms and the selection of the offer for online sales in the companies. This involves the need to optimize logistics processes, and requires IT integration of supply, production and trade. Services for institutional customers: this is an area that from a traditional furniture company requires a change in the business model and the expansion of production skills with interior design services, rapid prototyping and assembly in various, often remote, locations in the world.
The Group of The Polish Development Fund offers a range of financial, advisory and promotional instruments to Polish furniture manufacturers. At the 590 Congress in Rzeszów, the Financial Services Package was presented - a pilot project for the furniture industry. All elements of the package support Polish companies and perform the objectives of the Polish Furniture program.
The Polish Enterprise Investment Fund invests in Polish entities an amount from PLN 50 to 300 million, including minority shares in companies. The Foreign Expansion Fund invests in companies established abroad or taken over by Polish entities. The volume of investment varies from EUR 2.0 to 12.5 million in this case. The Financial Services Office of the Industrial Development Agency offers financing of enterprises in the restructuring process and debt financing of their growth. Bank Gospodarstwa Krajowego has treasury products, working capital loans, debt financing independent of the business cycle and debt financing for the "Loan for Purchaser", as well as loans from EIB and KfW, and CashManagement in its offer. The Export Credit Insurance Corporation provides insurance services of the Loan for the Purchaser, foreign trade receivables insurance, direct investment insurance abroad - contract guarantee services, while also offering a short-term loan repayment guarantee and guarantees for letters of credit. Export Credit Insurance Corporation Joint Stock Company (KUKE) Finance provides factoring - with or without taking over the risk of customers' solvency.
