Ikea to divest Swedwood Karelia sawmill operation in Kostomuksha, Russia, concentrate solid wood component production at Swedwood Tikhvin; Russian restructuring includes construction of furniture factory next to particleboard plant in Veliky Novgorod

ANGELHOLM, Sweden , February 12, 2014 (press release) – To continue to support a long term sustainable growth for IKEA in Russia, IKEA Industry restructures and thereby strengthens its production in the country with a number of actions.

To continue to develop the activities in Russia, IKEA Industry invests by building a new furniture factory. The factory will be situated next to the existing IKEA Industry particle board production unit in Veliky Novgorod, Novgorod Oblast. The new factory is expected to create about 250 new job opportunities.

"With the acquisition of the particle board factory in Novgorod in 2013 this is our next step in supporting the expansion in Russia. By building a new furniture factory we strengthen our production of light-weight, wood-based home furnishing products to continue to offer affordable, good quality products for our Russian customers," says Robert Zanichelli, Manager Division Flatline, IKEA Industry.

"The investment for the new factory in Veliky Novgorod is a strategic step towards creating an efficient value chain in Russia. It is an important step in securing the availability of products for our customers and a prerequisite for the growth of IKEA in Rssia, says Walter Kadnar, Country Retail Manager, Russia.

Furthermore, IKEA Industry will optimise the poduction of solid wood components to achieve additional economies of scale by concentrating the production from Swedwood Karelia to Swedwood Tikhvin. By concentrating the production of solid wood components to Swedwood Tikhvin a more efficient supply will be achieved. The co-workers at the site in Kostomuksha, Karelia have been informed about the decision.

"We will of course support our co-workers in Swedwood Karelia with a support package containing different solutions with for example offering our co-workers job opportunities in Tikhvin. Concentrating the production to Tikhvin will help us operate a more efficient production to continue to support a long term sustainable growth in Russia," says Robert Mann, General Director Swedwood Karelia and Swedwood Tikhvin.

As a consequence of concentrating the production to Swedwood Tikhvin, IKEA Industry will divest the sawmill operation in Swedwood Karelia, with the main ambition to have an external part taking over the sawmill operation. The forest leases in Karelia will be returned together with the documentation, information and plans created for a responsible forest management.

Read more about our forestry operations in Karelia here.

IKEA Industry is the world's largest producer of wooden furniture and is an integrated part of IKEA Group. IKEA Industry has 44 production units in 11 countries with about 19 000 co-workers. Every year, IKEA Industry produces more than 100 million pieces of furniture for IKEA customers. 

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.