Eurofoam ceo: Polish foam industry dynamic

Regulatory change and the potential for furniture industry consolidation are among the challenges faced by Polish foamers today. Eurofoam ceo Alexander Mikolasek told Urethanes Technology International magazine how the firm’s Polish subsidiary plans to meet those trials.

“It is true that [Poland’s PU foam market] is not a very transparent market but what is obvious is that over the last 10 years it has been, and continues to be, a very dynamic market. For sure it is the most dynamic market in Europe.”

Poland’s high number of furniture producers – estimated at 15,000 by Italy’s Centre for Industrial Studies, coupled with the presence of the world’s biggest furniture retailer IKEA, is what creates that “dynamic customer base”, according to Alexander Mikolasek.

Mikolasek believes the furniture industry in Poland is poised for a process of consolidation. “I think that what we are going to see is fewer players, but then there will be bigger players. There are some smaller companies that will go out of business and the bigger producers will increase their share of the market.

“On the other hand, what is still an issue is the high level of competition within Poland. However, there is also still a high level of demand. The challenge in that for the furniture makers and for the foam producers that supply them is a logistical one. As the furniture producers get bigger so do their requirements for storage space.”

From Eurofoam’s point of view, the firm has just invested in long block storage, according to Mikolasek. “We have extended our warehousing which is allowing us to be more responsive to our clients and handle large volume contracts.”

In 2014, Eurofoam’s Polish division reported sales of more than EUR 100m, with a profit of EUR 7m in the year, according to files held by the Central Court of Registry. The Zgierz site is not only Eurofoam’s biggest plant in Poland but also the largest facility in the group. The site includes a 4,000 m² fully automated facility storage for 30m and 60m blocks. It allows the firm to meet shorter delivery times, as well as reply to the market in a more flexible way, said Mikolasek.

Market transparency

Overall, Mikolasek estimates that Europe’s total flexible foam output is 900kT/year, with Poland’s total production at around 190kT/year. He said Eurofoam’s Zgierz site produces around 40kT/year, with “up to 150 truckloads of foam coming out of our Zgierz site every day.”

Mikolasek said he believes IKEA accounts for around 45kT/year – at a guess – of Polish output that total figure though its integration with Polish suppliers. “There are probably around 10 foam producing companies in Poland, with one or two of those either directly owned by IKEA or in partnership with the Swedish furniture firm,” he added.

Explaining how Poland became a furniture-producing powerhouse, he said: “Poland just had people with the right education and enough wood, an important raw material for furniture production. It made Poland a perfect environment but what is still striking today is the high number of companies producing foam in Poland.”

Foaming is Eurofoam’s main focus and, geographically, its Zgierz site is in the centre of Poland, “which we think is an excellent location,” said Mikolasek

“We have three foaming lines on which we produce 180 different grades of foam. Why so many grades? Well we serve all kinds of foam applications, not just furniture and bedding. We are also supplying foams for transport systems and specialised foams for technical applications,” he added.

Challenges

“We still think that the demands from the authorities when it comes to fire safety standards is perhaps the biggest challenge. We see that rising and the authorities getting tougher and tougher.”

But, he said, the firm is proud of its record for manufacturing foam to high safety standards.

Mikolasek said Eurofoam itself had not been hit by political and diplomatic issues such as European sanctions on Russia, although he added that general Polish markets had been indirectly affected. For Mikolasek, the main challenge remains the competition to provide the best and most cost-effective product. “We are about to launch a new feature for our rolled foams in which the joints are invisible. In this way, we are offering a product which reduces waste for our customers.”

Upgrading converting capacity

Now that Eurofoam has completed the logistic upgrade to its facility, the company is turning its attention to its converting capacities, Mikolasek said. Overall, Eurofoam has 36 sites dedicated to conversion, four of which are based in Poland, he said.

How Eurofoam Polska fits into the group

Eurofoam Polska is a 100% subsidiary of the Eurofoam Group with headquarters in Vienna, Austria. The firm’s main foaming site in Zgierz, north of Lodz, is one of several the company owns in Poland.

The firm produces ether and ester PU foams in blocks, rolls, plates and customised shapes from three foaming lines with 670 employees. Eurofoam’s output goes into furniture, while its technical foam is used in footwear, automotive and acoustic soundproofing and other applications.