Additionally, the Swedish retailer is partnered with Polish foam producers to meet its foam requirements – Dendro is one. IKEA, according to its website, has nearly 1,000 furniture makers to pick products from.
With IKEA closed as a potential customer, Organika looks to independent retailers and intermediate furniture producers market for its custom. “In that way,” he said, “we do actually compete with IKEA.”
“When dealing with the companies supplying IKEA, you have to remember that for each item the retailer will have two to three suppliers to choose from. Each of these furniture makers will be trying to produce that item at the best and cheapest price they can.”
“So, in that sense, our customers are always looking to produce a better product at a cheaper price than IKEA is able to produce it for itself,” Kwiecinski added.
Investment and restructuring Organika
Kwiecinski said the firm plans to continue its diversification into technical and automotive foams. “We started to diversify four or five years ago and this something we are now following. We see potential for our growth in the Czech Republic.”
He said Organika’s has the finances to strategically buy companies and “the firm is open to acquisitions.”
Kwiecinski said: “I have a feeling we are in the proper place for growth in Eastern European markets. Due to the situation in Russia and Belarus, no one will go further east.”
He said the firm had recently sold its Serbian assets, and closed its operations there although Organika added operations in Russia. Restructuring the Bulgarian and Bosnian operations had led to cost savings, he said.
“Where markets had been weak,” he said: “We are beginning to see some vitality and growth. Although volumes and markets decreased, we are going to stay in those areas. Both our plants are operating and we are waiting for growth again. Let’s hope that there is positive change in Russian markets.
He said the firm’s Belarusian operations is still operating and over the past two to four years, “we have seen development in our market every year.”
We see our markets in central and Eastern Europe. What we are seeing is a market shift of mattresses and furniture to Eastern Europe now. We don’t see our markets in Western Europe where the market is full of well-established players already.
Challenges
According to Kwiecinski, one of the biggest problems facing the Polish foam industry is over capacity. There are also less and less raw materials suppliers, he added.
The firm has its own transport arm, which said Kwiecinski improves logistics. As for trend, cheaper products is one and a need for greater comfort foams is another, he added. Softer foams are more sought after. The movement of industry to Poland continues
He also said the firm is working with customer to develop bio content for foams but this area is “usually more expensive”.
“At the moment, the final customer is not ready to pay for that.”
Organika numbers
The firm’s 2014 revenues were PLN 202m. In 2015, it was on target to reach PLN 220m in sales. Late last year the firm announced plans to invest PLN 2m in a modernisation programme. The firm also said it would increase workers at its site Malbork.
In 2010, the firm floated on the Catalyst bond market, which is part of the Warsaw Stock Exchange and a platform of trading in debt instruments issued by companies. According to Catalyst’s profile of Organika, the company listed nearly 20,000 A series bonds with a total value EUR4m. However, according to Poland’s National Court Register, the firm’s share capital stood at EUR662m in 2014.
Organika says its share of the Polish foam market is about 13%.
Profile
Malborskie Zaklady Chemiczne Organika SA is headquartered in Malbork, Poland. From there, Kwiecinski manages further sites in Brzeg Dolny and Przejazdowa.
Beyond Poland, the firm has facilities in the Czech Republic, Russia, Bulgaria, Romania, Bosnia and Herzegovina and Belarus. Overall the company’s foam output is 50kT/year, with around 45% produced in Poland.
Organika’s foam is used in upholstered furniture and mattresses. At present, over 20% of Organika’s foam yield goes to the mattress industry with the remaining 80% split between furniture, industrial and automotive applications.
In total, Organika has a workforce of 281, according to data from the firm.
