Ukrainian furniture conquer foreign markets despite the war

Ukraine has a lot of manufacturers of a different kinds of furniture with great experience, design solutions, customer adaptivity and prospective future. But what is the situation with the industry after the 24 of February? Learn more about this in an interview with Oksana Donska, a Member of the Board of the Ukrainian Association of Furniture Manufacturers.

Oksana, firstly, tell us more about the Ukrainian Association of Furniture Manufacturers and your participants. How many companies from your Association are exporting regularly?

Ukrainian Association of furniture manufacturers units 300+ companies. Together it is more than 70% of the Ukrainian furniture industry. And the biggest exporters of Ukrainian furniture are UAFM participants.

We understand that the war has changed many things and businesses face so many difficulties. What about the participants of your Association? What correction made the war in their operational activity? For instance, how do they cope with one of the main problems which faces all Ukrainian exporters since the war started - logistics?

Unfortunately, about 5% of Ukrainian furniture manufacturers have suffered as a result of bombings and active military operations in production areas. In March 2022 the export of furniture was blocked. At that time everyone hoped that the war will be finished in several days.

Due to the reports of the State Ukrainian Customs by sea transport, we used to deliver 3,3% through Odesa region ports. Because of the war, we lost the possibility to deliver by sea through Odesa port. And the participant of UAFM HN logistics organized the hub for furniture manufacturers in Romania - port Constanta. Also, Ukrainian furniture manufacturers use the direction to ports Gdansk in Poland.

In 2021 we exported $1,05 bln to 120 countries. 87,6% of export in 2021 was to the EU. We deliver to Europe by trucks. The actual price of delivering is 2 and more times higher than it was before the war. And this had a significant impact on the shift in emphasis on purchases by foreign buyers. Now the furniture of the middle and higher segments has become more attractive than the products of the budget segment.

That is life-affirming. And what about changes in the activity of your Association? Do your stop promoting Ukrainian products abroad?

In 2021 we organized in Kyiv a UAFM fair for the promotion abroad Ukrainian furniture and components - Furniture of Ukraine Business Expo. Our event was visited by international buyers from 33 countries. Because of the war we had to postpone FUBE-2022 to the period after the victory of Ukraine.

By that time the association team organizes national booths at international fairs. From the beginning of the war we participated in 5 events where we presented products of 67 Ukrainian furniture factories. We were in Poland, OAE, Italy and Germany. By our plan during 2023, we will attend 5 more fairs, where we are going to bring about 100 factories.

Sounds impressive. Share more about participation at trade fairs you have attended. What are the first results?

First of all we prove to the world that the Ukrainian furniture industry keeps working. At each trade fair about 25-30% of our participants were without export experience and after attending they got a lot of knowledge and some of them started exporting. After the Poland fair Meble Polska several factories became full of orders until the end of the year. The last event in Germany hopefully by the opinion of the participants will bring about 1,2 mln EURO.

You have a chance to discuss a lot with foreigners during the last trade shows. Do they ready to deal with Ukrainian companies right now and how do our companies persuade them?

“Before the war we had some issues with payments and orders from Ukraine. Now everything is excellent. Participating in fairs, fighting with russia, exporting good products you prove that it is possible to work with Ukraine even during the war”, - one of the booth visitors in Germany said to us.

Business is a process of agreement. For example, some of the Ukrainian manufacturers have changed the terms of contracts from EXW to FOB. Several factories have started to use the guarantee service of the Export Credit Agency. Some of the manufactories have started up their affiliates abroad.

According to your observations, what products from Ukraine have the most demand from foreign buyers? Could Ukrainian producers wonder foreign buyers and win the competition with companies from other countries?

The Ukrainian business is really service oriented. And that is our strong part in contract furniture manufacturing when you supply to restaurants, hotels or private residentials. Our manufacturers make customers' dreams come true by implementing complex solutions. There are a number of solid wood serial furniture manufacturers with beautiful collections and huge capacities. Upholstery furniture factories have also good potential. With government support with can get back our positions in cabinet furniture manufacturing too.

And in order to sum up, and if overcome the topic of war, what are the most developments and changes you have seen in the Ukrainian furniture industry during the last few years?

We are growing. We grow very fast even now. By the program “Furniture economical wonder” in 10 years we are going to have the amount of export of about $15 bln (in 2021 it was $1,05 bln), about $5 bln of investments and to increase 100000 labor to 200000.

Thanks for this inspiring interview. It is really hard to imagine in which circumstances of all Ukrainian manufacturers are working now, but stories like yours confirm that our companies are manageable to impress foreign buyers with quality and the possibility to live up to their commitments. Good luck in this hard work!