Export growth of wood products

New steps by the government to support small businesses

Rising freight rates are not appropriate

India is also attractive for furniture

Neighbourhood situation: something valuable, something cautionary

Everything that happened last week in Ukraine and the world and that is relevant for the furniture designer, read in our digest:

1. For the first quarter of 2020, the growth of exports of wood products increased by eight percent, said the head of the State Agency of Forest Resources Andriy Zablotsky. He noted that the following types of products showed export growth: industrial flooring (exported 32.2 thousand square meters, + 7%), firewood chipped (3.9 thousand cubic meters, + 11%), edged timber (81.9 thousand cubic meters, + 12%).

According to him, most of what is exported is of value-added wood products (especially furniture), “and this indicates a gradual increase in production capacity. And these are new jobs, taxes paid, and budget revenues. ”

2. Individual entrepreneur of the first and second group of taxpayers will be able to receive assistance for a child under 10 years. This was announced in another video message by President of Ukraine Volodymyr Zelensky.

We will add that the program will be valid for the time of quarantine and one month after its cancellation.

The Verkhovna Rada has previously approved raising the annual turnover limits for FOPs, which is important for maintaining reduced tax rates.     

3. The increase of Ukrzaliznytsya tariffs for freight transportation can have a detrimental effect on the domestic industry, and the government should not allow this. This was stated by political analyst Petro Oleshchuk. The political scientist also noted that Ukrzaliznytsia’s financial indicators indicate that the company does not have any need to raise tariffs for its services. 

At the same time, ex-Minister of Infrastructure Vladimir Omelyan believes that the increase in freight rates by Ukrzaliznytsia in times of crisis is an ill-considered step, as it will strike at export-oriented enterprises.

4. This pre-quarantine spring in Bangalore (India) hosted the 11th International Exhibition of Manufacturing Technologies for Furniture, Woodworking Equipment, Tools, Accessories, Accessories and Raw Materials “INDIA WOOD 2020”. National pavilions from Canada, China, Finland, France, Germany, Italy, Malaysia, Russia, Sweden, Taiwan, Turkey and the USA were presented at the exhibition. In addition, companies from Austria, Indonesia, New Zealand, Portugal, Spain, Switzerland, the United Kingdom and Vietnam, as well as business associations and delegations from Bangladesh, Bhutan, Myanmar, Nepal, Sri Lanka and the UAE are represented.

Today, the Indian market is actively developing and is of great interest to manufacturers of woodworking equipment worldwide. Such large European manufacturers of woodworking equipment as Homag and Biesse have already set up their plants in India. Perspectives on the Indian market are highly appreciated and the largest in South-East Asia the manufacturer of the equipment for the manufacture of furniture – the Hong Kong factory “KDT Machinery”.

5. Some Russian furniture factories, already in crisis, have already raised the prices for their goods, and the dynamics of growth in percentage is sometimes measured by a double-digit number. It is clear that the price of furniture manufacturers increase “with a stock”: reinsured, seek now, in a panic mood, to play future losses, which are inevitable because of the fall of the ruble, the rise in prices of imported materials and components. However, market analysts believe that those companies that follow this path will ultimately lose out.

More appropriate are those furniture manufacturers who, as an anti-crisis measure, undertake to move production of a number of components to their own factory. Logic: you never know-how in a crisis situation a particular provider will do. Sometimes, he feels the dependence of the furniture manufacturer on him – and immediately begins to “twist his hands”, dictates the harsh conditions. But if he knows that you can produce the same components yourself, the conversation is in a completely different direction. The unwillingness of many allied players to cooperate in times of crisis, the inability to find mutually beneficial solutions is still a feature of the Russian furniture market. Everyone counts only on themselves.