Lithuania on Shaky Ground: A Fifth of Key Businesses Face Collapse in a Make-or-Break Sector

There are currently 1,732 furniture manufacturing companies operating in Lithuania, with a total of 27,992 employees. Last year, these figures reached 1730 and 30654, respectively. During the year, the number of employees in furniture manufacturing companies decreased by 2662. In 2022. 32,842 employees worked in the furniture manufacturing sector, so in less than two years, the number of employees in the sector decreased by almost 5 thousand.

Last year, furniture manufacturing companies together received 2.52 billion. EUR of income, when in 2022 this indicator was 21 percent. higher and amounted to 3.05 billion Eur.

Company photo/Elari Tammenurm

Elaris Tamenurmas, acting head of Creditinfo Lietuvos, says that furniture manufacturers in Lithuania face complex problems: “2020 due to the Covid-19 pandemic restrictions, the demand for larger housing and new furniture has increased. In addition, when people began to work remotely more often, people also bought furniture for work more actively. But spikes in energy prices and disrupted supply chains have made orders more expensive and take longer, while the war in Ukraine has forced furniture makers to turn away from cheaper wood from Russia and Belarus. As demand decreased throughout Europe, the number of orders also decreased in Lithuania.”

Almost twice as many furniture manufacturers went bankrupt this year than last year

Since 2007 404 furniture manufacturing companies were declared bankrupt in Lithuania. An average of 23 furniture manufacturing companies become insolvent per year. in 2022 14 furniture manufacturers went bankrupt, in 2023 – 10, in the first nine months of 2024. – 19. In the furniture manufacturing industry, the most bankruptcies (40) were recorded in 2017.

E. Tamenurmas notices that the riskiness of furniture manufacturing companies remains higher than companies operating in other sectors in Lithuania. Currently, 20 percent belong to the highest and highest classes of bankruptcy. furniture makers, 21 percent are at risk of paying late. companies. At the beginning of this year, these indicators respectively reached 17 percent. and 20 percent, and in 2023 at the beginning – 17 percent. and 22 percent Comparatively, 9% of the high and highest bankruptcy classes in Lithuania currently belong. of all Lithuanian companies, 16% are at risk of paying late.

According to E. Tamenurmos, a similar situation in the furniture manufacturing sector continues in Estonia as well – the total income of companies decreased by 11 percent, and the probability of default in the sector increased from 1.53 percent. up to 2.02 percent – changed from A rating (good condition) to BB (poor condition).

The average amount of debt increased by 1.8 times

Sh. m. at the beginning of the year, 1,010 debts were recorded in the furniture manufacturing sector, the total amount of which was 2.68 million. EUR, and the average amount of debt was EUR 2,652. Currently, 864 debts of furniture manufacturing companies are registered in the credit bureau system, the total amount of which exceeds 4.1 million. EUR, and the average amount of debt is EUR 4,781, which is 1.8 times more than at the beginning of the year.

According to the data provided to the Registry Center, according to 2023 the ten largest companies in this field with revenues received are as follows: “Freda” (EUR 304.3 million), “Klaipėdos mediena” (EUR 212.8 million), “Narbutas International” (EUR 157.6 million), “Freda II” (138.2 million EUR), “Inno Line” (133.2 million EUR), “Vilniaus baldai” (97.9 million EUR), “Sakuona” (71.5 million EUR), ” Visaginas Line” (66.5 million EUR), “Actona Lithuania” (57.2 million EUR), “Scapa Baltic” (53.2 million EUR).

According to the number of currently created jobs, the top ten furniture manufacturers include: “Narbutas International” (1,706), “Dominari” (933), “Freda II” (859), “Freda” (691), “Metalas ir mediena” (624). , “Actona Lithuania” (611), “Sakuona” (568), “Klaipėdos baldai” (551), “Klaipėdos mediena” (530), “Visagino line” (511).

According to the data of the Register Center, so far 15.6 percent. furniture manufacturing companies have not yet submitted their 2023 financial reporting, although according to the laws in force in Lithuania, it was required to do so by m. May 31

The demand for workers in mattress manufacturing companies has decreased

According to the data of the Employment Service, furniture manufacturing companies registered 3,500 jobs in nine months. vacancies. Compared to the same period last year, the number of workers sought in the furniture sector has remained almost unchanged – 22 more vacancies have been announced this year.

Less than last year, companies whose main activity was mattress production were looking for employees, and more employers whose main activity was furniture production.

Job offers for unskilled workers decreased in the furniture manufacturing sector, but more qualified workers were sought than last year. The most requested were furniture – 430 vacancies were announced, woodworking machine fitters and operators (350), tailors (276), furniture upholsterers (172), metalworking machine fitters and operators (122), assemblers (108), warehouse clerks (85) ), carpenters (60), woodworking equipment operators (57), platform and forklift operators (49).

According to the representatives of the Employment Service, m. in the third quarter, the search for employees was more active than in the previous ones, but the same intensification of the search for employees was recorded in the same period last year.

window.fbAsyncInit = function() {
FB.init({
appId: ‘117218911630016’,
version: ‘v2.10’,
status: true,
cookie: false,
xfbml: true
});
};

(function(d, s, id) {
var js, fjs = d.getElementsByTagName(s)[0];
if (d.getElementById(id)) {
return;
}
js = d.createElement(s);
js.id = id;
js.src = “https://connect.facebook.net/lt_LT/sdk.js”;
fjs.parentNode.insertBefore(js, fjs);
}(document, ‘script’, ‘facebook-jssdk’));