Market challenges to be managed through price stabilisation solutions
In the second quarter, the company grew sales by 10%, from EUR 7.2 million in 2021 to EUR 7.9 million in 2022. According to the company’s CEO, Tomas Mauricas, the main contributors to the growth were long-term partnerships with reliable customers and the addition of new customers, whose orders continue to grow.
„The second quarter results were also driven by overcoming challenges that have been ongoing for a long time. Raw material and energy prices, as well as the disruption of logistics chains, are keeping the markets on their toes. However, we are monitoring a correction or at least a stabilisation of raw material prices. By addressing the challenges of raw material prices and shortages, we have been able to find alternative suppliers for eastern producers. The challenges of transporting goods have led to the reorganisation of transport lines and the logistics chain, but we have found exceptional solutions that are helping stabilise prices,“ says T. Mauricas.
The company continues to consolidate its market position in Germany, with Kauno Baldai’s products available in the largest furniture retail chains in the country. In the first half of the year, Germany was the market that grew the most, with more than 17 per cent of exports. The company’s other major markets remain the Benelux countries, where its position will be strengthened by the supply of higher-end furniture made from natural materials.
Focus on production renewal and new customers
In the second quarter, Kauno Baldai completed the first stage of its new factory, moving part of the production facilities and departments to the new building without interrupting production processes. However, a fire that broke out on the factory in July changed the plans for the second half of the year. The team was about to move an even larger part of the production to the newly completed building, but the fire and the damage it caused to the remaining equipment in the old building forced a change of plans.
„We are working hard to get the factory back up and running as soon as possible. We have brought in both internal and external experts to assess the consequences of the fire, checking the equipment, its operation and safety. Our priority is to ensure that the team can work safely with equipment that is in good working order and undamaged. That’s why inspected and safe equipment is transported and installed in the new building. We are also ordering equipment that has been irreparably damaged – we are talking to suppliers so as to speed up delivery times,“ says T. Mauricas.
According to him, Kauno Baldai’s assets, including the equipment used in production, have been insured and the specific damage caused by the fire is still being assessed.
Currently, due to the accident, the team plans to partially resume the factory’s operations as of September and to reach the former production volumes in the last quarter of the year. According to the head of Kauno Baldai, these circumstances will have an impact on the results of the second half of the year.
The geopolitical and economic situation around the world will also have an impact, therefore, according to the CEO, the team’s priority will be to work with existing partners and search for new customers. To this end, new collections of upholstered furniture tailored to specific markets are constantly being developed and presented.
