"Even in a challenging time for our business, we have been able to complete strategic projects that lay a solid foundation for increasing our competitiveness in global furniture markets. Last year's investment in SBA Furniture, which was 1.5 times higher than in 2021 and amounted to €72 million, was the largest in the history of the SBA Group. Most of it was invested in the two now operational factories - Inno Line and Kauno Baldus. We are not stopping after the completion of these projects and have decided on new strategic projects which we will take up as soon as the economic situation improves," says Egidijus Valentinavičius, Vice President of SBA Group.
According to him, the war in Ukraine, soaring energy and raw material prices, rampant inflation and slowing real estate and furniture markets have dampened the optimism that prevailed at the beginning of the year. The Mebelain factory, which should have reached its maximum capacity last year and its highest revenue ever, had to be shut down. With the raw material markets closed due to the war, a focused team quickly found new suppliers and aligned supply chains. However, this made the cost of the products more expensive, and as the demand for furniture shrank, so did production volumes and profitability.
In 2022, SBA Home group companies sold 9% more furniture. Inno Line, which started operations last year in the SBA Industrial Innovation Valley near Klaipėda, generated revenues of almost EUR 122 million. Klaipėdos baldai sold EUR 119.6 million worth of products last year, 39% more than in 2021. Visagino linija increased its sales by a tenth to almost €92 million. Šilutės baldai sold EUR 51.6 million last year, a sixth higher amount. Mebelain, which stopped mass production in the spring, sold €19.7 million worth of furniture. Kauno Baldai, which was closed for a month due to a fire and moved to a new factory, saw its sales fall by 14% to almost €24 million.
"We expect this year to be a year of recovery. The demand for furniture is gradually stabilising and is no longer dropping significantly. We expect buyers to return to larger purchases in the second half of the year. Therefore, our main objective at the moment is to continue to increase our production efficiency and to compete successfully for new products. Of course, the industry's future performance as a whole will depend on the dynamics of the war in Ukraine, changes in energy and raw materials, inflation and interest rates," Mr Valentinavičius predicts.
SBA Group operates in the furniture, textile, real estate and investment management sectors. It exports its products to 50 countries worldwide, with consolidated group sales of EUR 404.6 million in 2021.
