The Swedish furniture manufacturer IKEA launched its biggest Russia-based furniture factory worth 4 billion rubles (~EUR 55.1 million) on September 7, 2016, reports press-center of the Novgorod Region government.
Back in 2013, IKEA commissioned a chipboard plant, that is located in the vicinity of a new factory. Over the 3 past years the company has realized the first stage of the plant project in question. Sanded and laminated boards manufactured at this site are mainly supplied to the domestic market and the CIS-countries, but also to Italy, Slovakia, Poland, Israel, China, Canada etc.
The new furniture factory is the most large-scale investment project IKEA has implemented in Russia so far. Total investment came up to approximately 4 billion rubles, or about 55.1 million euros.
"This investment is crucial for ensuring the optimal supply chain and represents an inevitable condition for IKEA's further growth on the Russian market," commented Leif Hultman, IKEA Industry's CEO.
The factory's maximum capacity comes up to 7 million product items per year. The factory will manufacture PAX wardrobe frames and METOD kitchen frames. Together, IKEA's particleboard plant and furniture factory provide 500 job positions.
As it was highlighted in the press-release, the geographical position of the new factory also plays a significant role. It is situated not far from Moscow and Saint Petersburg which are key end markets in Russia. The short distance will allow to reduce transportation costs and СО2 emissions.