The Russia-Ukraine conflict has intensified and the Polish furniture industry has suffered a major impact!

Recently, the conflict between Ukraine and Russia has become increasingly intense. However, Poland's furniture industry relies on neighboring Ukraine to provide abundant human and natural resources. Currently, the Polish furniture industry is evaluating how much impact it will face in the face of escalating tensions between Russia and Ukraine.

One tenth of the workers in the Polish furniture industry come from Ukraine

Poland is currently the second largest furniture producing country in the world after China, with exports approaching $14.2 billion in 2021. Although most of Poland's products are exported to Europe, the total value of furniture products exported from Poland to the United States in 2021, including wooden bedroom furniture, kitchen furniture, and upholstered furniture, exceeded 343 million US dollars, an increase of 46% compared to 2020. In the past few years, furniture factories in Poland have relied on Ukrainian workers to fill job vacancies. At the end of January this year, Poland also revised relevant regulations to extend the period for Ukrainians to hold work permits from the previous six months to two years, which can help increase Poland's labor reserves during periods of low employment rates.

At present, there are 200000 employees in the Polish furniture industry, and Tomasz Wiktorski, CEO of B+R Studio, a Polish furniture market analysis company, estimates that at least 10% of them are from Ukraine. However, due to the recent situation, men aged 18 to 60 are no longer allowed to leave Ukraine, and many have returned to Ukraine to participate in the war, leading to a continuous loss of labor in the Polish furniture industry. According to Tomasz Wiktorski, approximately half of the Ukrainian workers in Poland have returned to their home countries. Tomasz Wiktorski stated that one option to fill these job vacancies is to leverage Poland's growing immigrant population, mainly from India, Nepal, Vietnam, Malaysia, the Philippines, and some African countries.

Another option is to divert labor from the hundreds of thousands of refugees who have flooded into Poland from Ukraine, but the refugees are mainly women, children, and the elderly. TATFA, headquartered in Warsaw, mainly promotes Polish furniture in the US and Canadian markets. Michal Blonski, the managing partner of the company, said: "Polish factories are now assessing the current situation and the possible impact. We should see that the Polish labor market may change because Ukrainian men choose to stay in the country. On the other hand, we also need to start recruiting new employees and provide them with some employment training." Ted Weik, CEO of Skyline Furniture Ted Wecker holds the same view. He stated that 5% to 15% of the workers in Polish furniture factories are Ukrainian. As some return to their home countries and others form families in Poland, Ukrainian workers in the industry continue to leave, but there is always a influx of new people.

The Russo Ukrainian War Affects the Supply and Price of Raw Materials

Ted Wecker started purchasing components from Poland about three years ago as a substitute for Chinese products. He also imports furniture components from Ukraine. He pointed out that so far, factories in Poland and Ukraine continue to operate, and products shipped from Ukraine are transported by truck to Poland and then from Poland to foreign countries. However, Tomasz Wiktorski and Michal Blonski both raised their concerns about resource constraints.

Michal Blonski believes that although Poland's wood comes from domestic sources as well as neighboring countries such as the Czech Republic and Slovakia, the wood used in furniture production mainly comes from Ukraine and Belarus, and Belarus supports the Russo Ukrainian War, which will bring certain problems to the import of wood.” We can see that there has been a disruption in the supply of wood to factories located in eastern Poland near the border, "Michal Blonski added.

Ted wecker also pointed out that the price of particle board materials has risen. According to B+R Studio's estimate, 7% to 10% of Poland's wood-based panels and their parts, such as solid wood, particle board, MDF and HDF, are imported from Ukraine, Belarus and Russia. “It is no longer possible to import these materials now. Obviously, the Russo Ukrainian war has affected the supply of raw materials and will also affect material prices, "Tomasz Wiktorski added.

Polish furniture is likely to take advantage of this expansion, and other EU furniture producing countries that have trade with Belarus, Russia, and Ukraine are also facing the same supply problems. Nevertheless, Poland's furniture industry still has the opportunity to expand in Europe and other places. Part of the reason is that Ukraine's domestic furniture production may also be affected by the ongoing war, and Belarus and Russia face trade sanctions. Therefore, Tomasz Wiktorski said, "Western furniture importers, including furniture component importers, may shift some of their business to Poland. Leaving aside the potential impact of inflation, the Polish furniture industry's GDP and production are expected to increase by 8% and 6% respectively this year. Many manufacturers from Russia, Belarus, and Ukraine will be unable to supply to the EU, so many Polish suppliers are receiving inquiries from EU countries.”

Meanwhile, Michal Blonski also believes that as new refugees from Ukraine arrive in Poland and settle there, the demand for local furniture market may increase by 10%. “I think everyone is paying attention to the situation in Russia and Ukraine right now, and things happen every moment, and Poland is at the center of the explosion, "Michal Blonski added.