Norway’s Torpe chooses Poland over Lithuania26.10.2011, 13:59
Norwegian Torpe Møbelfabrikk, a family-owned producer of living room tables and chairs, had plans to move production to Lithuania, but the plan fell through due to disagreements with Lithuanian partners, writes news2biz.
The Norwegians have now eventually relocated to Poland and Ukraine.
Torpe Møbelfabrikk wanted to produce in Lithuania under the roof of Venta-Torpe, a 51/49 joint venture with one of the numerous subsidiaries of Neaustiniu medziagu fabrikas.
The latter is known for successfully partnering with several Scandinavian manufacturers
to help them move labour-intensive production to lower-cost Lithuania.
"The main obstacle to our cooperation was the high renovation and maintenance cost of the premises that we wanted to lease for Venta-Torpe," says Tore Torpe, general manager of the Norwegian firm.
"The premises belong to Comco, a joint venture between NMF and their Swedish partners, and it was a disagreement with the Swedish co-owners that eventually led us to drop Lithuania altogether."
NMF's owner and CEO Stanislovas Grusas told news2biz that yes, the renovation cost was one of the reasons for parting with Torpe, but would not comment further.
Torpe Møbelfabrikk is now moving production to Poland and Ukraine.
Meanwhile, the premises that were eyed by the Norwegians are now occupied by Sintuva, an upholstered furniture maker and member of NMG group.
NMF is also about to start producing polyurethane foam for mattresses, furniture, etc. at NMF Porolon, this time without any foreign partners.
"Today, the company is only cutting produced foam to size for customers, but in a few months we plan to start production. Expected output will average 500 tonnes per month, and it will be sold to NMF group firms, other buyers in Lithuania as well as exported," Grusas says.
NMF now employs 1,600 staff in Lithuania plus 100 in Ukraine. "A year ago we were 450 people less, so we are growing quite fast. Monthly group turnover averages LTL 36m now.”