Uniqueness of Kaliningrad furniture industry
The Kaliningrad furniture industry is unique due to few reasons. Arisen in the beginning of 90s, all private furniture business was turned into resale of furniture from Poland. Overall, it has been caused by favorable conditions Kaliningrad Special Economic Zone, neighborhood to European manufacturers of furniture, raw materials and accessories. Existence of these preconditions promoted rapid development of a great number of the independent business structures focused both on internal and outward markets. Were having two furniture factories only in the Soviet times this region has the geography of furniture manufacture that covers all the area nowadays. Export of Kaliningrad region makes more than 7 % of all Russian furniture market. Approval of Special Economic Zone law in 1996 became powerful stimulus of development of furniture manufacture in region. The most effectively working block of the SEZ law is the mode of a duty-free area. It allowed to transform a domestic industry into high-grade sector of industrial production. Started with primitive furniture assembling from imported semi-finished parts, Kaliningrad manufacturers have entered onto Russian mainland market with quality production. The Kaliningrad furniture production has been awarded with numerous diplomas and medals.
Indubitably the last years in Kaliningrad has been developing high-grade industrial cluster, which consolidate:
Largest companies which produce end-product
Manufacturers of semi-finished products
Raw materials suppliers
Kaliningrad manufacturers formed exceptional competitive row of goods. It is necessary to note considerable processing of imported raw materials.
Owing to compact structure local factories are able to react to market inquiries. That also explains absence of narrow specialization of companies and a variety of production nomenclature:
Furniture for kitchen
Furniture for a bathroom
Solid wood furniture.
Kaliningrad Furniture Association.
12 years of operational experience
The major task was formed in beginning as protection of interests of the furniture companies entering into the partnership. Nowadays Association includes more than 50 companies, being institutional organization which represents the Kaliningrad furniture industry.
Goals and purposes according statute are:
• Coordination of enterprises’ activities, elimination of unfair competition;
• Representation of producers interests for federal, regional and municipal authorities;
• Organizational, juridical and other help to members of Partnership
• Mobilization of investments;
• Assistance in expansion to commodity markets;
• Assistance in development of well-skilled human resources
The most important task determined for KFM directorate for the nearest future is maximization of Kaliningrad furniture expansion to outward markets.
Peculiarity of local market
Development "from zero level" is one of key features of the Kaliningrad furniture branch. Enterprises either were reconstructed from old industrial premises or were newly constructed. Heads of companies were guided with intuition. Were visiting factories and exhibitions personnel assimilated the European experience. Consolidating small and medium size enterprises this branch of industry reacts flexibly to occurring changes.
Notwithstanding, many factories are high-grade complexes, covering a considerable part of a production cycle. Prompt saturation of local market has caused necessity of reorientation on other regions of Russia. Distribution of goods to mainland Russia gives 85 % of regional furniture sales.
Commodities distribution structures were developed with production progress simultaneously. Manufacturers have possibility to develop an own retail networks with regional representatives and wholesale warehouses in territory of Russia or trade work with dealers and distributors accordingly contracts. Concentration of factories causes a strong competition both on internal and on external markets. On the other hand, there is researching of new commodity markets and partial reorientation to consumers in the CIS countries.
Owing to supplementary SEZ certification system and effective quality control the percentage of rejects is insignificant.