Germany : The Furniture Industry
¡¾2002.12.27¡¿

"The European market with its 300 million people has been looking for a recovery since the Spring of 2001" - he said. Consumption is weak, exports have lost their previous dynamism, terrorist attacks have partly affected the general economic situation, while consumers are lamenting overall price increases.

In Germany 80 million people have the chance to buy furniture from stores with a total retail trade surface of 22 million square metres. Although per capita consumption of furniture in Germany still ranks first in Europe, the weakness of the local economy is resulting in "overcapacity", both of the furniture production and trade.

Total sales in the German furniture industry in 2001 reached Euro 22.3 billion, equivalent to 27% of the whole European market. One piece of furniture out of four in Europe is produced in Germany.

The overall weak economic situation with low consumption, a sluggish trend in residential building, and the increasing delocalisation of production resulted in a loss of jobs in the furniture industry (-5.1% in the first semester of 2002), a reduced number of productive units (-53) and steady growth in furniture imports.

During the past five years German imports of furniture from East European countries more than doubled, from Euro 1.4 billion to Euro 2.9 billion.

Germany's imports from Poland are higher than those from Italy. In fact, in 2001 German imports of furniture from Italy decreased by 17.5% in comparison to the previous year.
In the first semester of 2002 German furniture sales decreased by 10.1%, with a negative peak of -18.4% in May.

All segments were affected by this negative trend. In particular: furniture for living rooms, dining rooms and bedrooms (-16.6%), office furniture and outlet furniture (-12%), kitchen furniture (-7.7%), seating (-6%).

Furniture sales in Germany in 2002 are expected to contract by a further 8%. It is little consolation that at the end of this year Germans will have invested less money in holidays, cars, clothing and electronic goods.

Kitchen furniture producers expect marked drop in sales in 2002

German producers of kitchen furniture had hoped for a recovery of demand in the autumn but this did not happen. Even after the autumn fairs new orders were lower than last year and only a few manufacturers report some increase. A few companies reported improving orders in connection with Christmas sales, while most producers had to face a continual worsening of business.

This downward trend resulted primarily from the weak development of the domestic market. Export sales have been showing a more stable demand compared to the German market, although some markets, notably the Dutch and French markets, fell short of expectations.

European window demand could improve in 2003

According to the industry association Eurowinder based in Frankfurt, there will be no upturn in the European window market until next year. The association expects that this year's market volume will be more or less equivalent to the levlel of last year. In 2001 a total of 100.5 million window units were delivered, 2.5% fewer than in 2000. Total sales of the industry thus amounted to euro 38.5bil.

The association says that by the end of 2003, a slight increase in sales of around 1% could be seen, representing a total of 101.5mil window units. Sales in Germany, France, Great Britain and the Benelux countries are expected to be the most important for the industry, with roughly 15 million window-units each. The weakest development is still expected to be on the German market, while positive developments are anticipated in a number of Eastern European countries and in the Aegean.

A slight decline in sales is also expected in Italy and Spain in 2003. Increases in window sales are anticipated in most other regions, however. According to the association, growth rates vary between 0.5% for Russia and 5.6% for the Central European EU acceding countries Poland, the Czech Republic, Slovakia and Slovenia.

Eurowinder reports that average market shares of the various frame materials have shifted significantly once again during the last five years. The market share of wooden windows, in particular, has fallen to 29.7% (1997: 33.5%). In contrast, the market share of plastic windows has increased again to 41.5% (39.1%). Aluminium windows and wood/aluminium combinations recorded an increased market share and totalled 24.8% (23.4%) and 3.1% (2.5%), respectively. Greatly differing conditions are to be found from region to region.

Cologne International Furniture Fair

The next International Furniture Fair is to be held in Cologne from 13 - 19 January 2003. The theme "living ideas" will bring new concepts in an attempt to better face the weak economic scenario and the slowdown of the German furniture industry.

New concepts

It seems that the forthcoming Cologne 2003 will be different. New concepts have been introduced in order to improve the general impact of the fair, highlighting the central role of design and innovation, with the aim of raising the profile of the whole exhibition and offering significant added value to exhibitors, trade visitors and end consumers.

"Informed by cologne" is a platform dedicated to the hottest design trends in terms of to forms, colours and materials. The Trend Forum will also present trend advisors' predictions about interior decoration in the future.

"Inspired by cologne" is a meeting point for young designers, consisting of events like "Spin off" and "Future Point" and a special Nachlux Competition for innovative light design entitled "Atmosphere".

"Ideal house cologne" presents two stylised houses which will be furnished by two designers relying on selected products presented by the exhibitors.

"Interior innovation award cologne" is a competition open to all exhibitors at imm cologne, who can compete with a wide range of products. In its role as global business platform for the furniture sector, imm cologne will be placing even more emphasis on design in all its diversity .

Great emphasis will be put on another central event at cologne 2003: imm cuisinale.
The decision by the kitchen furniture sector to participate in imm cologne every two years in odd-numbered years will allow Cologne to have a well-timed international marketing platform in Germany.

Both the kitchen furniture industry and the manufacturers of high-quality built-in electrical appliances support the fair, which will be complemented by the attractive side event "Kitchens live", showing the lifestyle-oriented nature of the modern fitted kitchen.

International strategies

At Cologne 2003 (www.imm-cologne.de) there will be 1,350 exhibitors from 45 countries, with a significantly high international share of 65%. Some 200 exhibitors will be from Italy, thus confirming the leading role of Italian exhibitors at this fair.

In order to inform buyers from outside Europe of the two January furniture fairs, imm cologne and the Salon du Meuble in Paris have signed a joint communication agreement. Under this agreement press and PR work has been conducted jointly with a single message and image in mailing campaigns, advertisements and press conferences.

For the fast growing Far Eastern markets, imm cologne's policy towards future exhibitors focuses on identifying those local companies that play an important role on the European furniture markets. The recent opening of a KölnMesse branch in Singapore is moving in this direction. Two further openings are scheduled for Chicago and Milan, as further steps in the strategy of staying "close to the markets". Currently KölnMesse manages 40 exhibitions worldwide.

Company and market News

German market for tropical timber

Some weeks ago sales of Meranti seemed to almost collapse. The importance of tropical species in the German market has been slowing this year, a topic discussed by participants at the Foreign Trade Meeting of GD Holz in Hamburg. The latest import statistics of the two European trade associations, Union pour le commerce des panneaux (UCIP), and Union pour le commerce des bois durs (UCBD), both with headquarters in Brussels, gave proof of this development. In 2001 the eleven West European member countries of both associations reported a slight growth in imports of tropical timber by about.

Sales of tropical wood products in Germany are reprted to have fallen by 8%. In Germany, a downward trend was seen in imports of logs and sawn timber as well as imports of veneers and plywood. On an all-European basis, however, imports of sawnwood, veneers and plywood did show an upward tendency.

Currently the German market for tropical timber is rather subdued chances. EUWID reports that in the first nine months, business in sawnwood and in laminated Meranti scantlings from Southeast Asia had been rather satisfying but that six to eight weeks ago the situation has changed. Against a background of increasing availability importers are face a situation of reducing replacement cost prices and this, together with slow demand on the German market, is resulting in a difficult market situation.

Alno to strengthen capital base

Alno AG, a large German manufacturer of kitchen furniture, considers increasing its capital to strengthen its financial power. Talks with potential investors were already held, but a final decision still has to be made. At present, the Nothdurft family owns 60.2% and Commerzbank owns about 30% in Alno, which has been facing serious problems for years. Alno is on a cost and job cutting course to return to the black.

Pfalzmöbel suffers

German office furniture producer Pfalzmöbel GmbH, which had raised its turnover by 4.2% to US$ 28.05mn in the financial year 2001, expects its turnover 2002 to drop by 20%. This was mainly due to the difficult situation on the German office furniture market and to the effort to maintain its site in Bad Schönborn.

Egger logistic plans

German based wood materials producer Egger, has together with its logistics partners developed the container shuttle Baltic Train which is to transport goods from the Wismar location to Hamburg-Waltershof. The company, in its logistics, is increasingly concentrating on rail and sea transport.

Source:ITTO