The year 2023 has come to an end. How would you sum up this year for Melaco and for the furniture industry as a whole?

The assessment of 2023 depends on the perspective from which we look at it. If we focus on a simple indicator such as sales volume, it was a very successful year for Melaco. We recorded a 20% increase in sales compared to the previous year, which means that we not only met our budget, but exceeded it by 3%. These results reflect the positive situation in the company as well as the increased interest in our products in the market.

Given that rising production costs are a challenge for many companies in the furniture industry, what strategies is Melaco using to meet this challenge?

In order to cope with rising production costs, we need to become more efficient. Last year we carried out an operational audit of our production to identify and implement measures to increase efficiency. Some of these measures were already implemented in the fourth quarter of last year, with initial positive results. Other planned initiatives are currently being implemented. Our goal is to use our current capacity and resources to increase production, which will allow us to reduce our unit costs. In the first half of this year we will carry out a follow-up audit to assess the effectiveness of the measures implemented. However, we already know that working to increase productivity and production efficiency is essential to meet rising costs. In addition, we are focusing on finding sales opportunities that offer higher margins, which is also an important direction for our activities.

How did the rest of the furniture industry fare in 2023? Did other companies experience similar growth or was the market situation more diverse?

The picture of the furniture industry in 2023 is quite varied. Although the official figures for this year have not yet been published, discussions with our contractors confirm this trend. Some companies, like us, have seen significant increases, sometimes even more than we have achieved. But there are also companies that have no reason to be satisfied with last year.

An example of the problems in the industry is the situation of FORTE, a well-known furniture manufacturer with more than 30 years’ experience, which has been widely reported in the media. Although some reports were exaggerated, there is no doubt that they reflect the situation in the furniture industry.

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On the other hand, IKEA INDUSTRY, the largest manufacturer in the sector, has announced that it has no plans to invest in capacity expansion in the coming years. This suggests that there is not enough demand to justify such action.

The conclusion to be drawn from these observations is that it is becoming increasingly difficult to conquer the furniture market by simply increasing the volume of products produced. It is now increasingly important to focus on quality and to look for opportunities to offer higher quality products. The low-cost furniture market seems to be saturated, and the future belongs to brands that offer higher-quality products with higher margins on sales.

Given the changing trends and market needs, what innovations has Melaco introduced in the past year to meet these changes?

At Melaco we have focused on identifying and responding to current market trends. Last year we noticed a decline in interest in glossy boards, which is indicative of changing consumer preferences. In response, we have focused our activities on segments that have shown significant growth. For example, we have seen an increase in sales and production of lamella fronts, which are now very popular, as well as finished, complete and packaged products such as furniture and furniture components.

One of our key developments has been our proprietary Micro Milling™ technology, which we have developed and implemented and which has been well received by the market. We are currently working to improve this technology to better meet our customers’ needs. Our ability to sense the market and our flexibility in responding to changing needs allows us to introduce innovative products and technologies that strengthen our competitive position in the market.

What are Melaco’s plans for 2024? Can we expect further growth and what developments are you prioritising?

We have set an ambitious sales growth plan of more than 10% for 2024. This is a challenge in the current economic climate, but we believe it is a realistic and necessary target to achieve. We are currently focused on preparing for a major investment. Discussions and negotiations with technology suppliers and on the financing of this investment are ongoing. This year we will have to make decisions on the implementation of this investment, which will be a key part of our business.

In terms of sales, we are seeing an increase in customer demand from abroad. We plan to increase our sales abroad, although the outlook for the Polish market is also promising. There are signs of increased demand for consumer durables, including white goods and furniture. The growing purchasing power of consumers in Poland and rising wages, including the minimum wage, may contribute to an increase in demand for our products in the country, in parallel with growing exports.

We have also acquired new customers, which may contribute significantly to an even greater increase in sales than we expect. All this means that 2024 promises to be a period of intense growth for Melaco, and a further strengthening of our market position.

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