Analysis of the Ukrainian furniture industry 2024

LIGNO responded to the study "Analysis of the Ukrainian furniture industry in the context of a full-scale war". The study is aimed at analysing the state of the Ukrainian furniture industry, in particular the wooden furniture segment, taking into account the existing challenges and prospects.

The purpose of the study is to provide comprehensive information on the current state of the market, statistics and opportunities for the development of the furniture industry, with a focus on wood products.

General overview

The Ukrainian furniture industry has undergone significant changes over the past few years. Furniture exports have consistently exceeded imports, due to the availability of large stocks of wood and wood processing capacities.

According to the State Customs Service of Ukraine, exports of furniture products increased by 8% from 2018 to 2023, reaching USD 786.49 million in 2023. However, with the outbreak of the full-scale war, imports fell by 46%, while exports decreased by 23%.

The amount of exports and imports of furniture products, million USD

Exports

Europe remains the main export region, accounting for 96% of all furniture exports at the end of 2023. The largest consumers are Poland (29% of exports), Germany (21%) and Denmark.

However, exports to Asia and Africa decreased threefold and twofold, respectively. Despite the war, exports to the United Kingdom, Bulgaria, and Switzerland increased.

Share of exports of the main countries to which Ukraine exports furniture products in the total exports of the furniture industry

Imports

The main regions of imports are Asia and Europe. At the beginning of the full-scale war, Europe was the top import destination, but in 2023, Asia became the leader.

China remains the main importer of furniture products to Ukraine (55%), followed by Poland (11%). Other exporting countries, such as France, are showing an increase in imports every year.

Share of imports from the main countries from which furniture products are imported to Ukraine in total imports

Production of wood products

Ukraine has significant opportunities for the production of wooden furniture thanks to its natural resources. Wood is a key input for the furniture industry, and this is reflected in the large volume of wood products produced. In particular, a significant part of production is exported, which helps to reduce the trade deficit.

Statistical data

– Exports of wooden furniture: Over the past five years, exports of wooden furniture have increased by 40%, reaching USD 1,051.11 million in 2021. However, in 2023, these volumes declined to USD 786.49 million, down 2% year-on-year.

– Imports of furniture: In 2023, imports of furniture products amounted to USD 354.96 million, down 46% compared to 2021. This trend is due to a decrease in demand for imported furniture in times of war.

– Targeted imports: lamps and other lighting equipment account for 30% of all imports to Ukraine. The main suppliers are China, Italy, Poland, Spain and Germany. For example, 70% of all imported lamps and lighting equipment come from China.

Status of economic activity of legal entities

Supply of raw materials

Ukraine's furniture industry is partly dependent on imports, although the main material, wood, is sourced domestically. This does not always ensure a competitive price, as corruption and illegal logging make the market opaque. Legislative restrictions create an artificial shortage of raw materials, which leads to increases its cost for entrepreneurs.

Another key material is chipboard, which is produced by three companies in Ukraine, meeting domestic demand. However, up to 50% of imported inputs, such as chemicals and laminating paper, are used in the production of chipboard, reducing the share of Ukrainian raw materials to 50%.

Challenges for the furniture industry

The furniture industry in Ukraine faces several challenges. The main challenges facing the furniture industry in Ukraine include:

– Corruption and illegal logging: this makes the timber market non-transparent and creates an artificial shortage of raw materials.

– Full-scale war: significantly affected the volume of exports and imports of furniture products.

– Import dependence: a significant portion of materials and components for furniture production are imported, increasing dependence on external suppliers.

– High competition in foreign markets: Despite the high quality of Ukrainian products, competition from other countries remains a serious challenge.

Nevertheless, due to significant wood reserves and processing capacities, there is room for further development and expansion of wood product production.

Why support for the furniture industry is important today

Ukraine's furniture industry has significant growth potential, thanks to the availability of natural resources and production capacity. However, challenges related to corruption, illegal logging, import dependence and war require further efforts to stabilise and develop the market.

LIGNO is committed to promoting transparency and efficiency in the use of wood resources, as well as expanding export opportunities for Ukrainian furniture products.

Let's contribute to a sustainable future together!