Steelcase plans to produce furniture in Romania

Steelcase currently sells office furniture in Romania through its local branch, created in 1995, and through a partnership launched in 1997 with an exclusive dealer, Corporate Office Solutions. 

“We are interested in acquiring a local producer in a year or two, but this producer must have a regional distribution network,” Steelcase Sales Manager for Central and Eastern Europe, Marc Nicolaisen, told Business Standard. He said the company would rather buy a factory than make a greenfield investment, “because it is faster”, he added. Nicolaisen did not say if the company is already negotiating with a local furniture producer, but said Steelcase is ready to pay between $5-20 million (€3.7-15 million) for a factory. 

The company’s experts have been studying the markets in the region for some time, but have not made a firm decision about the country where they want to start production. Besides Romania, other countries being considered are Poland, Hungary and the Czech Republic. According to Nicolaisen, the advantages of producing furniture in Romania are low production costs and the rapid pace with which the office furniture market is developing. However, Romania is disadvantaged because local companies lack regional distribution networks. 

Steelcase clients in Romania include banks and multinational companies, such as Société Generale, ABN Amro, Citibank, Orange, Vodafone and Cosmote. The banking, IT and telecommunications sectors are the most dynamic in Romania and are the best clients for office furniture, according to Corporate Office Solutions officials. The company, which posted net sales worth €14.5 million in 2006, targets a 10-15 percent increase this year, in line with the development of the market.
Furnishing an office with Steelcase furniture costs an average €800, according to Corporate Office Solutions Manager, Christophe Weler. Companies allocate some €500 for an employee’s office and about €1,000 that of a manager. The local office furniture market is estimated to be worth €60 million and is expected to increase by 10-15 percent in 2007.