After great difficulties, Narbutas is building a new factory: he is investing 25 million. Eur, will create 50 jobs

Orders fell dramatically, with about 200 workers laid off

According to Petras Narbutas, founder and CEO of the group of companies, the pandemic hit the office and office furniture markets hard, causing the group’s sales to decline. 2019 Sales revenue for Narbutas International and Narbutas Lietuva companies amounted to LTL 98.8 million. EUR, and last year amounted to 93.4 million. EUR.

“At the beginning of the pandemic, orders had fallen dramatically for several months and we were down. We don’t have long-term contracts, we received orders and we fulfilled them in 2-3 weeks or a month. But we were prepared for the crisis, we fixed it and then the orders came back. Clearly, there are no figures that we have strategically planned. Now we are back to the level of 2019. I would say that we are working normally, waiting for everything to finish and growing as we have done for the last 10 years “, says P Narbutas.

When orders fell, some of the staff at the Narbutas International production company had to be fired. Like it shows Rekvizitai.lt Sodra data was provided, the number of employees decreased from the end of March to mid-August last year, the total change was about 200 employees.

“Because we have been growing by more than 30% for many years, the number of people has focused on the assumption that we are growing and will continue to grow. Because we fell, we had to reduce the number of people in the plant. manufacturing and we did not reduce the sales capacity. Now that number has stabilized “, says the manager.

Difficulties due to supply chains and logistics

The furniture maker is also struggling with a fragmented supply chain: “One raw material is missing, it’s another, one supplier is closed due to a virus, another has logistics problems.”

Mr. Narbut assures that the virus did not enter the production plant, which is why it was completely stopped, as strict security measures have been taken since the beginning of the pandemic.

“We reacted to the virus immediately, we bought a thermal imaging camera, nobody could enter the factory without measuring the temperature, as well as the disinfectant. Despite the fact that Ukmergė was “burning” on the map of Lithuania from the beginning, the company did not suffer much, we did not have a spread in the interior. If there were a few, it was from abroad. At the moment, Ukmergė looks good, and so do we. Now there are two sick workers who will go back to work in the near future and we will not have any sick people in the factory, ”he says.

Narbuto is one of the main export markets in the United Kingdom (UK). In terms of export volumes, this country ranks first, with 12-13 percent. sales, but France and Germany are also lagging behind. Asked if the Brexit group was in difficulties as a result of the incident, the interviewee assured that there were no major problems.

“Our local partners in the UK have a bit more problems. We have more problems with logistics. Trucks don’t have loads from England, it’s harder and more expensive to find machines, but all (difficulties – Delphi) has. England is still in first place, although France has been for several years climbs to his feetGermany is also growing rapidly, we didn’t have a drop there last year. In Germany, growth has offset the decline, so perhaps the country will soon be in first place, “says P. Narbutas.

It invests its own LTL 25 million in the new plant. EUR

Despite the difficulties, Narbutas is investing in development this year. In Ukmergė, a new 21.8 thousand. kv. m factory building. 25 million are invested. Eur’s own funds will make it possible to expand the existing 36.6 thousand. kv. m of surface area and increase the production capacity by 2.5 to 3 times.

According to the head of the group of companies, the pandemic has affected the economies and businesses of the countries, but the consistent strategy of the company – a wide network of commercial partners and exports to different countries of the world – allows us to look to the future. optimistically.

“We are currently in a stable situation and we believe that perhaps next year, when the pandemic is under control, our sales and production volumes will increase again. That is why we want to use this time for development,” says P. Narbutas.

According to him, the group of companies had been preparing for the new plant for a long time: “When the pandemic started, we stopped rushing. But I said we’ll do everything right and when we can hit the start button. We reached it in February and we have a goal of completing the project in the fall, because a lot of preparation has already been done. “

The new project is an extension of the same plant that operates in Ukmergė in the same territory, so, according to the interlocutor, there are no major challenges. Narbutas also points out that own funds are invested, not borrowed funds.

“The investment itself is considerable. We invest our funds, both the ones we have accumulated and the ones we plan to earn during the year.

Because we had a painful lesson in our history, I believe that you need to borrow as soon as you start a business, you are a young business. Like families, young families have to take out credits when they mature, they should no longer take them, ”he says.

Production is scheduled to begin in the fall.

The new factory building will be equipped with technologies that will ensure a more efficient production process, an even higher product quality and will allow the market to offer new office furniture, expanding the categories of upholstered, acoustic and non-standard furniture.

The construction of the new plant is expected to be completed in August this year and the introduction of the first technologies in September. The manager ensures that the plant must be built on time and without problems. Narbutas chose his neighbors, Ukmergės statybą, as general contractors.

“We choose between all, but in the end we choose Ukmergė statyba, our neighbors. We know the situation, we communicate, we keep in touch, we support. If there are problems, we adjust the payments. I believe that everything will be built on time and without problems”, He says.

Plans for further development

Narbutas plans to triple its sales in five years. Currently, the Lithuanian group of companies sells around 3 to 4 percent. production, this share will continue to decline as volumes increase in the future.

According to P. Narbutas, the group of companies has other stages of development planned, but it is not yet possible to speak specifically about the current pandemic situation.

“During the pandemic, most people found that working from home is not bad at all, I think we will not be in a hurry to expand the office ourselves, some employees will continue to work from home. Consequently, offices will require fewer jobs and space. This means that the market both percentage and contraction.

It’s hard to say how much we will be able to compete and grow in that shrinking market when we’ve always outgrown the market. Plans will need to be reviewed. So far, I am optimistic about the way we are doing now in the conditions of a pandemic and therefore we are not going to stop the development, ”says the manager.

It will create fifty new jobs

Along with the ongoing production development, new jobs will be created for the residents of the Ukmerg región region. The construction of the new factory building is expected to employ around 50 workers. According to P. Narbutas, finding such a number of employees in Ukmergė is not a problem.

“When they ask me how many jobs we will create, I always say: why for whom? How many of them will be robots, how many of them will be humans. The process takes place in two directions. We are expanding our sales and production as our sales grow. jobs. On the other hand, we buy newer and more efficient equipment, we replace people with robots. We use robots not only in production, but also in all processes: management procedures and accounting.

If we aim to triple our turnover in five years, it is difficult to say whether we will increase the number of our employees by 50% or by 70%. It will largely depend on how successful you are in robotics. Today, we estimate that 50 jobs will be created, ”says P. Narbutas.

According to the interviewee, it seems that furniture manufacturers and carpenters should work in a furniture factory, but generally simple workers or computerized machine tool operators are needed. “For such an operator to be good, every motivated young man befriends the screen faster than after graduating from three high schools. Therefore, we have no problem in training them to work with the machine. It is enough for us to have healthy, motivated people, we train them, we create all the conditions to work ”, he assures.

One of the most sought-after employers in the district.

According to Sodra, the average salary of Narbutas International in January of this year amounted to 1.79 thousand. EUR before tax and the median amounts to 1,371 thousand euros. EUR. However, according to the manager, salary is only one component of motivation, so it doesn’t have to be that important.

One of the largest employers in the district implements several additional motivational measures: it provides personal health insurance, bonuses based on company performance, the opportunity to improve grades in international trainings or exhibitions, and other competency development programs.

“People want to work for us, first of all, because of how they feel, in what environment they work, under what conditions and what kind of salary they receive. Our salaries are competitive, in addition to those salaries, employees receive many other conditions that are better not only in Ukmergė.

When there were no employees left, only then did we start to run out. While there are still employees in Ukmergė, they will come to us. You could say that we are expanding and hurting other companies by pulling employees out of them, but I think other companies understand that we are not competing with each other for employees. We compete with the emigration of workers.

Our goal is that wages, quality of life and work are such that they are happy to return. Foreign languages ​​are needed in our administration, where customer service specialists work. I would say that there is no employee who has not lived and worked abroad ”, says P. Narbutas.

“I am not afraid that there will be no employees in Ukmergė, they will return to Lithuania,” he adds.