The furniture manufacturer has been overcome by the crisis, but there is a challenge: it can pay more than 1,000 euros, but no one is going to work

The furniture manufacturer has been operating since 2003. During this period, the company significantly expanded its production capacity and volume: if initially around 40 bedroom and living room furniture were produced per week, now 70 per day.

Does not compete with major manufacturers

NS2 manufactures the furniture itself, so the production and sale rights belong to the company itself, which has its own individual customers and its own collections. That is why the company does not compete with the major furniture manufacturers, as most of them produce furniture for the Swedish giant Ikea.

According to NS2 shareholder Laurynas Noreika and production manager Gintaras Michalkevičius, there is currently no competition in the furniture industry, because everyone has a job and no one to compete with.
Oak furniture previously dominated production, but because wood is more expensive, up to 20 percent is now used.

“Oak became very expensive, sometimes, so the furniture had to be expensive twice. The customer was not willing to pay that much, so he buys a cheaper one, from the board,” says L. Noreika.

Now the raw materials used in the production of furniture are not Lithuanian, the company buys wood from Lithuanian companies, intermediaries, who mostly import raw materials from Poland, and the paint comes from Germany.

Deadlines have doubled

Almost all products made in Lithuania go abroad, mainly to the UK. Only 1 percent. falls on the Lithuanian market. Currently, the pandemic has significantly extended production lead times.

“We received the order, we tried to fulfill it in 5-6 weeks, but now we are late, it takes 10-11 weeks. The number of customer orders is greater than we can fulfill, in addition, we still have problems with people”, notes G. Michalkevičius.

According to him, during the first quarantine, production stopped, employees were in downtime for 2-3 months, even this year the work of the company had stopped, but in the spring things changed quickly.

2008 I did not feel the crisis

According to the company, there have been periods when there have been no orders for 18 years, but most of them are believed to have done quite well. The legs did not stand up even in 2008. crisis, and this year was one of the best for the furniture manufacturer.

“2008 we did not feel the crisis. Everyone had it and we were overlooked because we were working with the English market. Although it may not be possible to say, but when there is a crisis in Lithuania, it is very good for us; then there are the It is important to us that there is no crisis only in England.

It was much more difficult for us to survive Brexit and its consequences, because it was the depreciation of the pound, we had to raise prices to compensate for the losses we suffered. We had more challenges with English politics and economics. And Lithuania’s politics and economy have an impact on labor and raw material supply problems, ”says the company’s shareholder.

Brexito raised prices twice

„Brexites affected only in terms of price and additional procedures. We have to spend extra money, perhaps not so much to handle all the customs procedures, declarations, etc. This year we have already raised product prices twice, in March and September, but we cannot raise furniture prices as fast as raw materials. they become more expensive for us ”, explains the guide.

“We are forced to increase them, because the challenge today is not to sell, but to deliver the product to the customer and meet the obligations for orders already received, without incurring losses, because raw materials become more expensive at times. And we have to sell according to the price specified in the contract, we try to negotiate a bit ”, adds L. Noreika.

Profits are constantly screwing things up

NS2 currently has about 100 employees. As in all of Lithuania, there is a severe shortage of employees.

“There is a long way to go. We would accept at least 10 at a time.” He is having a hard time with the employees who come from the Employment Service. We call them migrants, temporary. Long-term cooperation with them is not possible. Profits constantly screw things up, ”says G. Michalkevičius.

“I have been working here for 15 years, I know the employees as peeled. Very simple: husband or wife goes to the Employment Service, 9 months. Receives money, the old man still brings free firewood, children can still receive free lunch at the school – many privileges. Another big problem is that people have a lot of debts. Our record holder is 13 or 14 bailiffs. He says, “It’s not worth working because I’m going to deduct the full salary. And they don’t think about the debts that we will still have to give away ”, he adds.

Can’t find employees for 1000 euros or more

Recalling that employees often complain of underpayment, the production manager assures that, even with the 1,000 euro payment, no employees can be found.

“We can certainly pay higher wages, but a person has to live up to expectations. If a person only manages to stand in front of the machine and expects to earn a lot, he cannot pay that much. We have a lot of jobs, we can pay 1000 euros or more, but nobody goes to work ”, emphasizes G. Michalkevičius.

“We have people working for 1000 euros. We still want to accept, but we cannot find qualified employees. They want to stop at the machine, do nothing and receive a thousand euros, but in production it is organized like this: part of the workers must be qualified, part auxiliary. There is a problem with the latter.

There is no motivation to receive 50-100 euros more per month (than the allowance – Delphi) and work. You are motivated not to work and receive benefits. After 9 months. He comes to work for a short time, for a month, then becomes unable to work, because he also has the time of service, and thus the time is longer ”, say the interlocutors.

With workers from third countries: too complicated

You have to look for employees in other ways and resources. For example, employees who work here are encouraged to give birth to relatives, acquaintances.

“There are several examples: we send employees to work abroad, they come back and work with us again. After a few times, some come back,” says the company’s shareholder.

When asked if employees are searching in third countries, the interviewer assures about this possibility only when he considers it.

“The hiring procedures are not so simple, you have to take care of your accommodation and sign a contract. From a distance, it is very difficult to assess who a person is, and the commitment to hire must be given immediately. But we can’t verify it, just reach out and listen through Zoom to hear what and how you’re talking, and everyone speaks very well.

Such tests have been carried out in another related company, the Ukrainians were brought in, but today there is only one of the 4. And others returned voluntarily or at our request ”, says L. Noreika.

According to Sodra, in July. the average salary in the company was € 1,409 before tax and the median was € 1,128 before tax.