The exclusive interview with the General Director of the Association of furniture and woodworking industry Timur Irtuganov

The interview with the General Director of the Association of furniture and woodworking industry Timur Irtuganov

As part of the St. Petersburg international woodworking forum, we asked Timur R. Irtuganov, General Director of the Association of furniture and woodworking enterprises, to comment on the state and prospects of the slab and plywood industry.

– Timur Ravilyevich, how do you assess the state of the furniture industry over the past five years?

– If we talk about the domestic furniture industry, we could say that it is developing taking into account the changes taking place in the market and the current state support standards. But we could say that the annual increase in furniture production and exports. Also, due to the change in the ruble exchange rate, the share of changes in the presence of domestic furniture in the Russian market is growing. And now it is important to maintain this trend and use it.

Unfortunately, the weakening of the ruble did not contribute to an increase in purchasing power, which created certain problems for the sale of furniture products in Russia. In this situation such measures of support from the state as the resolution No. 1072 “Аbout a ban of purchase of import furniture on the state and municipal biddings”are effective measures[1].

The measures that we hope will be able to normalize include the provision of standard housing with wooden furniture, the possibility of purchasing furniture in a mortgage loan and zero customs rates on types of fittings that are not produced in the Russian Federation. Therefore, the current situation in the Russian furniture market is ambiguous and, undoubtedly, there is something to work on.

If we return to the woodworking industry, I will talk about the wood board and plywood segment. We have over the past ten years has made a huge leap forward. A lot of new enterprises have been opened, a large number of plants producing slabs and plywood have been reorganized and re-equipped. The change of production indicators is very strong. Even if we carefully study the recently approved “The strategy for the development of the forest complex until 2030”, we can note that in the plywood segment, the expected results are not very different in all three scenarios (inertial, basic, innovative). In my opinion, this suggests that the regulatory authorities think that the plywood and so all is well. And even analysts who helped to develop the “Strategy”, prepared calculations and see that the plywood industry in Russia has gained sufficient momentum for further development. Is it right? No.

First of all plywood producers need new measures of state support such as the weakening of import barriers in foreign markets, domestic support and raw material support to exporters. We have something to work on.

–What are the results achieved by the Association over the past year, and what plans have you set for this year? Please share.

– As for the Association, we must clearly understand that it is not a business structure and a state institution. We do not have a law on lobbying organizations, but at the same time we understand that there are lobbying organizations, they operate, and their activities are a correct and natural process. Only by uniting we solve global strategic issues, such as providing our enterprises with raw materials.

The task of the Association for the short term is to finally build such a model of relations with the business, so that we work in a certain online mode: constantly receiving a business order, analyzing it, providing feedback. So that companies that have delegated us the authority to represent them at the state level, were confident in the effectiveness of our work. It works with a certain KPI[2]. We are focused on the implementation of this model and build it. So that companies that invest in the Association, it was clear for what they came to us.

We are able to solve both global and local problems, such as the participation of furniture makers in foreign exhibitions. For two years in a row on the initiative of the Association in Cologne held a furniture exhibition with state support. In 2017  it was with the support of the Ministry of industry and trade, and in 2018  it was with the support of the Russian export center.

– Thank you. Tell me, what is the difference between the activities of the Association and the furniture cluster? I will explain, in Tatarstan recently [3] the Kastamonu company organized a furniture cluster to help furniture enterprises to deliver their products to the consumer[4].

– Now we can talk not only about the furniture cluster, but also about the timber clusters, which are becoming popular and the development of which is justified.
We are talking about a kind of synergy, when one plus one is not two, but two and a half or three, and the addition of three units can get ten, which increases the effect of interaction of enterprises within a single region.  A cluster is a very promising model that needs to be used. But it is impossible to compare the activities of the cluster with the activities of the Association. The cluster has a business model. The Association is a representative of business. Of course, we unite enterprises and consider a wide range of issues, but the Association, unlike the cluster, is not an interaction within.

– It turns out that you are engaged in rallying companies, but do not show them how to organize your business?

– The task of the Association is not to teach companies how to do business. And, by the way, the business told us about it directly. One of the new leaders of the company “Egger”and said, but not the representatives of the Association, and our colleagues:”No need to teach us business.” I fully agree with his point of view and subscribe to these words. It’s not our job to teach business. Our task is to hear what they need, what issues the Association should solve to make them more comfortable to work. That’s what the Association should do.

–Tell me, what types of furniture, in your opinion, can be in demand in the next five years or in the next three years? Will it be upholstered furniture or cabinet furniture?

– The cabinet furniture occupies the main place in the structure of production now in Russia. The growth of the individual sectors – we take children’s furniture or kitchen furniture, upholstered furniture – about the same. Most likely, we can say that it is necessary to promote the development of existing trends and the constant growth of furniture production. In the direction of which segment will shift the advantage, I’m not ready to answer. Perhaps in the direction of cabinet built-in furniture, kitchens just thanks to some initiatives supported by the Government. I have already talked about this before: providing standard wooden furniture.

–And the last question, Timur Ravilyevich. What do you wish to future generations, those young professionals who decided to choose a job in the furniture and woodworking industry? What should they pay attention to when they get their education, or have already graduated from University and enter the labour market?

– Probably, I want to thank them that they chose our industry, because there is a shortage of personnel, even today at our discussion[6] this topic was touched upon. This problem exists in principle for our industry and the entire timber industry. As for furniture makers in particular, I think it is a wonderful profession. Recently, the exhibition “world of childhood”was held in Moscow. We are well aware that one of the first subjects that a person faces in his life is a cradle for children. And, perhaps, the work of furniture-one of the most noble and important that exist. Therefore, I advise you to pay attention to your own prospects. Choose the right company, on the one hand. On the other hand, if you feel your potential, feel the desire – do not be afraid to start your business. Furniture business often depends on small manufacturers.

interviewed by Ekaterina Matyushenkova

[1] Resolution No. 1072 was signed on September 05, 2017.
[2] KPI-key performance indicators
[3] The agreement was signed in October 2017.
[4] In order to develop market niches or enter new markets, the tasks of the furniture cluster also include assistance to its participants in the establishment of cooperation relations, ensuring compliance of products of enterprises-participants of the cluster with modern quality requirements, improving competitiveness, improving logistics, staffing, etc.
[5]”The strategy of development of a forest complex till 2030″.
[6] Within the framework of the St. Petersburg international timber forum on September 27, the discussion was held at the round table “The development of wood board and plywood industry”.