Last year FLLC "VMG Industry" celebrated its 10th anniversary. Over these years, it has managed to achieve significant results, including excellent export performance. What is the company's development story?
In 2011, the Republic of Belarus and the largest Lithuanian woodworking holding Vakaru medienos grupe (VMG) signed an investment agreement on the establishment of a vertically integrated woodworking complex in the "Mogilev" Free Economic Zone. Since April 2012, the phase of active construction was launched, and already in December of that year, the first woodworking item was released at one of the production facilities. The official opening took place in July 2013, and in 2014 we had already reached the target capacity. In 2017, the investment volume increased, the project was completed, and since the last year, we have been working on expanding other production facilities.
Over the past ten years, we have been focusing on advanced technologies and eco-friendly materials, staff growth and production efficiency, skills and teamwork development. For us, it is truly a great achievement that today the company is operating properly, with a clear and responsible outlook.
Could you describe your previous and current interaction with the foreign investor?
VMG is a holding company with a wealth of history and international experience. The company came to Belarus with a clear strategy, advanced production technologies and equipment. So it was a clear need for qualified personnel to ensure effective operation. At an early stage, VMG Industry employed a lot of foreign specialists, who shared their experience, monitored the production process, guided and trained Belarusian staff. Many of those applying for work in the new company were trained in Lithuania.
Now all positions in the company are held by Belarusians. We have, of course, adopted an effective management system, as well as a desire to constantly search for innovative and creative business solutions. One of our corporate values is social responsibility. We are happy to invest in the community we are part of. Since the company's foundation, we have been trying to participate fully in the life of our city.
As for interaction with the investor, I can say that Belarus and Lithuania are not only geographically close. We share common features in our mindset, spiritual and tangible values. Considering these characteristics, we always manage to find common ground.
What is the company's production capacity? Are there plans to expand and introduce new production lines?
The scale of VMG Industries and the amount of products manufactured is impressive. Three production units are located on the territory of the enterprise: particle board, curved laminated plywood products and furniture. The production area is 87 thousand square meters.
In 2017, the shareholders of FLLC "VMG Industry" decided to double the furniture production with more than EUR 23 million of supplementary investment. On the whole, VMG Holding has exceeded its project obligations in terms of investment and job creation. The amount of investment is over EUR 147 million. Almost 2.5 times more jobs have been created than initially planned.
Currently, the project "Reconstruction of the production facilities for curved laminated products" with the construction of a boiler house on the territory of FLLC "VMG Industry" is being implemented. The amount of investment for this project will total about 14.5 million euros with more than 70 new jobs.
The project involves the installation of additional equipment for the production of curved laminated products, which will increase the production capacity to 48,000 cubic meters per year. And the boiler room will basically make our enterprise waste-free because all the wood waste (chips, bark) will be used for fuel.
What is the company's export geography?
The geographic coverage of FLLC "VMG Industry" supplies is rather wide: Russia, Lithuania, Slovakia, Poland, the United States of America, Germany, Austria, France, the Czech Republic, Sweden, Saudi Arabia, Canada, Italy, the United Arab Emirates, China, Japan, Australia, and the UK.
Over the years, the company has faced various challenges. For example, until 2016, the Russian Federation had been our main market. The sales share of furniture to the neighboring country was more than 80 percent. Consumption decrease in Russia affected by the crisis forced us to renew our range of cabinet furniture by more than 50 percent. To be competitive in the European market, operating among really strong players, we had to work hard. But despite the slight decline at the beginning, the current economic situation has opened new gates and opportunities for us. So since 2017, we have built up the output. Today a very different situation has emerged: Russia accounts for less than 20 percent of our supplies, while the greater part of our exports is to Europe and America.
How does a relatively young company manage to cope with competition in foreign markets and, despite the unstable economic situation, not only to retain export performance but also to increase supplies of products abroad?
A company's success in foreign markets depends on many factors. Investment and up-to-date equipment are only a minor part. We are always focusing on the customer. It gives us an opportunity to open new markets. VMG logo is already a brand that stands for quality and reliability.
Upon completion of each manufacturing stage, all our products undergo thorough quality control. For this purpose, we have our own laboratories for chemical analysis and physical testing, as well as an accredited radiation monitoring laboratory. Formaldehyde concentration in our particle board and its plywood release corresponds to the emission class below E0.5.
At the same time, our main asset is people. With our skills and knowledge, as well as their continuous improvement, together we achieve the best result, allowing us to be market leaders. Last year's successful performance, as well as winning the "Best Exporter" National Contest, were only possible thanks to the close-knit team of professionals.
What are your future goals as regards company development?
The main objective of FLLC "VMG Industry" is to develop an innovative upstream integration system streamlining circular resource supply. We want to become the most efficient international group in the woodworking industry. To achieve this goal, we start looking for new creative solutions and ideas even before the next stage of each new project is completed.
We imply the company's dynamic development to be achieved through the application of innovations in all areas: production, logistics, HR management. To this end, we apply advanced experience and new technologies, improve business processes, staff management, and performance.
We have respect for hard work and our team. We encourage and recognize responsibility, entrepreneurship and teamwork to achieve common goals, because this is the only way we grow and become more competitive.
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