The family-owned business based in Hoechst, Austria has posted €2376.75m in Group turnover for the 2020/2021 financial year ended 30th June 2021 representing a growth in turnover of €470m (24.7%) on the previous year.
The fittings specialist was able to achieve these positive results thanks to the strong demand for top quality kitchens and furniture from consumers wanting to spruce up their homes. However, shortages in raw materials, especially in steel, have put severe pressure on supply chains.
The unforeseeable surge in demand for furniture caused by the pandemic has led to an above-average increase in turnover for the fittings manufacturer from Vorarlberg. “The crisis has prompted people all over the world to attach more importance to their homes. At the same time there has been a shift in private consumption – away from traditional leisure time activities to investments in home improvements, for example in kitchens and furniture,” says Philipp Blum, MD of Blum, explaining the development.
Development of international markets
Although furniture stores had to close their doors for long periods of time during the lockdowns, the demand for furniture and interior refurbishments increased dramatically all over the world. Western Europe recorded strong growth, particularly in Italy, France, the UK and Germany. Major increases were also posted in Eastern Europe, for example in Poland, Russia, the Czech Republic and Turkey. Business also went well in North America. Sales figures also rose in Asia and Oceania, with China again contributing significantly to the business results.Furthermore, last year proved a positive one for Blum in Africa, South America and the Near and Middle East.
The fittings specialist delivers to customers in more than 120 countries. With the foundation of Blum Indonesia in the spring of 2021, the company has 33 subsidiaries and representative offices worldwide. Philipp Blum is convinced that the company’s international orientation and policy of having local organisations and sales teams on site close to customers was very important during the pandemic.
The distribution of Blum turnover by region remained the same as in the previous year. “We still achieve most of our turnover, that is to say 44%, in our domestic market, the European Union,” comments Philipp. With a share of 13%, the USA is the company’s largest single market; other markets worldwide account for 43% of total turnover.
Employees are key success factor
“We’re delighted with the demand for kitchens, furniture and consequently Blum products but it poses extreme challenges, especially in the field of production,” points out MD Martin Blum. The reliable and timely supply of its products to customers is top priority for the long-established company from Vorarlberg. “We owe our thanks to our employees. It’s thanks to their commitment and flexibility that we’ve been able to deal with this extraordinary year,” underlines Martin.
At year-end, Blum employed 8778 people worldwide, 6551 of whom in Vorarlberg. 371 new employees were recruited in Vorarlberg last year; 429 worldwide. Blum continues to attach great importance to its apprenticeship programme, i.e. training young people to become specialists. The goal is to counteract the shortage of skilled professionals and be well equipped for the future. 93 new apprentices will start their vocational training with Blum in Vorarlberg on 1st September; eight new trainees will join Blum USA, and two Blum Poland.
Martin Blum, MD
Ongoing investments in Vorarlberg and organisations worldwide
In the past financial year, investments worldwide totalled €259m, €176m of which was in Vorarlberg. Despite the challenging times, Blum consistently invests in the expansion of buildings, machinery and facilities. “It was thanks to long-term planning that we were able to respond as well as possible to the unexpectedly strong growth in demand,” says Martin. The extension to Plant 4 in Bregenz will be put into operation this summer. Construction work has already started on the expansion to production facilities and a high bay warehouse at Plant 6 in Gaissau. The project should be completed by mid-2023. “This clearly shows our long-term commitment to production plants in Vorarlberg,” adds Martin.
The Blum Group’s investments in organisations worldwide serve to strengthen its international orientation in line with a healthy growth strategy. The plant extension in Poland is going according to plan and should be completed by autumn 2023. The production plant in China is scheduled to be finished by early 2022. “The market is undergoing rapid growth. We decided to set up production facilities on site to meet the demand of the Chinese market. It will give us greater flexibility, we’ll be closer to our customers and it’ll reduce transportation distances,” explains the Martin.
The impact of strong demand
The high market demand in the kitchen and furniture industry as well as in other industries has led to shortages in raw materials such as steel. “Unfortunately, our customers are currently also having to wait longer for our products,” points out Martin. “Only by adjusting some delivery times have we been able to meet the rapid growth in market demand,” he adds. The price of steel has almost doubled; plastic, packaging, zinc and aluminium have also been subject to enormous price hikes. We see a similar situation in the field of transportation. The whole international supply chain is under pressure. In some cases, overland and ocean freight costs have increased dramatically. “The current situation is very challenging, but we’ve managed to create a certain level of stability thanks to our longstanding partnerships with our suppliers,” says Martin with conviction.
Philipp Blum, MD
Innovations safeguard our future
Despite the turbulence of the last financial year, Blum is firmly convinced that continuous innovations in products and services will safeguard the future of the company. The family-owned business used digital technologies to stage Blum CONNECTS, a hybrid event to mark Interzum, an international trendsetting fair.
The manufacturer of fittings presented its innovations to customers all over the world using a combination of local events held at market organisations and virtual experiences. First customers are using Revego, the pocket system for closing off areas with large doors. It offers individualised design solutions for small and large spaces. Minimalist design can be implemented with ease with Aventos HKi, a fitting that is hardly visible even when the wall cabinet is open. Furthermore, Blum has also responded to the trend towards dark and metallic surface finishes. “We want to enable our customers’ design ideas and help them meet the demand for more individuality in kitchens and furniture by providing suitable fittings solutions,” reports Philipp.
Looking ahead
The managing directors believe that international supply chains and the supply of raw materials will remain severely impacted for some time. “We hope that the high vaccination rate will avert the need for further lockdowns,” says Philipp. How long the home improvement trend and shift in private consumption will last is not clear. But one thing is certain for Philipp: “We’ve benefited from the experiences that we as a company have gained over the last one-and-a-half years. Digital technologies offer many opportunities, but they’ve also shown us that you cannot replace face-to-face conversations and an exchange of ideas.” For the company as a whole, it’s very important to remain a trusted partner to its customers worldwide.
