The last financial year was another good year for kitchen and furniture manufacturers. “Consumers were again drawn to the homing and home improvement trend which remained strong during the last year. The demand for fittings has stabilised at a high level,” says Philipp Blum, Managing Director of Julius Blum GmbH, describing the developments of the industry. The family-owned business from Vorarlberg, Austria has posted 2,643.65 million euros in Group turnover for the 2021/2022 financial year, increasing its sales by 266 million euros on the past year. “The last business year has again proved to be a challenge due to the ongoing COVID pandemic and war in Ukraine. This makes the 11.2% increase in turnover all the more pleasing,” comments Philipp Blum. Against the backdrop of these extraordinary global circumstances, it is necessary to take a differentiated view of the results. The price of raw materials has increased multi-fold, as has that of transportation. “This year’s increase in turnover is partly due to a growth in sales volume and partly due to the price adjustments we had to make because of the dramatic rise in costs,” explains the Managing Director. The family-owned business added 644 employees to its headcount last year, taking staff numbers worldwide to more than 9,422. 6,981 of these employees are based in Austria.

Development of international markets

Western Europe saw another big increase in turnover, particularly in Italy, Germany and the UK. However, the political situation had a subduing effect on markets in Eastern Europe. “We are shocked by Russia’s war of aggression on Ukraine which has inflicted untold suffering on many people since it was launched in February. The war in the middle of Europe is shattering peace on the European continent and shaking the foundations of stability. Although our colleagues in our Ukrainian subsidiary are as well as can be expected, their health and well-being are a constant concern,” says Philipp Blum. The lockdown in Shanghai and other Chinese cities in the spring of 2022 put the brakes on growth in China. “It has had a major impact on our customers there, but the Asian market has achieved good results on the whole,” he continues. Business was also satisfactory in North and South America. However, international transport routes have created new challenges for the company. “Disruption is being caused by the war in Ukraine and the worldwide shortage of freight containers, heavy goods vehicles and drivers. The supply chain is still under severe pressure,” Philipp Blum adds. The company is satisfied with order volumes and is guardedly optimistic about future developments. “We’re pleased that we’ve been able to greatly reduce lead times for many product groups by increasing production capacity and recruiting new members of staff over the past few months,” says the Managing Director.

Blum Group investments

Blum has strengthened the location of Vorarlberg, Austria by investing a total of 224 million euros in its main production facilities, specifically in its plants in Bregenz, Hoechst und Gaissau. “This is where we develop our products and production methods, where we create most of the added value,” explains Managing Director Martin Blum. “To overcome global supply chain challenges and reduce our ecological footprint, we will expand our global production network – in Europe and internationally,” he continues. One major milestone is the completion of a new plant in Shanghai. First production lines have been put into operation and Blum has been assembling hinges for the local market since early April. The manufacturer of fittings will also have additional production space at its disposal at its Polish subsidiary from 2023. In the past financial year, investments worldwide totalled 339 million euros. For Martin Blum, one of the most important investments is in the training of skilled professionals. “Our programme of vocational training and ongoing education is designed to stem the shortage of skilled workers. We train 400 apprentices worldwide, 363 of whom in Vorarlberg.” Motivated, committed and qualified employees are one of Blum’s key success factors. “We’ve pulled together and come through despite another challenging year which put enormous pressure on our organisation. That wouldn’t have been possible without our extraordinary team,” says Martin Blum with conviction.

Innovations

The great number of visitors to EuroCucina in Milan in June showed that there is a need for face-to-face meetings and a keen interest in products and design trends. The REVEGO pocket system opens up new possibilities for the design of living spaces and was often displayed by Blum’s customers at the trade show. The fittings manufacturer is confident that the new product will be successfully launched on the market. The same applies to its latest box system, MERIVOBOX which enables a broad range of drawers and pull-outs with just a few components – and all with the same manufacturing and assembly process. As for lift systems, the new AVENTOS top range with numerous new features and the integrated AVENTOS HKi fittings solution for design-oriented furniture are to be launched shortly. The family-owned business from Vorarlberg also believes that there is great potential for innovative fittings solutions in the future.

Energy safety – long-term solutions

As a manufacturing company Blum is part of a long international supply chain. Although the company’s direct reliance on gas is not significant, it does rely indirectly to a great extent on gas used, for example, for steel production. That is why it is impossible for Blum to make a swift exit from fossil fuels. “We have long-term sustainability goals. Regardless of the current situation around gas, we have been using alternative sources of energy for many years, for example, hydropower, district heating in our plants in Dornbirn, heat recovery in production facilities and photovoltaic systems,” says Martin Blum. More than 1,800 sq. metres (19,375 sq. ft.) of solar panels have been installed in Vorarlberg alone. About half of the trucks used for transportation between Blum’s plants in Vorarlberg run on local biogas and are therefore virtually carbon neutral. “We are a founder member of the ‘turn to zero’ Alliance on Climate Neutrality 2025 and are committed to becoming climate neutral by addressing our corporate carbon footprint,” concludes the Managing Director.

Looking ahead to the forthcoming year

The family-owned company from Vorarlberg is concerned about the high rate of inflation and rising cost of living. “People are having to think twice about how they spend their money. The fragility of international supply chains, complexity of transport logistics and volatility of raw material prices will remain a challenge,” says Philipp Blum. Now, more than ever before, the company as a whole needs resilience and flexibility to be able to respond to crises, learn from them and move forward. This will be key to the company’s success in volatile times. “Only in this way will we remain a reliable partner – to both our customers and employees,” he concludes.