The Danish furniture and furniture components maker Kvist Industries has taken over the property and assets of the bankrupt Latvian furniture maker Saga Group in Malpils 60 km east of Riga. Saga's Tukums plant (100 km west of the Latvian capital) has been taken over by a Latvian furniture maker.

Saga Group was declared bankrupt  in October 2009 in one of a number of cases from that time where the Latvian public was enraged at the apparent ferociousness with which the banks tried to protect their assets (see no 284 page 3).

The takeover of the Latvian plant means that Kvist will not be expanding its existing manufacturing facility in Kosice in Slovakia as veneer production will be placed in Latvia and Slovakia will be left with the solid wood manufacturing.

"We have our own veneer production in Latvia which is running right now and we are focusing especially on a reconstruction of the component section of the plant so  that it means our standards as far as logistics and efficiency are concerned," explains Michael Kvist, CEO and co-owner of Kvist Industries, to news2biz.

The Danes have already sent management people to Latvia and Mr Kvist expects that the  reconstruction of the components shop will last till spring. The plant's products will be moulded wood products and then veneer components made from Latvian birch.

Moulded wood, soon to be produced by Kvist Industries in Malpils. "It is important for us to communicate to the Latvian public that we are in Latvia to stay. We have guaranteed the jobs for the 100 people working at the plant and then we will see in spring if we can increase that number somewhat. But that requires that we find buyers for our expanded capacity, because as it is very true that we are going to Latvia because costs are lower than in Denmark, we still have to make rational use of every employee in the company," says Mr Kvist.

Traditionally, Kvist's position has been very strong in Denmark and Norway, but the Danish manufacturer is now seeking to expand also on the Swedish market.

Legally, the former Saga plant in Malpils is now called SIA Kvist and is a 100% owned daughter of Danish Kvist Industries. The Danes took over the assets and the property from Swedbank, but founded their own legal entity to operate the company.

"Swedbank has rented the facility out to some locals but this was mostly to keep the machines oiled as the facility is rather large and it would have cost a lot of money if they had shut it down and then would have to restart it," explains  Mr Kvist.

The CEO says that Kvist already took over some clients from Saga when it closed in late 2009, but that it will now go through Saga's client list to find more opportunities.

"On the other hand, there was a reason why Saga went under. I think they probably suffered from volume sickness and were not selective enough in choosing clients."

Family-owned Kvist Industries, which dates back to 1896, has approximately 100 staff at its Danish plants in Årre in Western Denmark. The company also has 50 staff in Slovakia and together with the 100 in Latvia, the group now has a total headcount of 250. We have talked to Michael Kvist This e-mail address is being protected from spambots. You need JavaScript enabled to view it. Te:l +45 76 77 45 00 (switchboard).

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