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Ikea closes production factory in US

Published: 15 July 2019 - Kiran Grewal
 

Ikea Industry has announced that it will discontinue production at its Danville, VA location in December 2019. The plant, which has been operating since 2008 and currently employs 300 co-workers, produces wood-based furniture for Ikea retail stores in the U.S. and Canada. The company said production will move to existing Ikea Industry manufacturing units in Europe.

“This was an extremely difficult decision to receive. We made every effort to improve and maintain the competitiveness of this plant, but unfortunately the right cost conditions are not in place to continue production in Danville, VA for the long-term,” said Bert Eades, site manager, Ikea Industry Danville. “We will do everything we can in the coming months to support our co-workers through this change as they look for new jobs and training opportunities.”

The Ikea Industry plant in Danville was established 11 years ago to supply the market for functional and affordable wood-based products. The plant mainly produces KALLAX shelving units and BESTÅ living room storage units for IKEA U.S. and Canada.

Despite many efforts to improve, the cost structure for production in Danville is said to be too high, especially when it comes to raw material, resulting in pricing that is significantly higher than other Ikea Industry units making the same products in Europe. Following a very thorough analysis, it was concluded that conditions are not in place to continue and develop production in Danville.

The production will keep running until December 2019 to allow Ikea Industry co-workers time to find new employment and training opportunities. Including dismantling, Ikea Industry will be present in Danville until spring 2020.

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