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Wendre and IKEA join hands to build U.S. plant

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Estonia’s home textile producer Wendre has won a tender from the world-famous department store IKEA to bring the blanket and pillow producer to its U.S. Maryland warehouse.

Though final agreements are still to be signed, work has already started to build the factory as IKEA aims to start production at the end of 2014. The factory will hire 60 employees and should hit a turnover of 30 million dollars in a couple of years. There will be approximately 50 products made in the new factory, under the brand name of IKEA. Wendre (or its mother company, Trading House Scandinavia AB) will become a tenant in the new factory and will be responsible for the whole supply chain.

A local factory in the U.S. is important for IKEA in order to stay competitive in the North American market. The deal also provices good opportunities for Wendre to get a foot in the door of the U.S market. If the co-operation is successful and U.S. market pecularities are learned, Wendre will have a chance to make and sell its own branded goods.

IKEA has been a long-term client for Wendre, as Wendre’s products are sold in IKEA deparment stores all over the world. Wendre is one of the key suppliers of bedding textiles for IKEA, and furthermore one of the largest bed textile producers in Europe, selling its production also to Jysk, Ikea, Carrefour, Desko.
Wendre is today one of the largest textile companies in Estonia, employing 700 people. Most of them are located in Estonia – in two factories in Pärnu and one in Vändra. The company also has factories in Poland and China, plus sales offices in Germany, Sweden, the U.K. and France. The company’s 2012 turnover was about 100 million euros.

Wendre was made successful by its owner Peter-Kalev Hunt, a Swedish-born Estonian, who started major business activities in Estonia in 1996 with an investment into the Vändra textile factory. By 2002, he had acquired 100% of this company. Sensing a huge opportunity in the blanket and pillow market, he started hunting for a new place to build a bigger factory. As the town of Vändra, had a labour shortage, he decided in favour of Pärnu, and the factory was ready in 2006.

The factory in Pärnu enabled Wendre to immediately grow its turnover by two times . “I understood that these products have such narrow margins that you can only make a profit from the volume,” Hunt said. Hunt, famous for his charisma and good communication skills, is also famous for his charity activities and prized with the title of Entrepreneur of the Year by Ernst & Young and the Estonian Business School.

Source: Nergi, A-M. (2013) Peter Hundile kuuluv Wendre rajab IKEA-ga Ühendriikidesse uue tehase. Delfi Ärileht, 19. november.
Niitra, S. (2010) Peter Hunt: edu toovad õige hind ja suur kogus. E24, 3. juuli.