New Contracts Expands Ikea/Sauder Relationship

Ikea US announced today announced that it awarded current supplier Sauder Woodworking Co. a five-year contract. Sauder has been manufacturing kitchen cabinets for Ikea US. Under terms of the new contract, Sauder will produce four furniture families for Ikea US including bedroom furniture, office, entertainment and children’s storage furniture.

Expansion of the Ikea/Sauder relationship is a business decision that has environmental benefits, the parties acknowledged. Increased sourcing in the United States will enable Ikea to shorten transport distance between the manufacturing site and stores, thereby reducing carbon emissions, the retailer emphasized.

The partnership will create at least 150 new jobs and involve an equipment investment of over $13 million by Sauder, Ikea noted.

Sauder has been a supplier to Ikea US since 2007, the retailer pointed out.

 “We have been successfully supplying Ikea its AKURUM kitchen cabinets for the last seven years, so when Ikea was looking for North American partners to help them sustainably supply their North American stores with quality furniture, they looked to Sauder,” Kevin Sauder, president and CEO of Sauder Woodworking in a statement announcing the new contract. “Our teams have worked together closely to provide a great value to the consumer.”

Rob Olson, CFO, Ikea US, added, “Ikea strives for long-term partnerships with suppliers to secure efficient production and growth. The relationship between Ikea US and Sauder Woodworking is a good example of that. “With our planned growth in the U.S., we are looking to expand our manufacturing base here, so that we can deliver our products economically and sustainably.”

Ikea plans to add three new stores in 2014 and 2015: Miami, FL, Merriam, KS and St. Louis. About 19% of the cubic meter volume sold in Ikea US stores is produced domestically. Supply from North America, including Canada and Mexico, equals about 31% of the cubic meter volume sold in U.S. stores. Products currently produced in the United States include kitchen cabinets, mattresses, sofas, entertainment furniture, shelving units and appliances.