Kitchen manufacturer Alno turns to Asian markets
Real estate boom in the Orient stimulates consumerism - Sales office opened in Dubai
Alno AG, the German kitchen furniture manufacturer, wants to see a significant increase in its commitments abroad over the next few years. “We want to increase the proportion of exports in our sales from about 25 percent at the moment to 40 percent over the next five years,” Alno CEO Frank Gebert told the Handelsblatt.
Alno is currently in the process of increasing the number of its flagship stores from just a handful to a total of 26 all over the world by the end of 2006. In addition to Eastern Europe, Alno wants to extend its presence significantly to India, the Gulf States and China. According to Frank Gebert, the company has plans for the Chinese dealer network alone to consist of some 30 partner companies by the end of 2006.
As the 52-year-old sees it, the Gulf States are to be a special focus for activities. In particular, he hopes that the continuing real estate boom in the United Arab Emirates (UAR) will provide impulses for kitchen manufacture. “We have just opened a sales office in Dubai,” he reported, hoping this will provide an escape from the continuing poor consumer climate and pricing pressures by retailers at home. The VDM, the Association of the German Furniture Industry, has also confirmed that Dubai is the location of choice. According to information provided by the association, the value of German exports to this region in the first half of 2005 increased by 70 percent to 7.3 million euro. Dubai is also seen as an excellent starting point for neighbouring markets such as Saudi Arabia, Iran and India.
Alno’s products are already represented in more than 60 countries all over the world. Extending its business to beyond the largely saturated European markets is the beginning of Alno’s entry into the so-called “project business”. In the USA and Asia, apartment blocks and residential estates are fitted with luxury kitchen furniture before individual units are offered for sale, and lucrative packages for several hundred kitchens can be negotiated with project developers.
Siematic and Poggenpohl, the German luxury kitchen manufacturers, are already extremely successful in this field, and have done much to secure the excellent international reputation of German kitchen furniture. But Alno director Frank Gebert does not want to see his products in the luxury field, preferring the Alno brand to continue to sell “discerning brand-name kitchens”.
Meanwhile, the reorganisation of the Pfullendorf, Baden-based kitchen manufacturer continues. As announced, Wellpac, the (now sold) manufacturer of cheap furniture, was a major burden on results for the first half-year. Total group sales for the first six months were 310 million euro; just 26,000 euro were left.
Frank Gebert has now come to a cost-reducing agreement on overtime and leisure time with representatives of his workforce. In a countermove, the company guaranteed the 1100 employees at the Pfullendorf works that the site would remain open until 2009.
Alno is not expected to be fully in the black until after 2006. Frank Gebert is currently negotiating with three groups of investors to finance the planned export offensive, which would also contribute to long-term expansion. He is expecting a decision regarding further external participation in the next few weeks.
Alno back on the road to recovery after crisis
Crisis: Just three years ago, Germany’s best-known kitchen manufacturer was in a deep crisis: after several years of losses it was facing insolvency.
Hope: The company’s lending banks believed that Alno could be reorganised, and gave it a new management.
Partners: After a 50-percent increase in equity, in 2003 Alno acquired the Westphalian kitchen furniture manufacturer Casawell from the American appliance manufacturer Whirlpool. In a countermove, Whirlpool acquired an interest in Alno, thereby securing an important sales channel for its household appliances under the Bauknecht name. The two biggest shareholders in Alno, next to two branches of the founder family Nothdurft (54 percent), are Commerzbank (21 percent) and Whirlpool (25 percent).
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