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July 31st, 2012

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The company that makes some of Denmark’s most recognisable – and expensive – chairs is moving the last vestiges of its production to Poland, continuing a trend of massive job losses in one of the country’s biggest export industries.

Allerød-based Fritz Hansen already produces iconic Danish-designed chairs such as the Egg and the Swan in Poland, but the 140 year-old company announced on Monday that it would stop making stackable chairs at its plant in the Zealand town of Vassingerød.

Fritz Hansen will retain about a dozen workers who will be responsible for assembling components produced at its Polish factory, but the company said it made the decision to move its remaining production after concluding that it would be more cost-effective to open a new plant in Poland than upgrade the Vassingerød facility. 

“In a global market where the competition is tough, it is hard to overlook that there were so many benefits of moving production” to Poland, Jacob Holm, Fritz Hansen’s managing director, said. 

According to Holm, the company had managed to put off the move for a number of years, but the final decision came after it had concluded that there were no longer any productivity gains to be made in Denmark.

“We reached the point where our employees couldn’t work any harder,” Holm told financial daily Børsen. 

Holm added that “terrible” conditions for doing business in Denmark, combined with lower wages in Poland, meant the decision was inevitable. 

“Factors such as costs and taxes were an enormous. They were what made the decision for us.”

The move, according to Holm, does not mean the company’s products will be produced under worse working conditions or would be lower quality.

“Ten years ago, it would have worried us, but today it’s not a problem in terms of what the consumer will experience,” he told Børsen.

Danish furniture holds a vaunted place among design aficionados, but that status has not been enough to prevent the industry from shedding half of its workforce in Denmark over the past 15 years. 

In 1993, furniture makers employed 23,000 people in Denmark. Today the number is 11,000, and 4,000 of those job losses have come since 2008.

“Companies are moving their labour intensive production out of Denmark and employment opportunities in the industry are grim. Wages are too high and productivity is too low,” Keld Korsager, of Møbel+Interiør, a furniture makers’ interest group, said in 2011 in conjunction with the release of a report about the industry. 

Holm said, however, that even though Danish design is now being produced abroad, it did not mean consumers would assciate them any less with Denmark.

“Fritz Hansen still needs to give its seal of approval that the craftsmanship is up to standard.”