IKEA may start building a shopping centre near Chelyabinsk this year already. Anatoly Lobko, Head of the Chelyabinsk Region Investment Development Agency, has said today that the agency expects IKEA to “proceed with the investment phase of project implementation” in 2017.
In January 2016, the authorities of the Chelyabinsk Region and the management of IKEA Centres Rus Development LLC informed about their plans to implement the project. The investor bought a 40ha land plot, part of the territory developed as a single complex with the total area of 100 ha. The total amount of investment must exceed RUR 10 bln.
Ikea will invest RUB 23 bln in the third Mega trade complex in Leningrad Region. Managing Director of IKEA Centres Russia and CEO of Centres Rus Management Milen Mitkov Genchev have announced today at the meeting with the Governor of the Region Alexander Drozdenko.
IKEA Centers Russia managing IKEA and Mega trade complexes selected a site for construction of the third shopping complex in the Leningrad Region. The company is buying a site in the Anninskoye settlement of the Lomonosov District, negotiations regarding which have been conducted since 2015. The new shopping center may be the largest one of the IKEA Group in Russia, one of the Vedomosti’s sources familiar with the plans of the company says.
The Urban Council of the Moscow Region approved the idea of construction of a new trading site of Sweedish IKEA. The store will be built in the vicinity of the Lenin State Farm in the Leninsky District of the Moscow Region. It will be the fourth in the Moscow Region and the first in Russia to be located in a separate building. The area of the store is planned to be 36 thousand sq. m. It is to be opened in the second half of 2018. The new trading site will create about 400 jobs in the region.
IKEA of Sweden had launched its furniture production at its largest factory in Russia near Velikiy Novgorod investments into which had amounted to circa RUB 4 bn, the PR function of the Novgorod Region government informed.
"The furniture factory is IKEA's largest investment into its new production facilities in Russia. Total investments have amounted circa RUB 4 bn. The factory would produce SKU 7 mm p.a. At the first stage, it would be wardrobe frames with kitchen furniture frames to be included into the product line in the near future", the statement runs.
IKEA is starting its first new project in the recent years in the Moscow region. The Swedish company has acquired a land lot in Kashirskoye Highway from a Lenin Sovkhoz Company and is constructing there its first separate store apart from Mega Trade Center.
On Friday, Denis Butsaev, Deputy Chairman of the Regional Government, reported that IKEA plans to expand furniture production and distribution centre in the Moscow Region within two years.
The company plans to build a workshop with an area of 18 thousand sq. m and a warehouse with an area of 128 thousand sq. m, to expand the access road, to build car parks, water treatment and water intake facilities.
Veliky Novgorod’s IKEA furniture factory started its operation in test mode. The construction of the new plant began in 2014. The total project cost is 50 million euros.
Floor area of Mega Khimki shopping centre will grow by 50%.
IKEA Centres Russia is also planning to invest in the expansion and renovation of Mega Teply Stan shopping centre, which is expected to almost double in size.
IKEA representatives pointed out that Russia is a priority market for the company. The brand will expand its entire production and distribution chain to make IKEA products maximally accessible for the Russian consumer. They will specifically focus on increasing production localization through expansion of in-house manufacture and wider cooperation with local suppliers. The company is planning to increase localization for all categories of products sold at Russian IKEA stores to 80% by 2025.
Construction will take place in two phases. The first phase will involve the construction of an IKEA shop, to be completed by 2020. The construction of shopping centre will complete the second phase of the project.
The new shopping centre is expected to create over 2000 jobs.
The construction of an IKEA furniture factory worth EUR 50 million near Novgorod will be completed on schedule by 2017. At present, equipment is being installed at the facility, Pavel Govin, the project’s general manager, told TASS today.
“The construction of the furniture factory IKEA Industry Novgorod is being carried out in accordance with the planned schedule. “The foundation and building structure have been completed, and we are now installing equipment, which will then be tested,” he said.
According to Golovin, “this is currently IKEA’s largest capital investment in a new production plant in Russia.”
He emphasized that a new furniture facility would increase output of home furniture items, which are in high demand with customers. In particular, the Novgorod plant will produce frames for Pax wardrobe systems and Metod kitchen system.
The furniture factory is being built next to an existing chipboard plant that employs more than 350 workers. According to IKEA, its expansion to the Novgorod region will add 250 more jobs. Construction began in 2014.
IKEA has been operating in the Novgorod Region since 2013, when the company acquired a chipboard plant from the Polish company Flyderer.
IKEA Mos, the Russian subsidiary of Sweden’s IKEA, the largest seller of household goods in Russia, has signed an agreement on cooperation with the Moscow government, as confirmed by IKEA representatives Natalya Sergunina, the Moscow deputy mayor for economic policy and property and land relations.
The agreement stipulates that IKEA will open at least three hypermarkets in the capital and also invest in the construction of road and social infrastructure for the stores. Total investment will amount to RUB 50 billion. In addition, the Swedish company plans to invest a total USD 2.3 billion, or approximately RUB 130 billion, in the Russian market prior to 2020.
The IKEA chain is currently comprised of 14 hypermarkets, all of which are tenants of the same number of Mega shopping centers, which also belong to the Swedish company. Three of the 14 Mega centers are located in the Moscow region.
The format will largely depend on the site that is selected, an IKEA representative noted. Separate decisions will be made on each of the three stores. The representative did not rule out that the size of the hypermarkets will differ from the usual size: according to the company, the average size of its stores is 20,000—32,000 square meters.
The retailer began testing its smallest format in 2015 in Norwich, England, about 160 km from London. The area of the IKEA studio stores is 1,765 square meters, which is roughly 90% smaller than the standard hypermarket. The company opened similar stores in Troms, Norway and Pamplona, Spain.
The company is willing to invest another 1 billion rubles in the construction of a metro station near the Mega shopping center in Kazan.
IKEA is ready to invest 1 billion rubles each in the construction of metro stations near the Mega shopping center in Kazan and a future Mega shopping center in the Moscow suburb of Mytishchi, the CEO of IKEA Shopping Centers Russia Armin Mikaeli told journalists on Thursday.
Construction of a Mega Mytishchi near the town of Chelobitievo might begin in 2016, with the opening scheduled for 2018. Investments in the project are estimated at 20 billion rubles, including the surrounding infrastructure.
The government of Tatarstan last year approved IKEA’s initiative to build a metro station near the Mega store in Kazan.
Mikaeli said IKEA intends to construct a shopping center in the Moscow city limits and is currently looking for a place to build it, Interfax reported. “We are interested in having more locations in Moscow. Right now we are looking for a site and conducting due diligence, and we are in the process of negotiation,” Interfax quoted Mikaeli as saying.
Founded in Sweden in 1943, IKEA is the largest retailer of furniture and household goods in the world. As of the end of August 2013, the group owned 303 stores in 26 countries. Today IKEA has 14 complexes in major Russian cities.
One of the world's biggest furniture retailers, the Swedish company IKEA plans to invest 19 bn Swedish krona (c. USD 2.3 bn) in its Russian operations by 2020. This was communicated to Dagens Nyheter, a Swedish periodical, by the company's press-secretary Daniela Rogosich.
"We would like to double our sales in Russia by 2020. The key focus is on the Moscow market but we are also considering opening new stores in 25 other cities with populations of over 500 thousand" Rogosich said. According to her, IKEA also plans to build a plant in Veliky Novgorod to manufacture cabinets, kitchen furniture and storage systems.
For IKEA, Russia is one of the fastest growing markets. As per the company's report for 2013, Russia ranked fourth in the IKEA annual sales plan and even Sweden was left behind in these terms. Walter Kadnar, Head of IKEA Russia, said back in March that the company intended to invest EUR 2 bn in the Russian market by 2020.
According to the company's press-release, in the 2014 financial year, the number of visitors to MEGA shopping malls owned by the IKEA chain reached 270 m, with tenants' sales increasing by 6%. IKEA is not the only retailer planning expansion despite the aggravated relations between Russia and Europe and the decline in the Russia's economy.
At the end of December, it became known that the German Tengelmann Group, known for OBI stores in Russia, plans to launch a new chain in 2015 – Plus food discounters. In addition, Auchan, a French food retailer, announced plans to open the first corner store under the "Every Day" (“Kazdy Den”) brand in the underground near Smolenskaya Square. Maria Kurnosova, Director for External Relations for the chain in Russia, explained to RBC that the small pilot store would have about 2 thousand SKUs in its product mix. We can discuss the possibility of a whole chain of such stores, including on ground floors of residential buildings, no earlier than in six months, she specified.
Swedish furniture retailer IKEA IKEA.UL plans to invest about 2 billion euros more in new and existing Mega shopping malls in Russia by 2020, it said on Thursday, reaffirming long-term expansion plans for the country despite an economic downturn.
The head of IKEA Shopping Centres Armin Michaely, presenting the company's long-term strategy to tenants, said the next mall - IKEA's 15th in Russia - would open in Mitishchi, just outside Moscow, in 2018.
"This is a big investment for us," Michaely said. "We will spend around 260 million euros just on the shopping centre" plus investment in traffic infrastructure.
Out of 2 billion euros ($2.6 billion) earmarked for investment in Russia, 40 percent would go to existing stores and 60 percent to opening new stores, he said.
The company is looking to open in smaller cities with populations of between 500,000 and 1 million people, he added.
"We still believe in Russia. This is why we are committing such a big investment," he told reporters.
Investments in the refurbishment of its stores in Kazan and Yekaterinburg are estimated to cost around 27 million euros each, said Olga Shevtsova, the commercial development director of IKEA Shopping Centres Russia.
The company will also invest 208 million euros to significantly expand its store in the Khimki region of Moscow and 158 million euros to expand another Moscow store, as well as 208 million euros to double the size of its mall in the southern Adygeya region.
What remains of the $2 billion after these projects will be invested depending on the availability of land and other conditions, Shevtsova said.
Sweden-based furniture manufacturer and retailer IKEA is planning to construct the second stage of a distribution centre in Esino in the Moscow region.
The centre will cover an area of 190,000 square metres and will be launched in 2017. The total investment is estimated at USD 165.91 million.
Sweden-based furniture manufacturer and retailer IKEA is planning to open five stores in Russia by 2020.
IKEA plans to invest EUR 2 billion in the development of its production and supply chain in Russia by 2020, said the Director of Retail Network in Russia, Walter Kadnar.
"By 2020 we plan to invest two billion euros in the Russian Federation. This is the money we will direct to the development of production and supply chain (manufacture, warehouses, supplies etc.)".
Kadnar added that the main point for the company was to develop a local production.
Sweden-based furniture manufacturer and retailer IKEA is planning to build a furniture plant in Novgorod, Russia.
The factory is to be built alongside a particleboard mill that it bought from Pfleiderer in January 2013. The investment project is reported to involve an investment of about $69 million, is to be made via IKEA Industry.
The new plant will make kitchen cupboards and wardrobes. The neighbouring particleboard mill will supply the melamine particleboard required as a raw material. The furniture plant is to employ about 250 staff. IKEA Industry put the number of people currently working at the particleboard mill at about 380. IKEA said that a firm timetable had not yet been drawn up for building and commissioning the furniture plant, which will be part of IKEA’s Flatline division.
IKEA International A/S
Company's website: www.ikea.com
T: +46 42267100
Contact: Mr Mikael Ohlsson, Chief Executive Officer
IKEA International A/S sells Scandinavian-style home furnishings and other housewares around the world.