He dreamed of improving life for as many people as possible by offering wooden furniture that everyone could afford. In 1947, Ingvar Kamprad, at the age of 17, started IKEA in Almhult, located in southern Sweden. He began by selling furniture from local manufacturers.
In 2008, the brand became the largest furniture retailer in the world. The brand makes many references to its home country of Sweden at its stores, and with over 10,000 products in its lineup, you may wonder where they manufacture IKEA products.
IKEA furniture is made in many countries including China, Vietnam, Myanmar, Malaysia, Romania, and Poland. The brand partners with third-party factories to build the furniture for its designs. At one point, IKEA operated a factory in the USA, but they shut it down in 2019.
What Were the IKEA Operations in the United States Like?
From 2008 until 2019, IKEA operated a factory in Danville, Virginia. This was the only IKEA plant in all of the United States, but its operations served the US and Canada. IKEA would build wooden storage units and mostly shelves for the local markets.
Oddly enough, IKEA said that they planned to migrate their manufacturing operations over to Europe in a bid to lower the cost of their merchandise for the North American markets. This slashed 300 jobs and implied that it costs less to build their products in Europe and have them shipped to the United States. However, many of the places—even in Europe where they produce their products—come from low-cost-of-labor countries like Romania and Poland.
An IKEA spokesman said that the cost of the raw materials was too much to justify producing in the United States despite them making every effort to stay competitive. Six months prior to shuttering the factory altogether, IKEA laid off 20 percent of its workforce even before the big cut. Unfortunately, none of this looked at the losses for the local government. The city of Danville, for example, will lose $500,000 per year in annual revenue.
This was an unfortunate decision for American manufacturing, but it wasn’t unheard of since this appears to be the new norm. The United States has struggled to compete in manufacturing in some markets due to the higher cost of labor.
With all of this in mind, knowing that they’re not a huge manufacturer in the United States, let’s have a look at where IKEA produces its products.
Who Owns IKEA?
Inter IKEA Group owns the IKEA brand. IKEA, in fact, is not owned by shareholders, and several operating companies and holding companies control the ownership of it. The complex corporate structure at IKEA was partially meant to respond to the high taxation rate in Sweden. Most people only pay local taxes in Sweden, but it ranges anywhere from 29.08 percent to 35.15 percent of their yearly income, which also explains why they registered Inter IKEA Group, the main holder of IKEA, to the Netherlands.
To put into perspective how complex this corporate structure is, Inter IKEA Group is the main owner, but they only collect three percent of IKEA’s store sales worldwide each year.
The taxes were so high that Ingvar Kamprad checked out. He paid taxes to Sweden for the first time in 42 years in 2015, since he has technically lived in Switzerland since the 1970s. The eighth richest man in the world declared his income in 2014 as 1.9 million euros in Sweden. He had to pay a personal income tax of 640,000 euros. To put that into perspective, he had a total net worth of $58.7 billion. It goes to show how you can tax as high as you want, but unless they close the loopholes that allow the rich to get away with not paying their taxes, it will hurt the common people the most who often wind up paying that rate.
They first incorporated Inter IKEA Group in 1991, and Ingvar Kamprad controlled ownership of it until 2013 when Kamprad renounced his right to appoint members to the council at the age of 87. He did this as the youngest of his three sons took over running the IKEA brand. However, we believe that right to the end, Ingvar Kamprad kept a firm grip on the company behind the scenes.
Here is an interesting video about the founder of IKEA.
The Chinese IKEA Supplier Producing in the United States
With the following information, we’d like to show you how things aren’t always as black and white as they appear. An American company can be terrible for American made products and heavily favor overseas manufacturing and a Chinese company that wants to produce in the United States can do a better job of it. Don’t buy from an American company just because they’re American—it matters more where they send the jobs.
In 2013, Liaoyang Ningfeng Woodenware Co. Ltd. invested $2.1 million into a new subsidiary in the United States that would create 125 jobs. They would make furniture parts for the Chinese, American and European markets. This company is a major supplier of IKEA, and while it isn’t IKEA, they do help to bring jobs to America.
Would we say to support them? Absolutely and as long as they bring jobs to the United States, we don’t see a problem with supporting a company that helps create jobs for our country. We believe that this company is called New Ridge Furniture under the subsidiary, which you can learn more about on LinkedIn here. Especially considering how they talk about wooden furniture and the connection to IKEA, we feel certain that this is the same subsidiary under Liaoyang Ningfeng Woodenware Co. Ltd.
Related Article: American Made Furniture Brands We Love
Is IKEA Furniture Made in China?
China produces an estimated 22 percent of the IKEA products making them the largest manufacturer of the brand. To understand the scale, IKEA partners with over 350 suppliers in China, and they have made their furniture there for years.
Part of the reason for favoring China for manufacturing may come from the profitable market there as well. China has a huge market available along with its cheaper manufacturing. Online sales for IKEA products have surged. From 2019 to 2020, the online market saw a 67 percent increase in Chinese sales.
IKEA has been in the Chinese market since 1998. China marks out one of the most important and growing markets for the brand as the nation rises in prosperity.
Many of IKEA’s major products will have come produced from China. Back in 2013, IKEA constructed its first factory in the country. Expanding throughout China, the location would allow them to sell products to the markets in Asia.
Their first facility was located in Nantong, Jiangsu. Originally, they said that their plans were solely to supply the country with IKEA products—we all know how that goes, however. Soon much of their production was located in China.
Why did they choose Nantong for their first factory? Due to Nantong’s closeness to the Yangtze River and being a wooden furniture maker, they could lower their logistics costs. It was a highly strategic business decision. The city’s closeness to Shanghai put it near IKEA’s warehouses. It also goes to show the level of thought that some companies employ when thinking of a factory location.
Why IKEA Offers Build Your Own Furniture
There is a lot of speculation as to why IKEA has you build your own furniture. There are many speculative reasons. One of the most likely reasons is that it’s easy to transport the furniture and the fact that it can be separated into parts makes it take up less space. Also, many people speculate that IKEA’s massive success comes from the fact that people like building and get a sense of satisfaction seeing the piece of furniture they built. There are also other reasons, which the video linked below does a better job of explaining than I could here!
Is IKEA Made in Poland? What IKEA Products are Made in Poland?
In fact, outside of China as the largest producer of IKEA products, Poland ranks in second place for manufacturing for the Swedish brand. While China produces an estimated 22 percent of all IKEA products, we would say that Poland comes in second producing around 20 percent of all IKEA products.
The reason they heavily favor manufacturing in Poland comes from it being one of IKEA’s fastest-growing markets. They rank only behind China and Russia for worldwide sales. In Poland, IKEA ranks as the third most powerful brand only behind Google and Coca-Cola. Many Poles live in one-bedroom homes, and most IKEA products are known for their affordability.
Understanding IKEA’s earliest beginnings will allow you to understand why they choose Poland to this day. Originally, in 1943, Ingvar Kamprad sold pencils and postcards, but he decided to sell wooden furniture in 1948 with the goal of producing low-cost furniture that people could afford. The cost was so low, in fact, that many people were skeptical.
Ingvar faced crushing competition back home in Sweden. He sought foreign markets to relieve some of the pressure, and in 1961, IKEA sold its first order for wooden chairs in Radomsko, Poland, from the Fameg Factory.
IKEA’s presence in the country hasn’t faltered since. Having nine stores in the country, IKEA reaches an estimated 50 percent of the market, and they want to gobble up more of the market. Over five million households in Poland furnish their homes with IKEA furniture.
Some of the IKEA products made in Poland include:
- HEMNES Series
- PAX Series
- LACK Series
- EKET Series
- KALLAX Series
IKEA has over 30 partners in the country that they have worked with for over 20 years. Poland also ranks as the largest supplier of wood products for the IKEA brand. In case you’d like to learn more about the IKEA production in Poland, check out this 21-page booklet on the brand’s manufacturing there.
IKEA: Made in Romania
We find IKEA’s production in Romania interesting for one major reason. IKEA happens to be the largest private landowner of old-growth forests in Romania. These are some of the most important forests in the entire world, due to their biodiversity, and since 2007, they have lost between one-half and two-thirds of them.
We wouldn’t put all the blame on any single entity, and we’re not making any claims about anyone.
However, just for kicks and giggles, what do you get when you cross a multi-billion dollar corporate wooden furniture maker with a very important forest? IKEA claims their interests there are in good stewardship of the land alone and protecting it from others who might seek do it harm. Maybe they are right; they are guardians of the forest. We’ll let you decide.
We did find an interesting article to suggest how illegal logging takes place in the region and how it offers plausible deniability for everyone involved. If you’d like to see an interesting piece about the illegal logging practices going on in Romania and how it works, check out this article here from the New Republic. An estimated 55 percent of all logging in Romania is illegal, but this happens in other places, too, like Ukraine and Russia. We vote for companies and how they behave with our dollars.
Romania is one of the places where IKEA sources its wood—approximately 10 percent of its wood. They source their wood from over 50 countries like Sweden, Russia, Poland, Germany and Lithuania.
Is IKEA Made in Russia?
Before the conflict in Ukraine, IKEA produced its chipboards and wooden products at three different facilities in Russia. They also did logging in Russia, being their second largest wood source after Poland. NBC News reported that some of IKEA’s logging operations there may not be entirely legal. Since that time, IKEA did cancel that contract with one of the wealthiest politicians in Russia after it was brought to light.
Russia made up around four percent of the company’s total sales in August 2021. On March 9, 2022, IKEA announced that they would temporarily close their stores in Russia and halt the production of wooden furniture there due to the invasion of Ukraine. The move impacted 15,000 workers at IKEA stores and factories in Russia.
Does IKEA Produce Furniture in Sweden?
Despite being a Swedish company, IKEA doesn’t produce any of its furniture in Sweden due to high costs. Instead, IKEA is more known for designing the furniture ideas in Sweden and having them sent abroad to other countries for production. This allows the brand to keep lower prices. Not all IKEA furniture will come at a low cost, but you have many good options for cheap furniture.
Where Does IKEA Source Its Materials?
We already pointed out how IKEA sources its wood from over 50 countries, but we have one material that we’d like to talk about from the brand: bamboo. IKEA almost exclusively sources all of the bamboo from China. Over 90 percent of the bamboo comes from China.
Let’s talk about one of the countries that we haven’t spoken about—Vietnam. IKEA gets most of its acacia products from a source in Vietnam. This wood species is common with its outdoor products, which means that if you buy outdoor furniture from them made from acacia wood, they likely got it from Vietnam.
Here is a little more information about the materials IKEA uses and how they make their furniture
Is IKEA Made in Vietnam?
The outdoor furniture from IKEA especially comes from Vietnam where they have factories to produce it. We may see an increased favoring of Vietnam as China becomes more expensive to produce in. Since 1996, IKEA has had an office in Ho Chi Minh City. IKEA works with women who are weavers in the country to produce some of its products.
Why does IKEA favor the use of acacia wood? This wood feels sturdy and is durable. It mainly grows in Vietnam and Malaysia. The brand perhaps favors acacia compared to teak or other wood species because of its lower cost. You rarely have to worry about your outdoor furniture scratching when made from acacia. This protects your investment from damages.
Related Article: Rugs Made in the USA (Source List)
We would not consider IKEA a great American made brand for many reasons. The brand did try to produce in the United States for a time but decided to manufacture elsewhere. They mainly prefer to manufacture in countries with a lower cost of labor. While they cost less than other brands, if you’re looking to support American companies IKEA furniture would not be right for you.
Hi, my name is Kevin and I’m from Pittsburgh, Pennsylvania. Choosing products made in America is important to me because it supports local economies, creates jobs, helps the environment, and ensures ethical labor practices. I also find that American made products are usually of higher quality so although they’re a little more expensive, you save money in the long run. Before starting this website I was in the USMC infantry and nowadays I work on this website as a hobby.