IKEA plans to move production closer to home

Swedish retailer IKEA is reportedly planning on moving more of its production to Turkey.

According to a report by Reuters, the company’s chief financial officer for Turkey said that the business would move its operations closer to home to reduce disruption from global supply chain issues and avoid higher shipping fees.

The products it plans to make and export from the country are currently shipped from East Asia to the Middle East or Europe.

"Due to shipment problems we faced during the (Covid) pandemic, we are attempting to have more manufacturing in Turkey," chief financial officer Kerim Nisel told Reuters. "We all saw in the pandemic that diversification is so important," Nisel said. "It might not be a good strategy to produce items in one country and then try to transport them all around the world."

The IKEA executive declined to estimate how much capacity would be moved to the transcontinental country.

The move follows a growing trend that has seen retailers moving away from manufacturing centres in Asia triggered supply pressures and hikes in transport costs.

Last week Italy’s fashion brand Benetton revealed it would change the location of its production, also bringing manufacturing to Turkey, as well as Serbia, Croatia, Tunisia, and Egypt.

Hugo Boss also reportedly has plans to locate its manufacturing operations nearer to its markets.

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