IKEA does business with low-wage companies, Governor warns

12 December 2007 (09:17)

Governor of Sverdlovsk Region Eduard Rossel met a group of IKEA delegates headed by IKEA GD in Russia and the CIS.

According to IKEA’s top executive, the company would like to put up some lumber mills and furniture factories in Sverdlovsk Region and is willing to invest 2 billion RUR in the project. The Governor was requested to decide what land allotments with some timber reserves nearby would make suitable premises for the plants and factories.

Mr. Rossel replied that Sverdlovsk Region’s timber industry was a rather developed one, so it’s a bit peculiar to see that IKEA only does business with four out of more than one hundred enterprises, and these are the companies where workers get the lowest wages in their branch of industry and have no social benefits or security. A furniture factory in Petrokamensk, for instance, is very nearly bankrupt. The Governor suggested that they should set up an ad hoc committee responsible for considering all the proposals, including the ones where IKEA would have to support an enterprise’s technical upgrading in some ways.

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