Homann Holzwerkstoffe is preparing a major reduction in its European wood-based panel production, with MDF\/HDF manufacturing at its Homanit Lietuva site in Pagiriai, Lithuania, set to stop from January 1, 2027. The production break is planned for at least 12 months and could extend to 21 months, depending largely on the development of demand from the furniture industry.<\/p>\n
More than 200 jobs will be lost as a result. The Lithuanian operation currently employs around 255 people, while approximately 20 employees are expected to remain at the site during the period without production.<\/p>\n
The move follows a difficult first half of 2026 for the Homann group. Demand from the international furniture industry has fallen short of expectations, while the cost base of panel production has moved sharply higher. Energy, wood, chemicals and transport have all become more expensive, with increases for some inputs exceeding 50%.<\/p>\n
For the Pagiriai operation, which only started production in 2024, the combination of insufficient orders and high operating costs has proved particularly difficult. Homanit Lietuva management has stressed that the central problem behind the shutdown is the lack of orders rather than losses accumulated by the plant.<\/p>\n
Homann expects the capacity adjustment to have a sizeable financial effect. The group estimates that the measures taken at the Lithuanian site could reduce start-up losses by \u20ac5\u20136 million during the second half of 2026 compared with the first half of the year.<\/p>\n
\u20ac215 million investment faces a lengthy production break<\/strong><\/p>\n The scale of the decision is notable given the size and age of the Lithuanian investment. Homann invested more than \u20ac215 million in the Pagiriai factory, making it the largest investment in the German company's history. The site was designed for annual production of up to 310,000 m\u00b3 of MDF\/HDF, adding substantial new capacity to the group's European manufacturing network.<\/p>\n The project had been expected to move gradually towards profitability as production volumes increased. As recently as May 2025, company owner Fritz Homann indicated that the Lithuanian plant was expected to become profitable in 2027. Instead, 2027 will now begin with production halted and most of the site's workforce leaving the company.<\/p>\n The plant is not currently being prepared for sale. Homann intends to retain the Lithuanian operation and restart production once market conditions provide sufficient demand to support higher capacity utilisation. The company has therefore positioned the measure as a temporary adjustment to group capacity rather than a withdrawal from Lithuania.<\/p>\n A restart will depend primarily on the furniture market. Homanit Lietuva CEO Inga Urbonavi\u010di\u016bt\u0117 has said that stronger furniture demand would be the main condition for bringing the lines back into operation, while greater geopolitical stability could help improve conditions for a recovery.<\/p>\n The shutdown comes at a difficult point for European panel producers supplying furniture manufacturers. Consumption has remained weak in several important markets, leaving producers with limited scope to pass higher raw material and energy costs through to customers. This is particularly challenging for recently commissioned plants, where high utilisation rates are needed to absorb fixed costs and bring production economics closer to planned levels.<\/p>\n Production could remain offline into 2028<\/strong><\/p>\n At its maximum announced duration, the shutdown would keep MDF\/HDF production in Pagiriai offline well into 2028. Based on the plant's planned capacity, the decision therefore removes a potentially significant volume from the European market during the suspension period, although actual output before the shutdown had not necessarily reached the site's maximum annual capacity.<\/p>\n The economic decision also comes after a difficult period in the relationship between the factory and some residents of Pagiriai. The plant has faced complaints concerning noise, odours and environmental issues, as well as protests over its location close to a groundwater protection area.<\/p>\n Lithuanian environmental authorities have investigated several complaints and incidents associated with the site. In March 2026, however, Lithuania's Supreme Administrative Court concluded that the environmental impact assessment for the factory had been carried out correctly and that its construction and operation complied with environmental requirements.<\/p>\n The local controversy is separate from the reasons Homann has given for the coming production suspension. The company has linked the capacity reduction to market conditions and, in particular, insufficient demand from the furniture sector.<\/p>\n The Pagiriai investment was conceived as a major expansion of Homann's production base. Only two years after its start-up, it will instead enter an extended period without MDF\/HDF production. Whether the interruption lasts closer to 12 months or stretches to the full 21 months will depend on how quickly European furniture demand recovers and whether operating conditions improve enough to make a restart commercially viable.<\/p>","protected":false},"excerpt":{"rendered":" Homann Holzwerkstoffe is preparing a major reduction in its European wood-based panel production, with MDF\/HDF manufacturing at its Homanit Lietuva site in Pagiriai, Lithuania, set to stop from January 1, 2027. The production break is planned for at least 12 … Continue reading