Ikea is making money and clean energy
Updated 22:06, 27-Nov-2019
Catherine Newman

Ikea is aiming to make a positive contribution to the planet in three ways - though changing the way it creates and recycles its products; changing the way those products are used; and by investing in environmentally friendly projects, the CFO of its main operating company told CGTN.

Juvencio Maeztu, CFO of Ingka group  which manages the bulk of Ikea's international stores, told CGTN's Paul Barber that the company was pushing ahead with a "circular" production process that prioritizes recycling and reuse of materials. At the same time it is encouraging consumers to get more use out of products for example by renting out furniture.

The third strand of the sustainability project is an investment in renewable energy which has seen Ikea set up 1.6 million solar panels and own 524 wind turbines. Maeztu said in September the group produced more green electricity than it needs, a trend it will continue.

"We have decided not to stop at 100% [of Ikea's energy needs] but we have decided to keep growing," he said.

Maetzu was speaking as Ingka reported a rise in both sales and profits. 

Sales rose online as well as from new stores and at existing outlets.

Online purchases now account for 10 percent of total sales. 

Ingka Group is the main franchisee of Ikea, accounting for 90 percent of total sales and managing 374 stores in 30 countries. 

In its fiscal year to the end of August, the group's net profit rose 24 percent to $2 billion, with sales up 5.3 percent to $42 billion. 

This boost in online sales comes at a time when China is planning to increase the number of Ikea stores in the country, with three new outlets scheduled by 2024. There are currently several Ikea stores in China including those based in Shanghai and Beijing, Tianjin, Chengdu and Guangzhou. 

Juvencio Maeztu, Ingka Group's Deputy CEO and chief financial officer, said: "We have a healthy growth in all the sales channels: we are growing online by almost 50 percent over last year, which is massive."

He added: "The last six months have been very good for us in China, that's why we are committing to keep investing in China." 

At the beginning of November, the Inter Ikea Group, the Luxembourg firm that owns the Ikea concept and brand, said the company had earned a stable net profit for its non-standard fiscal year of $1.65 billion.

Maetzu said: "We are transforming and performing at the same time, this is part of our plan over three years, we are really transforming the organization and the company."

Ikea has said in recent years that it is aiming to open smaller stores in city centers that will attract greater numbers of urban shoppers who do not have access to cars. 

The company also said it will provide a furniture rental service to reduce the business's impact on the environment. 

Maetzu said: "We achieved a milestone in September, where we produce more energy than we consume from renewables and we are very proud."