Finding delicate geopolitical balance may determine success of Lithuanian furniture maker's Mocksville plant

Yet, SBA Home’s owners could not have envisioned in 2023 that establishing a U.S. footprint would require walking on a delicate tightrope amid the turbulence of the Trump administration’s foreign trade policies.

SBA Home is in the process of converting a 500,000-square-foot speculative building at 134 Gildan Drive in Mocksville into a ready-to-assemble, around-the-clock production center with a planned 250 workforce operating highly automated equipment.

The center is scheduled to start production by year’s end on customizable shelving products for Swedish home furnishings retailer Ikea, adding a new layer to their nearly 30-year supplier relationship.

Yet, Lithuania is on the front line of a tension-filled geopolitical tug of war.

President Donald Trump and his administration’s foreign and defensive officials are driving a startling shift, being increasingly antagonistic to the United States’ European allies while embracing Russian talking points and promoting closer ties with the authoritarian country.

SBA Group debuted in 1990 — the same year as Lithuania declared its independence from the U.S.S.R.

Russian President Vladimir Putin has made it clear he wants to regain the Baltic states of Lithuania, Estonia and Latvia as part of reforming a latter-day version of the Soviet Union.

Even though Lithuania has been a NATO member since 2004, there is growing domestic and European concerns — based on how the Trump administration is curtailing support of Ukraine — of whether the U.S. will honor its pledge to defend any of the Baltic states.

“The U.S. remains a strong partner to Lithuania, contributing to the security of our nation, which reinforces our confidence in investing in this market,” said Jolanta Grasiene, vice president of SBA Group.

Yet, SBA Home could eventually become a beneficiary of Trump’s controversial trade wars.

By establishing the Mocksville plant, SBA Home would not only avoid new reciprocal tariffs that commenced Wednesday beginning at 10% on its imported finished goods, though not on imported equipment and supplies.

The shelving could be manufactured and sold at lower costs in the U.S. than by its international competitors.

“One of the strategic directions of the SBA Group is global expansion,” Grasiene said.

“The latest initiative — an investment in the United States, which SBA began initial preparations for in 2023 — marks a key milestone in the execution of this strategy.

“Our overarching objective remains optimizing cost efficiency to ensure competitive pricing for our customers.”

Jurgita Radzevice , SBA Home’s chief executive, chose politely to limit her discussions on the geopolitical tensions while giving a sneak-preview tour of the plant to the Journal.

“We can only do what we can control,” Radzevice said.

“As Ikea chose to grow in the U.S., we recognized that we had to be in the U.S. to meet their growing needs,” Radzevice said.

“We believe Ikea will be much stronger in the US because of the closeness by which we will be supplying furniture, rather than having to wait for us to import the product from Lithuania" and other countries.

First steps

The Mocksville plant is projected to open in the fourth quarter with an initial workforce of 70.

Radzevice stressed several times that SBA Home will provide good-paying jobs for up to 250 workers by the time the highly automated plant is at full production in mid-2026.

For the first six months of production, the factory will operate with one eight-hour shift, SBA Home spokesman Petras Linge said.

There are plans to add two eight-hour shifts by mid-2026 and an additional three eight-hour shifts by the end of 2026.

“If everything goes well, we will transition to a 24/7 operation in 2028,” Linge said.

“Typically, employees work in one shift and are paid accordingly. If there is an opportunity and they agree to work more hours than scheduled, they will receive additional compensation.”

Radzevice said there are projections of doing $200 million of sales annually from the plant.

The leasing of the speculative building represents “one of the most important selling points for all of the USA” for SBA Home since it will allow the company to grow and expand as Ikea does, Radzevice said.

Radzevice expressed an eagerness for SBA Home to share with the local community a Lithuanian neighborly culture that promotes diversity, opportunity and volunteerism.

“It was your attitude, how friendly you are to entrepreneurs, that made us want to be here,” Radzevice said.

Logistics motive, not tariffs

Trump has preached — during his presidential campaigns and in both terms in office — that his punitive tariffs eventually will persuade U.S. manufacturers to bring production and jobs back to America, and convince global manufacturers to set up shop here.

Radzevice cited that SBA began searching in 2023 for the location of its first U.S. manufacturing plant.

After considering sites in Alabama, Georgia and South Carolina, SBA Home chose the Mocksville plant in December.

Radzevice stressed that Trump’s tariffs were not a motivating factor in solidifying plans for the Mocksville plant.

Rather, Radzevice said it makes economic, logistical and supply chain sense for SBA Home to produce in the U.S. its new shelving product lines rather than import them from its four Lithuanian plants.

“The keys were the locations of raw materials and supply chain,” Radzevice said.

“When it came down to between North Carolina and South Carolina, we started to investigate the working environments. We like how you guys do business in North Carolina.”

Grasiene said opening the Mocksville plant “is driven by business logic: positioning production closer to the customer and maximizing operational efficiency.”

“While the majority of raw materials will be sourced locally upon commencing production in the U.S., certain materials may require importation.

“The applicability and scale of any tariffs will be determined by U.S. regulations, and we will fully comply with these requirements.:

Terry Bralley, president of the Davie County Economic Development Commission, said the community “is excited to welcome SBA, a leader in the world of robotics and innovation.”

“This is a tremendous opportunity for our community, for our workforce, to be a part of a world-class supplier of ready-to-assemble furniture.

“This project also creates an opportunity to develop lasting relationships with other international manufacturers in Europe,” Bralley said.

Tariffs’ pluses, minuses

Many economists say studies have shown that tariffs will be borne mostly by U.S. consumers because they drive up the cost of imported goods and imported parts and equipment used for assembly production in the U.S.

“These tariffs will slow the U.S. economy without meaningfully generating revenue for the U.S. government,” Wayne Winegarden, an economist with the conservative-leaning Pacific Research Institute. said in a report released Feb. 25.

“Tariffs will lead to higher consumer prices, increased manufacturing costs and reduced economic growth.

“Even as a bargaining tactic in negotiating new trade deals, they can lead to a trade war that is equally counterproductive and harmful.”

Once SBA completes the importing of production equipment and deals with the related tariffs, it could result in a more competitive marketplace position compared with pure furniture importers.

“It’s an interesting development given the manufacturer is putting economics ahead of international politics,” said Michael Walden, a retired economics professor at N.C. State University.

SBA Home could “prove a good case study of what happens when a foreign firm invests in the U.S. to open a manufacturing facility, yet it still may be disadvantaged by tariffs in a way that limits is growth, viability and ability to employ local workers,” said John Quinterno, principal with South by North Strategies Ltd., a Chapel Hill research company specializing in economic and social policy.

The uncertainty regarding the U.S. tariff system “is doubtlessly a concern for a company with global operations and supply chains,” Quinterno said.

“Even products manufactured in Mocksville could be subject to U.S. tariffs if they fail to meet certain sourcing rules. And, of course, products made in Mocksville for export could be subject to reciprocal or retaliatory tariffs when they enter other counties.”

Yet, Quinterno said Trump “is right to note problems in the country’s trade system that result from systematic choices by both Republicans and Democrats in Washington to favor the financial, real estate and broader services sector over the manufacturing sector.”

“In the process, much of the United States’ productive capacity has gone overseas.

“Unfortunately, the wild, on-again/off-again, will-he-or-won’t-he approach to tariffs in the second Trump administration simply are sowing confusion and appear detached from any kind of strategic thinking about re-balancing the country’s trade position.”

More than furniture

Although furniture is the biggest revenue sector for SBA Group, it also has a major presence in five other industry sectors: apparel; business services; investment management; modular construction and real estate.

Altogether, SBA Group owns and operates 30 companies with a combined 4,000 employees, with the Mocksville plant being its only U.S. presence.

SBA Home is the management company for the following global home furnishing entities: plants Klaipédos Baldai; Šilutés Baldai; Visagino Linija; and Inno Line; distribution center, Innovo Logistika; and robotics, Robotex.

SBA already is supplying tables, dressers and wardrobes to Ikea.

The shelving products being made in Mocksville will represent new SBA collections for Ikea.

The Kallax-branded products are a series of storage cubes.

The Billy-branded collection is what SBA Home calls “a more modern bookcase, now more customizable and versatile, as we’ve recognized it’s used in many more ways than just for books.”

Inter IKEA Group said in a statement that the two groups “have had a strong partnership in Europe for many years.”

“SBA’s establishment in the U.S. is an important step toward our goal of increasing local sourcing in the American region to support our regional growth agenda, which includes North, Central and South America.

“This goal was announced in 2023 and is not a response to the current tariff situation.”

Ikea said that “increasing regional sourcing in the Americas will decrease the distances to our markets and customers, and reduce unhealthy dependencies on certain geographies and trade links.

“Our goal is to have an optimal sourcing setup for all our markets.”

Furniture legacy recognized

Radzevice said SBA recognized the legacy of furniture making in the Triad, the know-how and craftspeople for generations.

“It was an important fact in our decision,” Radzevice said.

“The automation level here will be quite high. The production equipment we are bringing here are among the newest technology we have. The packing lines will be quite automated as well.

Like Dell Inc., Caterpillar Inc., Egger Woods Products and Ziehl-Abegg before it, SBA is bringing its experts to train the local workforce.

“Before we launch our lines, people will be taught from the beginning to the end of training Lithuanian competence,” Radzevice said.

Radzevice said the growing advanced manufacturing sector in the Triad was another reason to place its plant in Mocksville.

“We like the fact that the knowledge of advanced manufacturing is so high here,” Radzevice said.

“With North Carolina seeing more people immigrating here, it’s attracting some workers because of advanced manufacturing “

Given the Triad’s historic strengths in fields like manufacturing and furniture, and its more contemporary advantages in areas like logistics and transportation, the Mocksville plant “seems like a good choice for SBA Home,” Quinterno said.

“The choice also seems like a logical one given the firm’s close relationship with IKEA, which itself recently announced a sizable expansion of its operations in the U.S.:

Davie cornfields into plants

‘You can’t sell cornfields anymore.”

That was the proclamation Bralley made in January 2019 when the county unveiled a three-phase speculative building plan at Davie Industrial Center on the 73-acre former farmland site at Interstate Drive and Gildan Drive in Mocksville.

Bralley acknowledged at that time Davie officials were taking a calculated risk on the $50 million construction of the buildings, which would be 500,000 square feet, 324,000 square feet and 176,018 square feet.

Six years later, not only is SBA Home leasing the largest of the three buildings, but Hayward Holdings operates a distribution center out of the 324,000-square-foot plant in the business park with a pledge of 200 jobs.

Spec buildings serve as the commercial real estate version “if you build it, they will come.”

However, Bralley could not have envisioned a that time securing the commitment from a Lithuanian furniture manufacturer.

Bralley said Mocksville and Davie would not have landed SBA Home without the speculative building program, private sector partnerships going back decades, and the support of the towns and county working together.

Bralley said the buy-in from public officials and private investors is allowing Davie residents to work in their home county, rather than commute to jobs in Forsyth, Rowan, Yadkin and other neighboring counties.

“These relationships are critical for the county’s ability to win deals and attract new investment and create jobs for our communities,” Bralley said.

In Mocksville’s South Point Business Park, there are 11 tenants occupying 12 buildings.

Bralley said there is an additional 400 aces already zoned in the county and plans for more as many as seven additional speculative buildings.

“Companies today are looking for a building shell that can be customized and up and running in 90 to 120 days,” Bralley said.

“In today’s world of speed to market, communities without a building program can’t compete in our global marketplace.”