Wood Processors Optimistic About 2012: Construction Market Seen Most Promising In Europe

12.02.2011 By Ioana David

Wood processing companies are optimistic about 2012 and either have investments in progress such as Egger or are thinking about expanding production capacity, such as Austria’s Kronospan intends to.

As the two companies, along with Holzindustrie Schweighofer, the market leader by sales, are among Romania's top 100 exporters, investments in boosting volumes can contribute to the next year's economic growth, writes Business Construct magazine in its December issue.

The investments announced by the wood processing companies will give a boost to a market already past EUR1 billion a year if taking into account last year's volumes of the top five companies, as revealed by analyzing the data reported to the Trade Registry.

Primarily driven by exports, as well as by the domestic market, the business of Holzindustrie Schweighofer, Kronospan and Egger is becoming more and more visible in the economy, as the three companies ranked 28th, 49th and 75th among exporters in the first part of this year, according to National Statistics Institute data.

Holzindustrie Schweighofer was also among the top ten companies by profit last year, while Kronospan announced that sales were 10% higher in the first nine months of 2011 compared with the corresponding period of 2010.

"Romanian construction market remains the most promising in Europe on medium and long term. It remained close to EUR10 billion even during the crisis," says Oana Bodea, representative of Kronospan. "Investments in major infrastructure projects are expected in 2012, along with significant European projects and an increase in the residential sector."

The Austrian group operates in three areas in Romania (Brasov, Sebes and Constanta - central and SE Romania).

The group budgeted EUR290 revenue from the operations in Brasov and Sebes for this year, up about 10% on 2010, and estimates remain optimistic.

"We completed next year's budget and took into account 10% growth for Kronospan in Romania (...)," Oana Bodea said. She added Kronospan planned to boost the production capacity of the plant in Brasov at the end of 2011 without revealing the value of the investment.

The company makes oriented strand board (OSB), particleboard and medium density fiberboard (MDF) in Romania.

Kronospan expects demand on the domestic and foreign market to remain constant in 2012 and plans to launch new products.

The cumulated volume of operations of the three Austrian companies, Holzindustrie Schweighofer, Kronospan and Egger stands at over EUR700 million on the local market, which reflects the investments made. Egger, for instance, has ongoing projects announced last year, among which a EUR150 million investment in an OSB plant.

One more thing that proves the wood processing industry is attractive to investors is that US Harvard University has operations in Romania indirectly. Investment fund Phemus Corporation, registered at the same address as Harvard Management Company, an entity of the US university, is the largest foreign owner of forests in Romania, and also owns a plywood plant, which posted EUR7 million revenue last year.

(English version by Loredana Fratila)