Furniture producers call for action as Kronospan prices shoot up 40%

The Austrian group Kronospan is being accused of using the dominant position it gained on the market after the acquisition of the two Gruppo Frati plants based in Sebes to raise prices for particleboard (the main material used in furniture production) by an astounding 40%.

The Austrians’ manoeuvre may send furniture prices soaring, thus hurting the business of many producers and exporters.

The Association of Romanian Furniture Producers (APMR), which acts on behalf of the industry players, has repeatedly notified the Competition Council, which is now looking into the case.

The biggest furniture producers (Mobexpert and Elvila) will adopt a joint position in this conflict, according to the companies’ presidents, Dan Viorel Sucu and Viorel Catarama.

“Several furniture producers have complained about the exaggerated increase in the prices levied by Sepal Sebes (one of the two plants bought by Kronospan) for various types of particleboard. Prices went up about 40% for raw particleboard and between 30 and 41 percent for the laminated varieties,” said Aurel Rizea, managing director of APMR.

With an annual production worth almost one billion euros, furniture ranks among the most important Romanian industries and is a source of commercial surplus. About 75 percent of the furniture output is exported.

Particleboard is the main material used in the furniture industry, accounting for 20-80% of the total costs, depending on each plant.

Kronospan bought the two Sebes-based Fratti plants about two months ago and became the main supplier of particleboard in Romania. Moreover, all the big particleboard plants in the neighbouring countries – Hungary, Ukraine, Slovakia and the Czech Republic, are also controlled by Kronospan or by divisions of the group.

Furniture producers were taken by surprise by Kronospan’s move. They had thought the Austrian group would invest in a new factory in Romania and expected the Fratti plants to be bought by another player (such as the Eger group).

Although it admits to having raised prices, Kronospan denies holding a monopoly position on the Romanian market.

“As you well know, prices for furniture materials are on the rise internationally and Kronospan has only aligned the Romanian prices to those enforced in Europe. Moreover, the prices of the products made in the Sebes plants have also been brought up to the levels existent in Europe,” said Christian Muller, head of Kronospan Romania.

“This is not a monopoly situation. The Competition Council has analysed and authorised the economic concentration that was created when the two plants belonging to the Italian Fratti group were purchased,” Muller maintained.

APMR, on the other hand, has notified the Competition Council and is holding a meeting tomorrow, which will be attended by all the parties involved.

“The particleboard price increase will have immediate negative effects upon furniture producers that are using these raw materials and will certainly reflect in furniture prices. APMR has sent an emergency notification to the Competition Council and to the Ministry of Economy and Trade,” Rizea explained.
georgiana.stavarache@zf.ro