Heavy wood price increases by Romsilva, the National Wood Regie, which over last year came to 85%, have brought processing industries to the verge of crisis.
While producers put the blame on the lack of raw materials, some 40% of the wood mass offered for sale has not been sold, according to representatives from wood processing industry associations – furniture, cellulose and paper, stratified products and forestry.
Representatives from this sector anticipate a crisis in the area of wood products for the processing industries, as well as price rises on the domestic market and a loss of foreign customers. This comes after sold wood mass prices last November and December were 60% higher as compared to the corresponding period of 2003.
The furniture industry, which has a value of almost one billion euros per year, is among the hardest hit.
“Romanian furniture producers sell their products to European Union countries, which is a mature market and would not tolerate even a 2-3% price increase. If they increase their export prices, plants risk losing their customers,” said Mihai Gadea, general manager of Samus Mex, the largest factory in the Mobexpert group. Samus Mex has 1,150 employees and turnover last year reached 13 million euros.
On the domestic market, price rises for furniture are inevitable this year. Dumitru Petcu, manager of the 3,000 employee-strong furniture producer Alprom Pitesti, says a 10% price increase is expected on the domestic market. Alprom has an annual turnover of over 20 million euros.
“A furniture producer has a net profit margin of 7-8%, which is lower than in other industries, and this price increase for raw materials has been the cause of disastrous net results for us in the final months of last year,” explained Petcu.
Being export oriented, the furniture industry was also hit by the appreciation of the domestic currency against the euro late last year.
In line with Romsilva’s revenue and expenses budget, which is published in the Official Gazette, the regie last year posted gross profits of 980 billion ROL (24.5 billion euros).
The regie’s annual advertising costs came to 20 billion ROL (500,000 euros).
“The price increase should have been accompanied by improved quality of the wood sold, more wood plantation and a limiting of the massive export of logs,” added Gadea.
Romsilva representatives had not announced their position by the time of going to print. However, one reason Romsilva gave at the time of the price rises was the need to adjust domestic prices to those on the external market.
georgiana.stavarache@zf.ro