Wood processing
Industry Background and Scope
The wood industry in BiH has a long tradition, with forestry going back hundreds of years and significant wood processing companies established as early as the second half of the 19th century. In former-Yugoslavia days, BiH was regarded worldwide as a good source of low-cost, high quality forest resources and wood products. During that period, some very large, sophisticated, fully-integrated companies were developed that covered every aspect of timber processing, from harvesting to retail furniture sales. Companies such as “Sipad” and “Krivaja” were known on the global market for furniture and other wood products, and indeed owned production and sales facilities in many foreign countries, including the USA.
In the late 1990s, a large number of privately-owned firms (including many small sawmills) were established in the wood processing industry in BiH, and it is estimated that there are some 1500 now operating. Some of these have managed to adapt to new market demands, obtaining commercial and development loans, investing in new equipment, and increasing the quality of products.
The industry turns out a wide variety of products, including construction timber and joinery, prefabricated houses, processed wooden material, and complete finished furniture. The main source of raw material for the wood products industry is the extensive BiH forests, which provide high quality soft and hardwood timber, especially beech.
The wood processing sector is a critical component of the BiH economy. It represents at least one-fifth of the country’s exports, ten percent of GDP, and fifteen percent of total employment.
Sector Competitiveness and Sales
The political turmoil of the 1990s in former Yugoslavia resulted in the loss of previously established markets. Meanwhile, changes in consumer preferences, advancing technology in the industry, and the growth of manufacturing industries in Asia changed the face of the global wood industry. Many BiH companies, struggling to compete, moved down the value-added chain, from more processed products to furniture parts or simply plain sawn lumber.
Sales and exports of the BiH wood sector have tripled over the past five years, but this was from a very low base. By moving up the value-added chain and becoming more competitive, Bosnia’s substantial supply of raw material for wood processing could contribute far more to national and household incomes.
Some 60% of wood sector production is exported, but finished furniture makes up only about one-quarter of exports. Lumber represents well over half of exported wood products. However, there is evidence of gradual growth in the BiH furniture production and exports, with the largest export markets being Germany, Croatia, Serbia and Montenegro, Italy, and the UK.
|
About us
Wood processing and forestry
