THE WOOD PROCESSING INDUSTRY

THE WOOD PROCESSING INDUSTRY
THE WOOD PROCESSING INDUSTRY
www.sario.sk
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THE WOOD PROCESSING INDUSTRY
Industry overview
The wood processing industry is a minor industry within the Slovak economy. However, recently an
increase of production has been recorded indicating rather inflow and expansion of foreign companies that
stimulate the continuous rise since 2003. Formerly state-owned sawmills have been partially taken over
by foreign companies.
Forests in the Slovak Republic are partially in private ownership, but despite this fact the state maintains
a very significant position on the market for industrial supply. As a result, many producers often ask the
state to guarantee the supply of wood mass, but these tend to be rejected and some of the extracted
wood continues to be exported.
A very specific situation arose after the devastation of great forest areas by an unusually strong
windstorm in late 2004. During the subsequent period, wood from fallen trees, including those in
protected areas, had to be processed, and as a result the total supply on Slovak market surpassed the
5.2 million m 3 for the year 2003. GDP for the forestry in 2006 was still being influenced by the sale of
wood from the 2004 calamity, reflected in about 0.8% of GDP.
Structure of forested land
The Slovak Republic is among the countries with the highest rate of forestation in Europe. Forested land
in 2006 made up approx. 41% (2,007 ths. ha) of the total area of the country. In comparison with 2005
this represents an increase by 834 ha, making it possible to say that this represents a continuing
increase. Forests are mostly located in the northern parts of Slovakia that are more hilly while the
southern parts of the territory are used as agricultural land.
Trend in forestation of land and timber land:
2100
2000
in ths. ha
1900
1800
1700
1600
1500
1970 1980 1990 2000 2005 2006
year
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THE WOOD PROCESSING INDUSTRY
Comparison of forestation in selected countries (in 2005, as a %):
Hungary
21.5
Poland
30
Czech rep.
34.3
Slovakia
40.5
EUROPE
Austria
44.3
46.7
in %
Forest composition by species:
In terms of forest composition by species, there is a larger share of deciduous trees (59.2%) compared to
coniferous trees (40.8%).
Norway Spruce Maple Beech Mixed coniferous Locust Tree
Silver Fir / Giant Fir Ash Oak Mixed deciduous Poplar
Pine Birch Hornbeam Mountain Ash
Common Larch Mountain Pine Alder Turkey Oak
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THE WOOD PROCESSING INDUSTRY
Forest composition by species in Slovak forests (2006):
Tree species Share (in %)
Spurce / Fir 26.1 / 4.0
Pine / Larch 7.2 / 2.4
Other coniferous 1.1
Coniferous together 40.8
Oak 13.4
Beech / Hornbeam 31.2 / 5.7
Maple / Ash 2.0 / 1.4
Robinia / Birch 1.7 / 1.4
Elm / Alder 0.8
Poplar / Willow 0.9
Other deciduous 0.7
Deciduous together 59.2
Supplies of raw materials
In 2006 15,561 ha were forested, including 6,305 ha forested through natural regeneration. The share of
natural regeneration has almost doubled since 1990 and currently represents approximately 41% of total
forestation.
Standing volumes of wood are increasing and in 2006 reached 443.8 mil. m 3 of barkless wood matter,
with average stock per hectare reaching 232 m 3 . Still increasing volume of wood stock is mainly
influenced by the existing age composition of Slovak forests, with an abnormally high share of the mostincremental
medium age levels.
In a European context, Slovakia is relatively rich in raw wooden material needed for domestic processing
and as a result the majority of inputs into production come from domestic sources.
Timber felling in Slovak forests has shown an increasing tendency over a long range. In 2004 it reached
8,357.2 m 3 , including 5,150 m 3 of coniferous timber.
Incidental felling created 51.1% of the total amount of felling (74.4% of this coniferous forest) which
significantly contributed to exceeding the annual planned felling by nearly 19%.
The capacity of Slovak forests allows for an average annual harvest of approximately 6.5 mil cubic meters
of wood. Half of the harvest volume is made up of coniferous trees. The windstorm calamity in 2004
caused the harvesting of 5 mil cubic meters of coniferous wood, and the total harvest in 2004 was 8.3 mil
cubic meters, most of which were spruce and beech.
Total amount of timber felling in 2004:
Total amount of timber felling (in ths. m 3 )
8 357.2 100%
coniferous 5 150.0 61%
deciduous 3 207.2 39%
Incidental felling 4 266.0 51%
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THE WOOD PROCESSING INDUSTRY
Stocks of timber in 2005 -2006
Indicator (ths. m3) 2005 2006
Total stocks 438 905 443 780
Coniferous stocks 207 354 209 799
Deciduous stocks 231 551 233 981
Stocks per ha in m3 229 232
The highest demand from sawmills and furniture producers is for spruce and pine trees (III. grade
quality), which are found primarily in central and northern Slovakia. In year 2003 the production of
coniferous wood of this quality comprised a 52% share of the total supplies of raw softwood. As for
production of III. grade hardwood, the figure was lower at 24%.
The following table lists the supplies of spruce (including spruce-fir and pseudotsuga) on the Slovak
market in year 2004 (in m 3 ):
Quality grade State owned* % Privately owned % Total %
I. 116 0.007 171 0.02 287 0.01
II. 10 092 0.62 2 222 0.30 12 314 0.52
III.A 386 949 23.46 34 186 4.67 421 135 17.68
III.B 692 725 42.00 444 418 60.71 1 137 143 47.75
IV. 18 738 1.14 3 585 0.49 22 323 0.94
V. 399 584 24.23 171 194 23.38 570 778 23.97
VI. 53 850 3.27 21 366 2.92 75 216 3.16
Stump wood 16 424 1.00 19 491 2.66 35 915 1.51
Raw logs 70 786 4.29 35 451 4.84 106 237 4.46
Total 1 649 264 100 732 084 100 2 381 348 100
Source: Ministry of Agriculture of the Slovak republic
* including military-owned forests and Tatra National Park
For wood of lower quality used mostly in pulp mills and chemical operations, the largest share presents
pulpwood with 37% on total supplies of softwood and 66% on total supplies of hardwood in year 2003.
Ownership and prices
More than half (60%) of Slovak forests is administered by the Slovak Republic through the state company
Lesy SR (Slovak Forests), which also manages forests belonging to unknown owners. The rest (40%) are
in the hands of private owners, municipalities and the churches.
The price depends of the particular type and quality of the wood. In the case of wood from coniferous
trees, it is possible to estimate the growth in prices. The windstorm calamity in 2004 influenced not only
the volume of wood mass but also the market prices, which dropped. For example, a cubic meter of
coniferous fiber cost more than 1,000 SKK in 2006 but was only 800 SKK in the year 2000. On the other
hand, the price for coniferous fuel wood has climbed by more than 85% to more than 500 SKK per cubic
meter.
Prices have also risen for deciduous wood. The highest quality mass has increased its price by more than
half and the price for heating wood has doubled in price.
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THE WOOD PROCESSING INDUSTRY
Export of wood
Foresters say that only those types of wood that cannot be processed in Slovakia are exported. Before the
windstorm calamity in 2004 approximately 1.1 mil cubic meters of wood was exported. After the calamity,
in 2005, this figure was 1.8 mil cubic meters.
Future projections
The outlook for years 2010 – 2020 is counting on growth of the spruce wood of qualitative group III A.
However, this plan is still subject to the actual share of accidental extractions, which were significantly
influenced by the windstorm in 2004, and on the quality of the wood.
Current estimates for the restoration of spruce forests are for only a 30–40% representation of spruce in
areas where there has previously been a 90% share.
At the moment, the average age of spruces is 67 years and indicates an unfavorable development
towards lower quality and a higher risk in jeopardizing the health and the assurance of production in the
future.
Regarding the prices, economic predictions say that the prices shall be under constant pressure as the
companies keep investing into their processing facilities and the wood supply capacities are limited. Thus
the fight for shall make the prices rise.
Structure of production
Wood processing companies can be divided into three categories:
- sawmills
- pulp and paper producers
- furniture producers
Sawmills
Domestic sawmills are typically small and use older technologies. An imbalance can be observed between
their supply and processing capacities. In general, this branch has begun to grow due mainly to the
foreign investments.
Most larger Slovak sawmills have been taken over by foreign companies. This is also the case for Bučina
Zvolen, in the past one of the most important Slovak deciduous wood sawmills. It was taken over by the
Austrian company Kronospan. On the other hand, Smrečina Banská Bystrica, a processor of coniferous
wood, is still owned by Slovak entities.
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THE WOOD PROCESSING INDUSTRY
Important companies:
Kronospan
Rettenmeier
Skipper Investment
Smrečina Hofatex
Doka Industrie
PRP Veľký Krtíš
Source: Trend Analyses
Austria
Germany
Luxembourg
Slovak Republic
Austria
Slovak Republic
Produces fibrewood and wooden
flooring.
Established a daughter company in
Prešov and also bought part of the
Bučina Zvolen company and glue
production line from Chemko Strážske
Sawmill services and construction
wood. It is the only large capacity
sawmill in Slovakia. Bought the
sawmills in Liptovský Hrádok and
Polomka.
Bought the sawmill and plywood
company P.F.A. Lozorno, Amico Drevo
in Oravský podzámok and Slovincom in
Hurbanovo.
The new Slovak owners (since 2003)
initiated large investments. The
company is currently focusing on the
production of insulation boards and
energy production from woodchips and
wood residues.
Produces mostly construction material
and pellets. Started in 1994 as a joint
venture of Smrečina and Doka
Industrie.
Currently the largest Slovak-owned
sawmill. Only those of Rettenmeier and
Skipper are larger.
Pulp and paper producers
The consumption of paper in Slovakia is very high at more than 85 kg per capita per year, yet domestic
production is higher than consumption. The lack of wood is the key problem faced by producers. This
problem is usually solved by the import of wood mass from Ukraine, Hungary and Belarus, which on the
other hand makes the transportation more expensive. Growing consumption also significantly helps
wrapping-paper producers.
Important companies:
Mondi Business Paper SCP.
Smurfit Kappa Štúrovo
Germany
Netherlands
The largest pulp and paper producer
in Slovakia.
Currently suffering from a decrease of
the net profit and value added.
Bukocel Hencovce Slovak Republic The only Slovak pulp mill.
SHP Group
Metsä Tissue
SCA Hygiene Products
Source: Trend Analyses
Slovak Republic
Finland
Sweden
Focusing on the Balkan and Russian
markets.
Previously Tento Žilina, the company
invested large amounts into
modernization.
Increasing production in order to
overcome a drop in revenues.
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THE WOOD PROCESSING INDUSTRY
Furniture producers
Furniture producers in Slovakia are focused on exports. Retail of furniture has been growing over the past
years but the Slovak market is still relatively small.
Important companies:
Swedwood
Lind Mobler
Sweden
Denmark
Runs factories in Trnava, Závažná
Poruba and Malacky. Daughter
company of IKEA and the largest
furniture producer in Slovakia.
Produces upholstered furniture for
IKEA and exports almost all of its
production.
Furni Finish Belgium Produces in Tupá and Veľký Krtíš.
Decodom
Ekoltech
Source: Trend Analyses
Slovak Republic
Slovak Republic
Largest Slovak–owned company.
Most of the production is sold to
Germany.
Constantly growing Slovak company
producing for IKEA.
Geographic overview
Skipper
Investments
Mondi
Metsä
Rettenmeier
Kronospan
Bukocel
Decodom
SCA Hygiene
Lind Mobler
Smurfit
Kappa
Ekoltech
Furni Finish
Doka
Industrie
Swedwood
Furniture producers Sawmills Paper and pulp producers
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THE WOOD PROCESSING INDUSTRY
Development of Investments
Development of investment activities in 2000 – 2006:
(in mil SKK) 2000 2001 2002 2003 2004 2005 2006
Total investments 1 775.3 2 367.1 3 195.1 7 221.8 5 301.0 5 241.1 3 187.3
Into material assets 1 725.9 2 331.9 3 137.3 7 133.1 5 255.5 5 209.4 3 049.9
Into immaterial assets 49.4 35.3 57.8 88.7 45.5 31.7 137.4
Investments into
technologies
Annual growth index (in
%)
Source: Statistical Office
1 268.5 1 865.6 2 341.4 6 217.3 4 342.3 4 378.9 2 779.8
x 131.5 135.0 226.3 73.5 107.6 58.5
Largest wood-processing investments in Slovakia in 2006:
Investment
in MEUR
25
20
15
10
5
0
Rettenmeier
Holding AG
Germany
Doka Industrie
GmbH
ARTEL SPA /
Bivium B.V.
Italy / Belgium
Exports
Development of exports in 2000 – 2006:
(in mil
SKK)
Production
of pulp and
paper
Paper
products
including
packaging
Cumulated
index
Source: Statistical Office
2000 2001 2002 2003 2004 2005 2006
11 468.5 11 161.9 17 117.3 15 970.4 18 333.7 18 864.2 20 927.8
11 625.3 14 581.3 8 797.8 8 608.7 9 187.4 10 406.3 12 297.3
100 111.5 112.2 106.4 119.2 126.7 143.9
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THE WOOD PROCESSING INDUSTRY
University education in the wood industry:
Town University Faculty
31 December 2007
Students
graduates
Zvolen
Technical University
Zvolen
Environmental science and
Production
630 133
Forestry 968 109
Wood Technology 1752 170
Total 3350 412
Success stories
Successfully established companies (with the assistance of SARIO):
Company name Country of origin Location in Slovakia Year
Scottish Woodlands Great Britain Humenné 2002
Nefab Sweden Levice 2004
Kronospan Holding Austria Zvolen, Prešov 2005
ONTE Spain Sobrance 2005
ARTEL SPA / Bivium B.V. Italy / Belgium Lisková, Ružomberok 2006
Doka Industrie GmbH Austria Banská Bystrica 2006
Rettenmeier Holding AG Germany Polomka 2006
Kvist Holding Denmark Moldava nad Bodvou 2007
Elastoform Germany Brezová pod Bradlom 2003
Compagnucci Italy Bánovce na Bebravou 2005
Swedwood Sweden Trnava 2005
Companies that were granted investment incentives:
Company name
Year
Investment
(in mil. SKK)
Kappa a.s. 2003 735 6.8%
Rettenmeier Polomka
Timber, s.r.o.
2006 675 18.6%
Aid intensity
Doka Drevo s.r.o. 2006 472 21.32%
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THE WOOD PROCESSING INDUSTRY
Useful contacts:
Slovak Association of Woodprocessing Companies
PhDr. Peter Zemaník
Generálny sekretár
T. G. Masaryka 24
960 53 Zvolen
Slovak Republic
tel.: + 421 045/5330 278, + 421 045/5206 806
fax: + 421 045/5330 278
email: info@zsdsr.sk web: www.zsdsr.sk
Lesy Slovenskej republiky, š.p.
(Slovak Forests)
Nám. SNP. 8
975 66 Banská Bystrica
Slovak Republic
tel. + 421 48 43 44 111
fax: + 421 48 412 59 04
email: lesysr@lesy.sk
web: www.lesy.sk
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THE WOOD PROCESSING INDUSTRY
Slovak Investment and Trade Development Agency
Martinčekova 17
821 01 Bratislava
Slovak republic
Tel: +421 2 58 260 100
Fax: +421 2 58 260 109
e-mail: sario@sario.sk
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