Croatian Wood Industry Worried about Italian Investment

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Is there enough wood for everyone?

The Italian investment in a parquet factory in Vukovar, despite the announcement of possible 500 new jobs, may have far more negative than positive consequences for the Croatian economy, according to the Wood-Processing Industry Association of the Croatian Chamber of Commerce (HGK), reports Jutarnji List on September 14, 2017.

The statement explains that the investors, in order to proceed with this investment, want the state to provide it with raw materials in the amount of 50,000 cubic metres of oak per year.

That is, according to the HGK, problematic because, based on rules of Croatian Forests public company regarding the allocation of raw materials, the maximum amount of logs which a single company can receive for a new contract is 20,000 cubic metres, which means that the investment would further jeopardise the competitiveness of local producers.

“An investment that would secure 50,000 cubic metres of oak to any new investor would at the same time be a death knell for dozens of Croatian small and medium-sized companies because, if you provide to someone quantities which are not available, you first have to take them from someone,” warned the president of the HGK’s Wood-Processing Industry Association Daniel Smiljanić.

Members of the Association are afraid that the deal would be detrimental to the Croatian wood industry and want to know how it is possible that one company can get twice as much of raw materials as all other businesses.

They point out that the industry employs more than 20,000 workers in Croatia, has a surplus in foreign trade, and exports 9 percent of all Croatian exports. Also, it contributes to employment and the development of rural areas.

Smiljanić also emphasised that small and medium-sized producers were listed as a priority in the Strategy for Wood Processing and Furniture Production from 2017 to 2020. “If this investment is realised, that priority will remain just a theory,” Smiljanić said.

In early February, Florian Group from Italy presented in Vukovar a project to invest in the construction of a wood-based factory in which it was reportedly ready to invest 25 million euros and employ about 500 workers.

Translated from Jutarnji List.


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