HGK: Italian Investment in Vukovar Locks the Key for Small and Medium Wood Companies

The Italian investment in a parquet factory in Vukovar, despite the announcement of 500 jobs, may have far greater negative consequences than benefits, warned the Association of the Wood Processing Industry of the Croatian Chamber of Commerce (HGK) on Wednesday.

In a statement, they also emphasize that the investor conditions the realization of this investment on the state providing raw materials, 50 thousand cubic meters of oak annually.

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This is, they say in HGK, problematic because according to the letter of understanding from Croatian Forests that regulates the allocation of raw materials, the maximum amount of logs that one company can obtain for new contracting is 20 thousand cubic meters, further jeopardizing the competitiveness of domestic producers.

“An investment that will secure any new investor 50 thousand cubic meters of oak will simultaneously lock the key for dozens of Croatian small and medium companies. Because, if you give someone an amount that is not available in reserve nor sufficient now, it must be taken from someone else,” warned Daniel Smiljanić, president of the HGK Association of the Wood Processing Industry, in the statement.

Members of the Association fear that this is favoritism at the expense of the Croatian wood industry and question the criteria by which someone can receive double the raw materials compared to what other companies can obtain.

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They remind that this industry employs more than 20 thousand people, achieves a surplus in foreign trade, and participates with 9 percent in Croatian exports. In addition, it contributes to employment and the development of rural areas.

Smiljanić also emphasized that small and medium producers are listed as a priority in the Wood Processing and Furniture Production Development Strategy from 2017 to 2020.

“If this investment is realized, that priority will remain just dead letters on paper,” said Smiljanić.

Otherwise, the Italian Florian Group presented the investment project for the construction of a final wood products factory in Vukovar at the beginning of February, stating that they are ready to invest 25 million euros and employ around 500 workers.