It is a pity, if we survived the pandemic, to die now for a simple reason: there is no wooden table on the market, because the price of wood is increasing excessively, and our main material is in an artificial crisis, – says the head of the Furniture Manufacturing Company, Daniel Egri

“It is quite clear that all the wood that was imported from Ukraine, Belarus and Russia for the woodworking industry, i.e. panels, no longer exists. Therefore, all these factories will still be supplied with domestic raw materials, and exports are also growing, because there is a crisis and demand at the European level,” he said.

It is clear that the pressure on the wood mass during its operation is fantastic.

Under these conditions, prices rose excessively, unjustifiably.

“We found that there is wood in the forest, that there is annual growth that can be quantified, that we have a national forest inventory that tells us every 5 years what the level of wood is in the forest. We don’t exploit it because we are very stressed that everyone accuses us of stealing wood in the forest, of over-cutting, of shaving the forest. Of course, such situations happen, but it does not concern us,” he explained at the conference organized by the Romanian Association of Furniture Manufacturers.

• If the Poles know how to exploit their forest so intelligently and ecologically, the Finns do the same, what prevents us from doing the same?

“In the conditions when the prices of energy carriers and natural gas have risen, it is clear that the majority of individuals, small businesses, small enterprises, boarding houses and other premises will be heated with firewood. This will increase the pressure on the wood. As a result, we receive high-quality wood, which we process and give it an added value of 57%, throw it on the fire, burn it, warm it up,” he explained.

Under such conditions, says the furniture manufacturer, if there is not enough wood on the market, then an ordinary person will go get firewood from the forest, because he will not sit and freeze a child in the house.

• Even if we would like to develop more, we do not have the infrastructure, access roads, technologies, exploitation possibilities. That is, we will not be able to solve the problem in the coming months.

Energy issues and impact on furniture manufacturers: 7% closed canceled basket

“The question is: How will we survive, if we survive? There are an extremely large number of companies, more than 7% of furniture manufacturers in Romania, that have filed for bankruptcy or ceased operations within the first 6 months,” he added.

• In addition to the general problem with wood, there is also a problem with energy.

“If we paid 631 lei/MW in 2021, then in 2022, thanks to the subsidy and compensation, we pay 1,000 lei. That’s a 60% increase that has to be absorbed by the product, in the cost of the product,” he explains.

• From September 1, we will only be supported at 85%. The difference goes to the market, which is 6,505 average MWh today, compared to 631 a year ago. So we have a 10-fold increase.

This is 280% more than 2 years ago.

“As a result, we pay for energy 30% of the cost of production, and before it was 7%. This is unacceptable. You just have nothing to do. Our partners, as far as they understand us and know about the crisis, they compare with their partner companies from other countries,” Egri said.

Partners of furniture manufacturers do not understand why the price in Romania is higher

“Comparisons with Poland (where this industry is strategically important and companies receive all kinds of assistance) tire me already,” Egri says.

• Our partners, the English, the Americans, the French, even traders from Romania who make money from Romanian furniture, compare us with their imports from Poland: why is the same similar product in Poland, imported to Romania, cheaper than the Romanian one?

“They ask me: do you not have equipment, productivity? Don’t know how to organize yourself? Can’t you make a competitive product compared to the Poles?

Answer: Yes, today we cannot, because we are not supported. We do not have the capacities that manufacturers in Poland have. Nobody cares about us,” Egri says.

Many people in the field may lose their jobs, which will also be felt on the chain

“I will probably have to tell my employees in December to stay at home for 1-2 months until winter passes. In the spring, I have to tell them that, sorry, I can no longer open my business, because my partners gave up on us, and we have no one to produce for, and more than 200 employees are looking for work,” he said.

• My suppliers of panels, glass, hardware, fabrics, polyurethane, metal will have to find other suppliers who do not know who they will be, because all of us with furniture are desperate.

• The social impact will be much larger than our industry and our employees, as well as other related industries.

• We don’t have any Rabla app, we don’t have anything.

What can the Romanian state do to solve some problems

“The best thing the Romanian state can do, with little wood on the market, is to offer us the right of first refusal. I don’t see why we can’t offer 3% to the furniture industry in advance,” he said.

• It solves 50% of all furniture factory problems. We are hundreds of factories.

• This right can only be from wood belonging to the state administered by Romsilva.

A big problem: energy companies refuse to renew contracts with SMEs in the industry

“Another problem is that companies trying to renew electricity contracts now in the fall, most of which are small and medium-sized enterprises, are being rejected by all market players,” Egri says.

1. Or we won’t get a response

2. Or we are told that they are not interested in signing new contracts.

• The explanation given to us is that they can no longer mess with SMEs because through the electricity support and compensation program the Government has not given them money since March and they have not been compensated. They no longer want to work with SMEs under such conditions.

“What is happening here? We will go to the last utility provider in the area, which has exorbitant prices, which is forcing us to close the business,” he says.

• The message is a cry of despair. This is the moment when we can save the industry or destroy it.

“We have for whom we produce. I am criticized that we are 30% more expensive in Romania than in other neighboring countries. We start production at higher prices than our European competitors. This makes us uncompetitive,” Daniel Egri also stated.