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Slovakia's only lumber supplier moves from making railway crossties to crafting cabinets

At the beginning of this century there were 35 furniture manufacturers in Slovakia, employing more than 3,000 people and hauling their production in bulk to western Europe and to the U.S. Some of these companies have carpentered a solid chassis for today's Slovak furniture industry.
While the industry branched out into some ten big-time furniture manufacturers, there is one single trunk that provides them with the lumber necessary for furniture production. It is Bučina (or beech forest in English) a.s., which last year celebrated its 50th anniversary.
Based in Zvolen in central Slovakia, Bučina started as a landmark producer - literally. But from producing telegraphic posts and railway crossties, the company has gradually evolved into a dominant Slovak producer of semi-finished products for the furniture industry.



At the beginning of this century there were 35 furniture manufacturers in Slovakia, employing more than 3,000 people and hauling their production in bulk to western Europe and to the U.S. Some of these companies have carpentered a solid chassis for today's Slovak furniture industry.

While the industry branched out into some ten big-time furniture manufacturers, there is one single trunk that provides them with the lumber necessary for furniture production. It is Bučina (or beech forest in English) a.s., which last year celebrated its 50th anniversary.

Based in Zvolen in central Slovakia, Bučina started as a landmark producer - literally. But from producing telegraphic posts and railway crossties, the company has gradually evolved into a dominant Slovak producer of semi-finished products for the furniture industry.

While fully supplying domestic producers, Bučina increasingly is branching out into the export market. Today, 35 percent of the company's production is exported, of which 17 percent goes to the EU, and the rest heads to neighboring central European countries, Latvia, Uzbekistan, or the Far East, said Jarmila Hotrová, marketing director for Bučina Trade a.s., Bučina's daughter company which handles all of Bučina's trade.

Facing competition

But Bučina is facing competition from abroad. According to František Marko, the marketing director for the furniture trading company M.I.T. Topoľčany, the furniture market recently has been inundated with cheap Polish and Romanian goods.

But he believes the situation is temporary, since the way to success in the furniture market is better quality. Marko, whose firm represents 9 Slovak producers - including Mier Topoľčany, IDEA Nitra, ISIDA Partizánske, ELMOS Bánovce nad Bebravou, Tatran Uhrovec and four producers associated in the Tatra nábytkárne group - pointed out that some Slovak producers are already able to provide quality comparable with the best produced in the West.

Viera Urbanová, marketing officer for the the Swedish furniture manufacturer and vendor IKEA, agreed, quoting the example of Spartan Trnava, which has become the most successful Slovak furniture exporter thanks to its contract with IKEA.

Bučina and other firms in the industry weathered tough times in 1992 and 1993, when performance in the furniture industry dipped due to the fact that eastern markets were truncated, from 1994 on production has been on the rise again, Hotrová said. Bučina has responded to changing market conditions by investing into new technologies that allowed the firm to increase its rate of production and quality. Last year the company invested over 200 mil. Sk ($6 mil.) in these new technologies, Hotrová added.

It has also changed its basic product portfolio. Bučina recently introduced a line of finished products: custom-made wooden family houses which are built and supplied by another Bučina daughter company, Bučina Domeko.

These houses, complying with ISO 9000 standards, were developed in cooperation with the German research institute LGA Nürnberg, which also monitors the production quality.

Bučina aims at increasing its share on both domestic and foreign markets, Hotrová said.

But in order to improve quantity, Bučina has to focus on quality, she added, meaning that the company is striving to put an even larger portion of its production in compliance with ISO 9000 standards.

Bučina has also received several Slovak Gold prizes, awarded annually to high-quality products.

Research and development for Bučina is provided by research institutions such as Lignotesting, the State Wood Reasearch Institute or Zvolen Technical University. The company tries to involve partners from abroad in these projects, Hotrová said, yet since 1996 Bučina does not have its own research and development department.


Bučina At a Glance (1996 figures unless otherwise noted)

No. of employees: 2,141
Turnover :1.5 bil. Sk
Gross profit: 17.6 mil. Sk
Net profit: 10.3 mil. Sk
Total assets: 2.38 bil. Sk
Share capital: 1.53 bil. Sk
No. of subsidiaries: 6
Ownership: Invest-Elam a.s. - 49.32%, IF Istrokapitál - 8.76%, IF PSIPS - 7.63%

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