July 29, 2016 - 11:20 AM EDT
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Increase in Inflow of FDI to Create Opportunities for the Wood Manufacturing Market in Bulgaria Through 2020, Reports Technavio

Technavio analysts forecast the wood manufacturing market in Bulgaria to grow at a CAGR of close to 4% during the forecast period, according to their latest report.

The research study covers the present scenario and growth prospects of the global wood manufacturing market in Bulgaria for 2016-2020. The report also segments the wood manufacturing market on the basis of type of process into the three segments, which are manufacture of wood-based panels, sawmilling and planing of wood, and manufacture of other wood products. The manufacture of wood-based panels accounted for 48% of the wood manufacturing market in Bulgaria, followed by the sawmilling and planing of wood with 35%, and the manufacture of other wood products with 17% of the market share.

Technavio chemicals and materials analysts highlight the following three factors that are contributing to the growth of the wood manufacturing market in Bulgaria:

  • Growth of furniture industry
  • Increase in inflow of FDI
  • Availability of raw materials

Growth of furniture industry

According to the Ministry of Foreign Affairs, Denmark, Bulgaria ranks 38th in terms of furniture exports. Approximately, 40% of the wood production in Bulgaria is export-oriented. From 2012, furniture exports have increased by 7% on a year-on-year basis, primarily due to increase in demand from EU countries and from large wood retailers catering to international markets.

Increase in the production of solid wood furniture, such as chairs, tables, upholstered furniture, furniture for schools, and bedroom furniture is fueling the growth of the furniture sector. “The use of advanced sawmilling and wood processing technologies, wherein logs can be processed into desired shapes directly, has lowered operational costs, which has contributed to the growth of domestic manufacturers,” says Chandrakumar Badala Jaganathan, a lead analyst at Technavio for textile, fiber, and composites research.

Increase in inflow of FDI

With the growth of the furniture industry, large companies are setting up facilities closer to forests to reduce transportation costs. Kronospan, an international company that manufactures wood-based panels, has invested USD 110 million since 1997 for the modernization of its plant in Burgas. In 2011, the company invested an additional USD 119 million to enhance its production capacity of particle boards to 17.65 million cubic feet per year. In 2006, Kastamonu Entegre, a Turkish manufacturer of wood-based panels, invested USD 100 million for the setting up of its chipboard factory in Gabrovnitsa. “With this increase in inflow of FDI, manufacturers can invest in modernizing their existing wood processing facilities, which will increase yield and lower operating costs,” says Chandrakumar.

Availability of raw materials

Around 36% of the land in Bulgaria is covered with forests. Natural calamities such as forest fires, floods, and wind throws have depleted the forests, which has led to the implementation of plans for afforestation by the government. The afforestation plans implemented by the Institute for European Environmental Policy led to the re-forestation of 40,000 hectares in Bulgaria. Overgas, a Bulgaria-based producer of natural gas, has spearheaded 14 afforestation campaigns, leading to the reforestation of 38.3 hectares. These measures are resulting in the easy availability of wood for the wood manufacturing industry.

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About Technavio

Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.

Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.

If you are interested in more information, please contact our media team at [email protected].

Technavio Research
Jesse Maida
Media & Marketing Executive
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UK: +44 208 123 1770

Source: Business Wire (July 29, 2016 - 11:20 AM EDT)

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