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
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