Kastamonu Romania Heads Toward EUR145M Revenue; Mulls EUR90M Investment
Wood processor Kastamonu, part of the eponymous group based in Turkey, estimates this year’s exports to surpass 100 million euro, 17% higher than in 2014, as foreign trade accounts for 70% of turnover.
“Kastamonu Romania reported 123 million euro turnover in 2014. Out of that sum, 86 million euro was generated by exports. We estimate the turnover to reach 145 million euro in 2015, 101 million euro of which from exports,” said Esat Ozoguz, general manager of Kastamonu Romania.
At group level, Kastamonu reported revenues of 1 billion euro. Part of Hyat Holding – Turkey’s leading player in the wood industry – Kastamonu entered the local market in 1998 when it acquired a 98% control stake in Prolemn Reghin. Prolemn was renamed to reflect its majority shareholder in April 2012. Since then, the platform hosts two production facilities for door skins and particleboard. According to information available on its website, Kastamonu covers 10% of the global demand for door skins, while the particleboard factory is the result of a 150 million euro investment.
“Kastamonu Romania invests around 10-15 million euro annually in modernization and maintenance. We have earmarked 8 million euro for equipment acquisitions and the expansion of our facilities in 2015. We plan to develop an MDF production line, following the completion of our adhesives factory, which is scheduled for 2016,” Esat Ozoguz added.
Kastamonu is one of the leading players in the global wood processing industry, ouitranked only by Austrian group Holzindustrie Schweighofer, Kronospan and Egger, and the new investment will also mark its entry in the MDF sector (Medium Density Fibreboard – used mostly in the furniture industry; more expensive than particleboard).
An investment conditioned by another
“The estimated value of this investment is of 90 million euro, which will generate 250-300 new jobs. With this, the total investment unfolded by Kastamonu in the region amounts to 350 million euro,” added the general manager of Kastamonu Romania.
Kastamonu plans to invest 10 million euro in an adhesives factory, whose construction was scheduled to start in August 2014. The project provides a capacity of 100.000 tons of formaldehyde and 130.000 tons of urea-formaldehyde resins and other products, which should cover the company’s adhesives requirement.
The projects in such production capacities are sensible and usually do not enjoy the support of local authorities. Local press wrote that the municipality rejected the company’s request for a construction permit, while representatives of civil society requested the project be relocated to a different area.
“Bureaucratic delays in issuing the construction permit have postponed the kick-off to this date. We are hoping that a positive resolution will come in the near future. For Kastamonu Romania, the largest investor in the Reghin area, it is extremely important to be able to start and finalize this new investment. It is a de facto investment which will provide a positive outcome for our existing business capacities (in which we have already invested over 250 million euro,” Esat Ozoguz said.
At the moment, Kastamonu employs 865 people, while 200 more are employed through outsourcing, and data sent shows that the door skins factory is the second-largest of its kind in Europe.
“The delays in the permitting procedure for our 10-million-euro investment in the adhesives factory raised a series of concerns at management level. Thus, at the moment we are reconsidering the additional investment in the construction of the MDF line, valued at 90 million euro, taking into consideration the possibility of relocation,” concluded Esat Ozoguz.
The wood industry is a 2.84 billion-euro-a-year market, supported by some 7,000 companies with combined profits in excess of 180 million euro, according to 2013 data provided by the Office of the Trade Register.
Ziarul Financiar, by Ioana David, April 2