The wood processing industry of BiH employed more than 25,000 workers in 2020. The structure of the wood processing industry of BiH is relatively unfavourable since there is the largest number of those companies that generate relatively small GVA (e.g., sawmills).
The total sales value of all product categories in 2020 was EUR 1.03 billion, while the total export value was EUR 576 million. Exported value of furniture is on average 40% larger than the exported value of wood and wooden products.
Based on the total exported value of all product groups, it can be concluded that the top 5 export markets for BiH in 2020 were Germany, Croatia, Italy, Serbia and Slovenia. The most important competitors in key export markets come from Poland, China, Germany, Italy and Austria.
Value chain analysis showed that weak links extend through the entire value chain – at the beginning of the chain, it is the supply of raw materials, in its middle it is the lack of professional staff, the need to improve production processes, better capacity utilization and improvement of production technologies, and at the end of the chain, it is the need for information on attractive export markets, potential buyers and current trends, with a proactive market presence.
The concept of the Smile curve suggests that the most value is added in either upstream activities (development of a new concept, research and development) or downstream activities (marketing, branding and customer service), and these are precisely those functions that are insufficiently developed or do not exist in most wood processing companies. In areas that affect the creation of added value, performance and competitiveness of companies (market research, product development, industrial design, marketing, branding, process improvement, etc.), the consulting market is relatively underdeveloped.
The purpose of the Study is to offer relevant insights and recommendations to the wood sector in BiH regarding opportunities to enter new markets and/or increase penetration of existing markets and in the long run ensure the sustainability of the industry.
THE WOOD INDUSTRY IN BOSNIA AND HERZEGOVINA – Performance and Export Analysis study was prepared within the EU4Business project, whose main goal is to increase the competitiveness and innovation of the economy in Bosnia and Herzegovina (BiH). The project is funded by the European Union (EUR 15 million) and the Federal Republic of Germany (EUR 1.1 million), and is implemented by GIZ, UNDP and ILO in cooperation with domestic institutions.
