Wood industry in crisis, companies stop working

• • • In addition to 40 percent of the unemployed in Prnjavor, it was not possible to find workers
    • Why did the Minister of Labor in Republika Srpska block the import of labor?
    • How much has inflation hit the timber industry

SARAJEVO – The wood industry is in crisis, many companies in this branch are shutting down, and sellers of raw materials call and ask when you will come to pick up the goods, says Edin Dacić, owner of the companies “Standard” in Prnjavor and Ćuprija, companies that produce wooden furniture parts for Ikea .

Edin Dacić is a Swiss businessman born in Belgrade who returned to the region with the company “Dacomet”, offering financing and consulting to struggling companies after the breakup of the former Yugoslavia. He cooperated with seven companies in Bosnia and Herzegovina alone. Today, he is the owner of one of them – “Standard” from Prnjavor.

CAPITAL: For years, you have been insisting on dual education, on creating a quality workforce, has your business ever failed because you didn’t have enough workers?

Dacic: We had a big project with Ikea. We organized everything and provided financing. The contract was on the table and was for five years. It is a contract that I could only dream of when I was a student and when I was founding a company. We could not implement it and I refused to sign it. He implied that we should find 250 people in three years, and I couldn’t even find 25 at that time, it was 2007. And the official number of unemployed in Prnjavor was 40 percent. Imagine 40 percent and no one will come to work for us.

Why did the minister say – there is no chance?

CAPITAL: Did you try to import labor then?

Dacic: I hired two lawyers to interpret the laws for us and explain under what possibilities I can import labor, as is done in Switzerland. I wanted to import labor from China and that’s why I approached the Minister of Labor at the time. He then told me: “Some 40 percent of the unemployed in Prnjavor, that’s maybe 15 percent.” Nevertheless, I went to China, found workers and went to the embassy to announce that I would apply for visas. They asked me how many visas, and I said about the beginning of 60. However, I didn’t even come back from China, they told us that the minister had announced himself, then he told us – “no way”.

CAPITAL: You still succeeded in the end, you imported foreign labor?

Dacic: Yes, after 15 years we managed to bring people from Bangladesh. Now we have invested in automation, we no longer need to import labor. Until last year, I was convinced that we would never use our full potential, because we would not be able to find the workforce.

CAPITAL: When did the crisis occur?

Dkick: When the EU realized it needed people, they opened the floodgates for non-EU people. We really felt it. But we also had a problem until the 2008 crisis of finding a sufficient number of people, I speak for Prnjavor. This was because we were fighting informal work. We worked legally, we paid taxes and contributions, and our competitors did not pay taxes and contributions. We had unfair competition.

CAPITAL: How difficult is it to find managers in companies?

Dacic: It is very, very difficult. It sounds like a cliché, but people are the greatest capital. In my opinion, too little is invested in people, that, at least in my opinion, is due to the educational system that imploded in the nineties – failed. When we look for people, we are aware that we cannot find the people we need. What are we doing? We are looking for talent. We will provide everything else for him.

CAPITAL: What is the current situation, wood exporters complain that exports have stopped. What happens when it comes to furniture?

Dacic: The sale of furniture has come to a standstill compared to two years ago. During the corona, we had to increase the prices of products. In order to maintain the economy, the prices of materials have increased. Helicopter money was given to people to buy, so the first reaction was to raise the price of materials. This has made almost everything more expensive. That trend was present until 2023, when the war in Ukraine began. People realized that they had less money in their pockets and then started to spend money more selectively.

CAPITAL: Because of inflation?

Dacic: Inflation, I read in America and Europe, is up to 20 percent, and hardly anyone has received a 20 percent salary increase. This happened only in our region where wages are increasing, in my opinion, without any macroeconomic basis. This is not the case in major markets. So everything became more expensive, and wages did not rise that much. This is not only the case in our industry, it is the same in others, including the automotive industry. In our industry, many companies stop working because they don’t have a market.

CAPITAL: What is the situation with the raw material?

The situation is such that they call you and ask when you are going to take it. The situation has completely changed as the demand has dropped dramatically.

CAPITAL: Have prices fallen?

Dacic: No, you have the official price, but the price is good, I don’t want to complain. In other markets, it is nominally higher, but tenders are organized. So when you go to a tender, for example in Romania you can offer a lower price and thus reduce the price of wood.

CAPITAL: Have you ever been in the red?

Dacic: In the red? I don’t know of an entrepreneur who started from scratch and was never in the red. Of these seven companies that “Dacomet” financed, although we could not manage them, I think that only “Standard” Prnjavor exists, all the others are no longer working.

CAPITAL: Has your company ever failed?

Dacic: We had a company in Slatina that worked better than Prnjavor, but global trends changed, for logistical reasons, so we were forced to close the company, we formally sent it into bankruptcy, but we didn’t harm anyone.

You can watch the entire conversation with Edin Dacić on the YouTube channel CAPITAL-a.

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