Established only in 2001, the Baltic Furniture group, BBG, headquartered in Lithuania, claims to be “one of the most booming furniture companies in Lithuaniawith ambitions to become a leader in the European arena.
Until recently, the group comprised four manufacturing companies, which exported around 98% of their production. The fourth and most recent member of the group was Latvian particleboard maker Bolderaja, though as we shall see, that company was sold in July this year.
AB Freda, one of the founding companies of the BBG group and located in the town of Kaunas, makes furniture from particleboard coated with various surface films, as well as with painted finishes, and specialises in living room furniture such as cupboards, chests of drawers, beds and shelves. The factory was extended and new machinery purchased last year, with further expansion planned for this year.
AB Dilikas is located in Klaipéda on the west coast of Lithuania and makes furniture from wood-veneered particleboard and solid pine with UV finishes; it aims to make 52% of its products from solid wood this year.
JSC Wood Team Production has its factory in Vievis, between Kaunas and Vilnius,and specialises in solid wood furniture manufactured from pine and birch and hasa new birch sawmill together with drying and processing, to guarantee its supply ofsuitable raw material.
In mid-2004, BBG crossed the border and acquired Latvian particleboard manufacturer
Bolderaja, one of the largest wood processing enterprises in Latvia.
A series of investments throughout the BBG group in 2003 in new technology, factory premises, staff and quality improvements boosted sales volume from LTL100m (US$176m) to LTL193m and in 2004, sales growth almost doubled.
That acquisition of Bolderaja, whose factory is located close to the Latvian capital Riga, gave the group an assured supply of particleboard and at the same time offered it a buffer against price fluctuations in the market.
Bolderaja makes particleboard in various thicknesses and to E1 grade. It also applies melamine facing to the raw board and manufactures the melamine edgebanding.
Flooring grade is also a speciality.
The newest venture for Bolderaja under BBG ownership was a move into furniture manufacture at the end of 2004, producing simple melamine-faced particleboard cabinets. The plan of BBG was that furniture would represent 30% of the company’s total sales volume this year, in line with the ambitions of BBG group in furniture production at all its factories.
However, on July 25 this year, BBG sold Bolderaja to Kronospan Holdings Ltd of Nikosia, Cyprus.
The investment made in the Particle board line during BBG’s brief ownership was specifically targeted at improving board quality, cutting costs and increasing capacity, which stands at 170,000m3 a year.
The Bolderaja factory was originally established in 1969 as a hardboard producer and it was in 1976 that the company started up a particleboard line with a 16-daylight Rauma-Repola hot press.
In 1986 this press was modernised and enlarged to 19 daylights and in 2002, new platens from Siempelkamp were fitted to the press, together with a number of other investments in the line.
It is equipped with a Metso ClassiFormer, followed by a Texpan weigh-scale and Siempelkamp pre-press, also new in 2002.
Thermal oil is heated by a Klassen boiler, again an addition three years ago as part of the upgrade of the plant.
On-the-line quality control equipment was supplied by Imal of Italy.
Value-adding is a major component of Bolderaja’s production and it has a Rauma Repola short-cycle press line with semiautomatic lay-up to produce melamine faced panels.
The factory produces 41,000m3/year of melamine faced panels.
It is also equipped with a cut-to-size and edging factory alongside the raw particleboard line.
Latvia has a very strong forestry background, with around 40% of its land mass forested, and wood products form the backbone of the country’s export strategy.
The acquisition of the Bolderaja factory by the Lithuanian BBG group seemed a logical move as it brought Bolderaja’s particleboard capacity into the group, which is itself a major consumer of that product.
Investment in Bolderaja by BBG raised production of particleboard as well as bringing furniture production to Riga.
However, Kronospan now owns 86% of Bolderaja and furniture production there will cease, while its other product lines will continue and in fact be enhanced.
The other three BBG companies are unaffected by the deal and continue to produce their furniture ranges as before and the company aims to become a major force in the European furniture industry, with an investment of ❅5m during the second half of 2005.
Investment in the Bolderaja particleboard factory also continues under Kronospan’s ownership and the name will also continue. A new laminating line is currently under installation and plans are afoot to further modernise the raw particleboard production line.
In a country such as Latvia, with its rich wood supply, a low-wage economy and its relatively new status as a full EU member, Bolderaja seems well placed to reward the investment of its new parent.
