The Croatian wood cluster and the Croatian Competitiveness Initiative

Due to its abundant forests and developed craft sector, Croatia is a country with a rich tradition of wood processing. The forestry and wood processing industries represent the basis of the economic development of the mountainous regions of Lika and Gorski kotar that are the largest woodlands of Croatia.
On one hand, the sharp climate as well as the great height above sea level slows down the growth of the woods thus enhancing their resistance and strength: this wood has stood out since ancient times, due to its quality and exceptional characteristics.
On the other hand, sawmills and the processing of sawn timber were amongst the first industries in this region; emerging naturally as the next phase after sawmill processing, which provided production material at hand, the furniture industry experienced stronger development during the late 1950s.

Regarding production, Croatia produces the following: sawn timber of all types and any size, veneer & veneer sheets and pressboards, chipboards, parquet, floorings, wall linings, millwork and builders carpentry, wooden packaging, furniture made from wood or from any combination with other materials, other products from wood, cork and plaited materials, impregnated wood for various purposes (rail sleepers, electricity poles, etc..), numerous other wood products and wood accessories (musical instruments, sporting articles, matches, brushes, paintbrushes, etc..)

Croatia, as we said, has top-quality forest resources, particularly in oak and beech, and a rich tradition of craftsmanship, but the industry is not turning these resources to its competitive advantage and is not focusing enough on creating products with a high level of added value. These have been the reasons behind the economic development activities in the Croatian wood industry, the Spring of 2002, by the Croatian Competitiveness Initiative (CCI).

The Croatian Competitiveness Initiative has been funded by the United States Agency for International Development (USAID), after the request of the Government of Croatia and leading industries within the sector.
The activities in the wood cluster are only a part of the activities of the Croatian Competitiveness Initiative which also has the purpose to improve other industry clusters such as: tourism, to make Croatia more competitive in the worldwide and regional markets through specific actions,

• to remove barriers to investment;
• to strengthen public agencies that provide supporting services to business;
• to contribute to public understanding of the importance to Croatian society of meeting the competitive challenges.

In particular, the Croatian Competitiveness Initiative has identified the wood industry and, more specifically, the manufacture of wood furniture as a source of economic growth and employment with great potential.
The aim of CCI is to develop a consensus among key industry players on strategies to increase the sale of high-value wood furniture products in key export markets and to high-end segments in the domestic market.
In the wood cluster, by bringing together the leading private companies in the industry (both primary processing and final products), the relevant public-sector stakeholders and representatives from academia gathered in the Croatian Wood Cluster - CCI facilitated the development of a concrete national strategy for putting the Croatian wood industry back on the global map. The strategy was released in May 2003.

An ambitious seven-year strategy suggests that measures should aim at:

1. improving marketing and design of products;
2. improving the supply chain;
3. developing better trained and capable workers and management;
4. improving the legal and regulatory environment.

Following the initiatives set up by the strategy of the CCI, the players have taken the unprecedented step to pool their resources and skills.
For example, the cluster invited Croatian designers to propose an integrated solution for high-quality Croatian designed and branded furniture at the IMM fair in Cologne, Germany in January 2004. Their challenge was to create market-oriented furniture that can be produced in mass produced quantities by local manufacturers using top quality Croatian wood. 17 designers applied for the tender and 12 final designs were submited. After two rounds of competition, the international jury comprising Franz Hampel (Garant-Mobel Holding), Edi Snaidero (Snaidero Group), Antoon Oosterhuis (Bylisma furniture) and Andrea Riccardi (architect/designer) chose in a unanimous decision the GOODWOOD Collection designed by Romina Radovic and Krunoslav Kovac to represent Croatian wood industry design at the IMM 2004. The winning design was selected based on five primary criteria: marketability, creativity, ease of industrial production, functionality and conceptual cohesion