Swiss Krono to build Hungarian OSB plant

13 May 2015


The Swiss Krono Group has commenced construction works on a new OSB production facility in Vásárosnamény, in Hungary’s northeastern region. The investment is expected to create more than 100 new jobs. Our Poland correspondent, Jaroslaw Adamowski, reports.

In late February, German machinery maker Siempelkamp said it had an order for its equipment at the planned plant of Interspan, Swiss Krono Group's Hungarian subsidiary. This latest order marks the fourth OSB facility Siempelkamp will supply for the group, the supplier said in a statement.

"The engineering of the plant took place in cooperation with Kronotec, Luzern, Switzerland and the Belgian Siempelkamp subsidiary, Sicoplan," the statement said. "As well as screening technology, resin application and forming and press line, with a 9ft x 28.8m ContiRoll press, the complete finishing line and the pneumatic and mechanical conveyors are part of Siempelkamp's scope of supply."

Barnabás Seregi, md of Interspan, told local news weekly Budapest Business Journal that the firm is aiming to launch production of OSB at Vásárosnamény by June 2016.

In addition to the domestic market, wood for the factory is expected to be supplied from neighbouring Romania, Slovakia and Ukraine, while as much as 80% of the output will be earmarked for export, said a spokesman.

The Hungarian factory will have a total output of 280,000m3 of OSB per year. The ContiRoll Generation 8 press will also enable the company to manufacture lightweight boards.

"The Siempelkamp scope of supply for Interspan includes the control technology systems Pro-IQ.maintenance and Prod-IQ. quality. Together with special automation technology, they will provide for high efficiency of the Siempelkamp plant. The installation of the plant is scheduled to start in autumn this year," the statement said.

The project marks another attempt by Swiss Krono Group to establish itself in the Hungarian market. In 1989, it opened its subsidiary in Vásárosnamény - one of the group's first investments outside Switzerland, but the plant was shut down in 2011 due to the economic crisis. Four years later, Swiss Krono Group is planning to re-launch its operations in northeastern Hungary.

Government support for the project could be one of the beneficial factors. The investment was unveiled earlier this year at a conference which hosted government and company officials in Budapest, the country's capital. Representatives of Swiss Krono Group thanked the Hungarian authorities for facilitating the procedures related to the investment, while Hungary's State Secretary, Levente Magyar, said the government will subsidise the group's investment in Hungary; the amount of state aid is yet to be decided by the authorities, said Mr Magyar.

Compared with some other member states of the EU, Hungary's economy has performed fairly well. A recent forecast by the European Commission (EC) points to the country's accelerating GDP growth, but it also cautions against excessive optimism, saying that the country's dynamic economic growth seen last year is set to slow down.

"In the first three quarters of 2014, Hungary's GDP grew by 3.6% year-on-year, bringing the annual rate to an estimated 3.3%. This is attributed to growing domestic demand, within which the contribution of gross fixed capital formation was significant," the EC said in an analysis it released on February 5, 2015.

"The surge in growth, however, was largely supported by one-off factors, such as higher absorption of EU funds and the central bank's Funding for Growth Scheme of subsidised loans [to small and medium-sized enterprises]."

Should the Commission's forecast prove to be accurate, the Hungarian economy could expand by some 2.4% in 2015, and then by 1.9% a year later, according to the analysis.

This said, Hungary's economy would still grow faster than the European Union as a whole. In 2015, the EU's GDP is forecast to increase by 1.7%, and the aggregate GDP of the euro zone is expected to rise by 1.3%. Next year, economic activity should grow by 2.1% and 1.9%, respectively, according to the Commission.