The jump in wood prices has almost closed a company that has been in business for 30 years: this year it has hit us hard.

For the conversation with Arūnas, we met not at a wood production company run by him and two other shareholders, but at a hotel owned by the company and also located in Biržai.

He immediately says that a hotel is not a business, but a hobby and a place where it is convenient to receive guests for conversation.

“And our business is wood products,” he says, and when asked what he does, he laughs to make it easier to say what he doesn’t do.

“It is from the exterior details, fences, saunas, summer houses, rest houses to wooden houses,” he says.

The manager says they use almost no aspen and black alder for Lithuanian wood production, and only for the production of saunas and loungers, and all production is made of imported wood, mostly imported from Russia (70%) , as well as Finland and Sweden (30%). percent)

“This year the proportions are changing a bit, we will probably start to send more from Finland and Sweden, but it is not politics that is to blame, but the price differences,” he explains.

After mentioning the incredible rise in lumber prices this year, the manager says this is a separate topic for the interview, but agrees to talk about the challenges.

“It just came to our notice then. We even wondered if we shouldn’t close after 30 years of work.

Here everything is very simple: in January we buy dry firewood for 200 Eur, and currently we pay 445 Eur plus transport. Prices have more than doubled.

The only downside is that world prices for wood futures have started to fall, so we expect prices to fall in the fourth quarter, ”he says, adding that the rise in prices has affected the company, for so to speak, unexpectedly.

“It just came to our attention then. The chain is such that we are manufacturers and our partners in Europe are the recipients of the orders.

It was practically a year ahead of those orders, and at that time there was no such big increase in lumber prices in mind. And since January, they have been dancing between 30 and 40 percent, and the prices have been agreed with the end customer and will not be raised. This means talking to all partners and sharing the losses, ”says the manager openly.

According to him, this is how the company has been working and producing “at least” for some time, and is currently balancing on the brink, but price increases have not been avoided.

“Our products have risen in price by around 60% since the beginning of the year, in proportion to the increase in the price of wood,” he says, and says that it is not very clear what the situation will be in the future.

“Now the orders that we receive, we will produce them somewhere in 6-7 months, it is still a question of what the price of the wood will be, but we still accept orders.

Now, if the order is higher, we even introduce a condition in the contract that we will produce it at the price that will be the price of the wood in the market, giving hope that it could be lower ”, the director openly says.

Currently, the company is managed by three shareholders, one of whom is Arūnas. In total, it has been in operation for 30 years and, including the hotel, has about 223 employees.

True, almost all the company’s products are exported, and in Lithuania, as they believe, only 1% remains.

“We are not aiming to sell here,” says Arūnas, saying that the company has several partners abroad, through which orders and wholesale trade are carried out.

“The partners get involved in advertising, communicate with the customer, coordinate orders with us, and we produce,” says the manager. The most important partners, he adds, are in Germany and the Netherlands, where around 60% leave. products, but in addition to Europe, they are also found in more distant countries such as Australia and New Zealand, Japan.

When asked to recall the start of the business, Arūnas says it all started with a completely random question about whether there is a good lumber billet company in Lithuania.

“We didn’t even think about that tree, we worked in construction, but they asked us if we could produce it and we agreed, even though we didn’t have a machine or sawmill.

Then we bought logs in one place, cut, planed and collected blanks in another, rented a car and drove to Germany three at a time.

When we went there, we successfully sold the boards, then we got more orders and we started to see how we prepare everything ourselves. And so we expanded, ”remembers Arūnas.

Now the company’s turnover is about 8 million. Eur, and the company, according to Arūnas, grows every year.

“It just came to our notice then. And when the pandemic broke out, we had an explosion of orders,” he adds.

Currently, about 30 trucks leave Lithuania each month with the company’s products, and Arūnas specifies that production requires between 1,000 and 1,300 cubic meters of wood.

We also drive with the guide to the company’s own facilities. He says there used to be collective farms and pigs in the place where the company is now based, and then they bought everything.

“I think there are about 5-7 thousand here in total. Square meters area,” says Arūnas and takes a brief look around.

As he explains himself, linear production is not here, everything is combined because individual orders are implemented.

The work is also done in one shift and, if necessary, the work can be completed with overtime.