Illustrating that success is still within reach during times of economic crisis, a small family company from the Croatian village of Mala Maslenjaca is demonstrating how business diversification is a key ingredient for lasting profitability.
The Kovacic family works together producing firewood, pallets, and briquettes. Although firewood production is not especially complicated, there are still quality standards set by their customers to abide by. They source their raw logs, usually beech, oak, and hornbeam from a state owned forestry group. Tomislav, the youngest son, is responsible for tree harvesting and log transportation, and spends most of his time in the forest.
When the raw logs arrive at the production site, they are immediately split into firewood and put into a large kiln for drying. After the firewood is dried to industry standards, the firewood is stacked into wooden crates for shipment to their final destinations.
"We have orders from supermarket networks in Belgium, France, Germany, Switzerland, and Italy totalling an annual volume of 15,000 cubic metres of firewood. Every day we ship two lorries of firewood," says Marko Kovacic, who is responsible for sales and daily production.
In early 2013, the family purchased a small LT15 Wood-Mizer sawmill to meet their growing need for a steady supply of quality pallet and wooden crates.
"We needed the sawmill in order to make pallets that are then used to pack and ship our firewood," explains Marko. "From the first day the sawmill arrived, it has been sawing, without significant stops, 24 hours a day, seven days a week. We run five crews in three shifts. The first shift runs the sawmill and also the firewood production, packaging and shipments. However, the second and third shift only are tasked with sawing beech logs on the Wood-Mizer sawmill. In this way, we are able to produce 52 firewood containers each day."
With such a large demand for their product, the Kovacic family have additional plans for expansion and developing their business further.
"The construction begins this summer and will be finished in two years," explains Marko. "We have already purchased a 12,000 square metre site for production expansion." Their first stage of expansion includes the purchase of additional firewood processing equipment, an additional kiln, and the building of workshops. The second stage will come the following year, and will expand the briquetting portion of the business to an output of 4 tonnes per hour.
With the new expansion plans in mind, it became obvious to the Kovacic family that the LT15 sawmill would not be able to keep up with the firewood production, and so decided to replace it with the more powerful and functional LT20.
"One on hand, I am very pleased with our LT15 purchase six months ago," explains Marko. "It proved its reliability – it did not have any technical problems during that whole time. Also, we now have a total of five different operators, and each one learned how to use it and maintain the blades. Now we have experienced sawmillers as a result."
"Now that we need to increase our sawmilling productivity, we have opted for the more powerful LT20 sawmill, which was recommended by our Wood-Mizer representative, Filip Pregernik," continues Marko.
The LT20 sawmill is designed for easier and more efficient production of lumber. The hydraulic system for loading, rotating, clamping and adjusting the logs during the sawmilling process greatly increases the time for actual sawing and is less tiring for the operator. The sawmill head is positioned to cut the proper board thicknesses by the computer setworks, and so operators do not spend additional time calculating each cut.
The common ingredient of both machines is the cutting instrument – a Wood-Mizer manufactured, narrow-band saw blade. With a cutting thickness of only 2mm, yields from raw logs increase 70-80% as compared to other sawmill methods. The Kovacic company utilizes Wood-Mizer’s SilverTip blade brand, specifically designed for economy prices in production environments. Although they report running the sawmill almost constantly, they only purchase an average of 10 new blades each month, because they are also sharpening and reusing their old blades.
Their new LT20 Hydraulic sawmill was purchased through Wood-Mizer’s ‘Buy Back’ program, offered in EU countries. Wood-Mizer’s representative inspected the family’s LT15 sawmill, offered an assessment, and then traded in the LT15 for the LT20, reducing the overall cost of the new sawmill.
Businesses that remain open to existing opportunities to utilize current resources to diversify their business are proven to succeed, and the Kovacic family business of firewood and sawmilling are a testament to that with continued growth into other wood markets beyond firewood.Contacts: