Critical success factors of small and medium enterprises in forestry and wood industry in the južnokučajsko forest region

Abstract

SUMMARY Contractors for forest services play an important role in the forestry sector and, nowadays, are a common model of performing activities in forests. In addition, they represent a link between forest owners and enterprises within the wood industry. This research aims to study the characteristics of small and medium enterprises (SMEs) in the forestry and wood industry and the organization of their business processes in the Južnokučajsko forest region (JKFR), as internal critical success factors. JKFR was chosen because it has a high forest cover, a large share of privately owned forests, and the largest primary wood processing company in East Serbia is located within the region and developed furniture industry. Data were collected by conducting surveys with 43 representatives of SMEs from the forestry, primary and final wood processing sectors, which operate on the territory of JKFR. The following internal critical success factors are analysed: characteristics of the enterprises and organization of business processes. The results show that most of the forestry and wood industry enterprises were established after 2000. All enterprises from the forestry and primary wood processing sector belong to the category of micro-enterprises, while 14% of final wood processing enterprises belong to the category of small, and the rest to micro-enterprises. The largest number of SMEs in forestry (77.8%) perform activities in state forests, and 66.7% in private forests. Around ½ SMEs in forestry perform work without long-term contracts with other enterprises. However, most (88.9%) of these enterprises perform forest work independently (using their own machinery). Primary wood processing enterprises most often procure raw materials from private forest owners (77.8%), and final wood processing enterprises from sawmills (78.6%). Most wood industry enterprises have their own processing facilities, while others perform processing in cooperation with other enterprises. The most frequent buyers of products from primary processing enterprises are individuals, while most (78.6%) of final wood processing enterprises sell products through retail.