On the way to Lunca Ilvei, a small community in a long range of forested hills north of Bistrita, our car feels the full effect of our ‘do-little’ government. Miles and miles of crumbling roads.
We are en route to one of the last remaining Romanian-owned timber factories. This factory is much more than a business. It is the lynchpin of an integrated system of local development that sustains an entire community, keeps families together and restores our faith in capitalism.
The woodworking factory in Lunca Ilvei does not waste a single piece of wood and provides free heating for the local schools, milk factory, and greenhouses.
What follows is a story of survival, tradition, patriotism and the very broad shoulders of one good man: Mr Iugan.
“In 1991, I resigned as mayor and I went to my basement, my grandfather’s former workshop, to find my wood-working tools. And today, I pride myself in the fact that my son, my daughter, my son-in-law, and my daughter-in-law all work in the factory. They all work in production. My grandchildren work in the company during the summer, so that they can get to know this trade. That makes my grandchildren fifth generation woodworkers.”
Emil Iugan, the owner of the timber factory, Silvania International, has four fingers missing on his right hand, a sign that “production” is still in order. Even though he has accumulated a fortune of over one million euros, he still lives in the village of Șanț, in a home built on a hearth where his grandparents once lived.
Getting started
“In 1993, I bought an old reciprocating saw from Germany that was used to cut wood during the First World War. I still have it now. It is ready to be showcased in the museum. Later on, I put another saw beside it.” This is how Iugan’s story began.
A few years latter, the local wood factory was about to go bankrupt. It was a tangle of machines that made no sense. Mr Iugan took of over the factory with nothing but common sense. Today, the 200 employees, of which 80 are women, are scattered around the eight acre production facility.
The machines were built by the great communist enterprises. The former managers of the factory, together with the previous owner, were keen on repairing them and keeping them in use.
The oldest such machine is the Regina (Queen), produced by the Soviets in 1952. It is the Queen that gave Lunca Ilvei energy independence before the term was fashionable. The Queen is still in operation today.
In order to survive in a market where Austrian giants like Schweighofer and Kronospan purchase the majority of quality wood, this small company from the Bistrita region operates by one simple principle: 100% of all raw material must be utilized. The bark, twigs and waste are all transformed into marketable materials.
Here's how it works:
The company takes part in auctions, whether it’s for wood “on foot” (not yet cut) or logs. If they have the winning bid, the wood is taken to the factory.
Between 60-66% of the purchased wood has a circumference of less than 35 centimeters. It is sorted by quality and size – then it’s scanned. Scanning is important because tree trunks in this region still contain ammunition remnants from the two World Wars.
Since they cannot afford to waste anything, the inferior wood is ground and transformed into biomass. Part of the biomass feeds the central furnace in the factory, which then heats the kindergarten, school, gym and two other businesses in the community. The rest of the biomass is sold.
One of the factory’s objectives is to offer young people a workplace so that they won’t leave the community in order to find work
The remaining wood is converted into chipboard and timber, and beginning next year, it will be transformed into frames for homes. Emil Iugan is proud of this development. His beliefs are a mixture of ideologies that on paper contradict themselves, yet somehow work together on a practical level.
“Since we are in a mountainous area, we were never forced into collective farming. We maintained a sense of respect for work and for property. I’ll tell you one thing… it’s your choice to write it or not.
The Communist system, good, bad, or whatever it was, left behind three fundamental components for the forestry industry. First, it left forests, they were not destroyed. Second, our forestry industry may not have been at the top of the game but it was good. We were in the top three furniture producers on a global level. Third, it left behind skilled workers. We destroyed the industry and the forest is on the verge of being destroyed.
Most of the good workers have either aged or left the country.
Here in Lunca Ilvei we have risen out of the ashes. We are responsible for developing the concept of local wood production and we need to take it seriously. Everything is used, everything to the last twig. The value of the business should bear fruit in the community, through salaries, income tax and other forms of tax. There’s a saying: ‘You slaughter the cow and take only its bell’… of course you have the option of being wasteful, but it doesn’t help with anything in the long run”, says Iugan.
Iugan encourages his employees to value education: “When I took over the factory, the director’s son was in fourth grade. Now, he has a doctorate in high-efficiency electro-tech systems and has completed his studies in Denmark. This is where he grew up: in the factory.”
Between the pressure of multinationals and the muddled legislation, Iugan can’t seem to grasp why he is struggling to make ends meet in his own country, especially while huge companies are making massive profits out of its natural resources.
“We make use of everything down to the last twig. We use biomass and set the raw material aside for chipboard, a new approach that was not used in the past. We are working on a technological system that will allow us to produce the cross- laminated panel system called X-LAM. Cross-laminated timber is a structural alternative to cement and iron and is a huge opportunity for Romania.”
The vast majority of wood harvested in Romania is exported and then processed into high value wood products (like cross-laminated timber) which is sold at 100 to 200% more than it was purchased for. The Lunca Ilvei factory is committed to processing and selling high value wood products in Romania. This is how employee wages will increase.
Philosophy
“We have tried to integrate the factory into a local development system that uses the two resources found in this mountainous area: forest and grass. In the forest, by using pinecones, gathering seeds and wood. While in shrubbery, using a variety of things from medicinal plants to virgin pastures, hay and animal husbandry,” explains Iugan.
At the core of Lunca Ilvei economy is the mountain household. Unless the household system is strong, there is little hope for rural development.
“There are two essential elements in a mountain household: family and the land. And the two are inseparable. Family must consist of at least two generations who have a property and are able to live off the land. When land is separated from family, the land becomes barren, arid, and alien. The family without land is upended, lacking in resources, identity and in value. The people become dependent on the government for social services. People in this situation have the means to provide for themselves. Impossible! This should not be allowed. What has become of the peasant household: an 80-year-old and his 10-year- old grandson with blisters on his hand.”
Emil Iugan shares these ideas in university lecture halls when he is invited to speak about the sustainable use of natural resources.
The State
At the beginning of this story, I mentioned that the roads from here to Bistrita-Nasaud are not very good. The State, rather than helping the people, has not done it’s job. What could be done to solve this problem and alleviate the workload?
“The state should enact some simple laws, allowing the local resources to stay within the community. It’s not normal that we gather the resources and send them off to Bucharest where two or three men – I won’t mention any names – redistribute them back. Why do I need to go to the government and ask who knows who if I can get permission to lay asphalt on a street in my village? And when you’re halfway through the process of getting permission, the government changes and you’re left with no funding and no roads. Is this normal? That is what’s going on in this region on a daily basis.”
In 1990, the Romanian State owned 127 timber factories. The majority of them went bankrupt while foreign investors bought the others. In many of the cases, the “investors” simply wanted a warehouse for the tools and machinery with the objective of selling them as scrap metal.
Mr. Iugan is a survivor, visionary and role model.