Tropical Timber Market Report(2022-7-8)

As recession and inflation fears start to grip economies around the world, consumer spending has declined. Countries in Southeast Asia are planning ahead with new initiatives and cooperation with other countries. Would these be enough to stimulate the market? ITTO shares more about the latest developments around the world.


Malaysia /Vietnam cooperation

The Timber Exporters’ Association of Malaysia, the Malaysian Furniture Council, the Vietnam Timber and Forest Product Association, the Binh Duong Furniture Association, the Handicraft and Wood Industry Association of Dong Nai and the Handicraft and Wood Industry Association of Ho Chi Minh City have signed a memorandum of cooperation (MoC) to further strengthen economic cooperation between the two countries.

The CEO of the Malaysian Timber Council, Muhtar Suhaili, said Malaysia can benefit from Vietnam’s high investment in furniture manufacturing and its access to EU markets through Vietnam’s free trade agreements.

This Agreement will support the ‘Initiative for ASEAN Integration’ launched to narrow the development gap and enhance the Association’s competitiveness as a region.

The Agreement could also help defend the interests of both countries against external regulations that affect the interests of the timber industries.


Technology and agarwood

Agarwood, also known as gaharu in Malaysia, is a fragrant dark resinous wood formed in the heart of the tree trunk that is used in the production of incense, perfume and other consumer products. It is produced either from naturally or scientifically-induced infected Aquilaria trees, which are native to South-East Asia.

A company, DAdvance Agarwood Solutions, hopes to position itself as a Malaysian agarwood plantation and product specialist having perfected the inoculation technology.

Currently, DAdvance has the capacity to produce 50,000 litres of vaccine, which is only sufficient to inoculate about 6,780 trees per month. Each cycle of new vaccine production needs about four months to mature before it is ready to be applied on the trees.


Rubberwood supports multi-billion-ringgit export industry

The Malaysian wood furniture industry’s success owes much to rubber plantations. The rubber tree when felled for replanting represents a raw material upon which a multi-billion-ringgit export industry has been created.

With the emergence of rubberwood as an alternative source of timber for the furniture industry Malaysia is now among the leading producers and exporters of wooden furniture to more than 160 countries worldwide.


Engineered wood industry for Sarawak

The Sarawak Timber Industry Development Corporation (STIDC) will be promoting the use of engineered wood in the state’s housing and building construction sector following a collaboration with Woodsfield Glulam Manufacturing and Australia’s Tilling Timber.

STIDC signed a Memorandum of Understanding with the two companies which will see a feasibility study to be conducted for a joint venture investment to develop an engineered wood plant in Sarawak utilising timber from planted forests.


Strong demand drives up exports – challenges remain

Malaysia’s total trade in wood and wood products increased by 10 percent to RM8.64 billion in the first quarter of 2022, from RM7.89 billion in the same period in 2021.

Timber industries around the world are trying to adjust to the disruption in the global supply chain. Sanctions on Russia have removed a vast volume of wood products from the market and at the same time there is growing demand. Both issues are having the effect of driving up prices.

Malaysia’s exports of wood products between January and March this year increased by 8.2 percent to RM6.54 billion compared to RM6.04 billion a year ago. Wooden furniture remained the big earner at RM3.1 billion, or 47 percent of first quarter exports followed by plywood (RM896.5 million; 14%) and sawnwood (RM640.9 million; around 10%). 

The top three export destinations for Malaysia’s wood products in the first quarter 2022 were the United States (30%), Japan (15%) and China (9%). Malaysia’s exports of wooden furniture were mainly to the US (59%) followed by Japan (6%) and Singapore (4%).

There was also a 16 percent rise in the imports of wood products to RM2.1 billion in the first quarter 2022 versus RM1.8 billion a year ago with imports from China (37%) followed by Indonesia (20%) and Vietnam (9%).

Among the materials imported were sawnwood and veneer which increased by 54 percent and 57 percent, respectively, year-on-year. However, there was a drop in imports for particleboard and logs.

In related news, Sarawak’s timber industry saw a recovery in exports in 2021 compared to 2020 driven by rising prices for major products such as plywood, logs, sawnwood and fibreboard.

Exports in the first quarter of this year increased 26 percent year-on-year to RM1.04 billion with Japan accounting for almost 60 percent of this trade. 

Other major markets were India, RM119 million, US, RM61 million, the Middle East, RM44 million, Taiwan RM43 million and the Philippines RM41 million. In terms of products, plywood exports increased 23 percent in value in the first quarter of 2022.


Sarawak/Australia deal on forest plantation development

The Ministry of Plantation Industries and Commodities has initiated collaboration between Sarawak and Australia on forest plantation developments including R&D and technology transfer from Australia. 

Recently, meetings were held with the timber industry in Sarawak and the Sarawak Timber Association.

Accompanying the Ministry delegation were the Counsellor (Agriculture) at the Australian High Commissioner to Malaysia, Sanjay Boothalingam and Research Officer (Agriculture), Hafiz Burkhan.

The Sarawak State Government aims to establish 1 million hectares. of forest plantations by 2025 to provide a new source of timber for the downstream processing industries.

In other news from Sarawak, the State government has adopted legislation regulating carbon storage and the reduction of carbon emissions following amendments to the state Land Code.

The amendments deal with regulation and control the use of land for the storage, retention, capture and sequestration of carbon dioxide and other greenhouse gases as part of measures to mitigate climate change and global warming.

This made Sarawak the first state to enact legislation enabling industries operating in the state to comply with international requirements to reduce carbon emissions under the United Nations Framework Convention on

Climate Change. Sarawak is said to have the largest carbon storage capacity in Malaysia.

The Sarawak forest industries now have an investment framework to promote conservation and reforestation activities for carbon sequestration and thus generate carbon credits.


Added value products from oil palm stems

Malaysia has approximately six million hectares of oil palm plantations that need to be cleared and replanted every 20 to 25 years. Of the felled palms, only a small percentage is utilised for value-added goods. It has been suggested that oil palm trunks could be a raw material for furniture and construction materials.

A company established in June 2020 is Malaysia’s first manufacturing plant to commercially convert unused oil palm trunks into high-performance wood panels for the furniture and building industry.



IFCC accreditation becomes a voluntary forestry certification system

The National Accreditation Committee (KAN) officially operates the Indonesian Forestry Certification Cooperation (IFCC) accreditation as a voluntary forestry certification scheme. IFCC is the first voluntary forestry certification scheme operated by KAN. 

IFCC is the national governing body of the international forestry scheme, the Programme for the Endorsement of Forest Certification (PEFC).

The Secretary General of KAN, Donny Purnomo, said KAN operates several international schemes for the private sector adding that with an agreement with the Ministry of Environment and Forestry KAN opened the IFCC for sustainable forest management.


Indonesian Wood Panel Association backs FOLU Net Sink 2030

The Indonesian Wood Panel Association (Apkindo) has backed the implementation of Indonesia's commitment to FOLU Net Sink 2030.

The Chairman of Apkindo, Bambang Soepijanto, said downstream producer members of Apkindo will take steps so that sustainable forest management will play its role in climate change mitigation.

Bambang said Apkindo will encourage its members to increase the yield of wood so that the utilisation of this raw materials is more efficient.

Apkindo is an organisation that accommodates industries that produce veneers and plywood including laminated veneer lumber (LVL), particleboard and other wood panel products.

Currently, Apkindo has 45 active industry members that contribute to the national export foreign exchange for timber products of an average of US$11.7 billion per year.


Digitalisation in support of sustainable forestry development

Digitalisation can play a role in helping the forestry and environmental sectors achieve the targets of Sustainable Development Goals (SDGs) according to Siti Nurbaya Bakar the Minister of Environment and Forestry. 

She emphasised this during a virtual discussion on the implementation of digitisation for achieving the SDG targets organised by Think 20 (T20).

T20 is one of the engagement groups within the 2022 Indonesian G20 Presidency which aims to address global problems through the application of ideas from scientists and researchers across the world.

One example of digitisation carried out by the ministry is the implementation of the National Forest Monitoring System (SIMONTANA). The system provides information regarding spatial-based forest resources data, hotspot monitoring, forest and land fire surveillance as well as water pollution monitoring.


Applications for commercialising environmental services

The Ministry of Environment and Forestry (KLHK) has received many applications for commercialising carbon sequestration and storage.

The Director of Forest Utilisation at the Ministry of Environment and Forestry said there is an opportunity in the Job Creation Law where forestry businesses no longer only be focused on timber and non-wood products but can accommodate environmental services.

The Director revealed that harnessing environmental services could be carried out in production and protected forest areas. Even in forest areas that are included in the Indicative Map for Postponed New Permits (PIPPIB).

The government has issued Presidential Regulation No. 98 of 2021 concerning the Economic Value of Carbon to support the development of a business system for carbon utilisation. The regulations for implementing this provision are being prepared.


Promote multi-business forestry model to optimise potential

The Indonesian Chamber of Commerce and Industry (KADIN) launched the Regenerative Forest Business Sub Hub (RFBSH) initiative to promote multi-business forestry models in the management of production forest.

Director General of Sustainable Forest Management Ministry of Environment and Forestry, Agus Justianto, said that he appreciates this initiative as a step towards the adoption of multi-business forestry concept.

Agus explained that the multi-business forestry concept has the landscape as its basis.

This means that businesses in forest areas can not only utilise wood and non-timber products but can develop and generate income from environmental and other services.

He added, multi-business forestry will encourage sustainable forest management and contribute to the country’s climate change commitments.

Deputy Chairman of KADIN, Silverius Oscar Unggul, said that RFBSH will create an opportunity for dialogue between KADIN and KLHK and related parties.


Private sector collaboration on developing social forest plantations

The Indonesian Forest Concessionaires Association (APHI) signed a memorandum of understanding (MOU) with Fairventure Social Forestry (FSF) to develop a social forestry-based plantation forest.

The MoU was signed by APHI Chairman, Indroyono Soesilo, and FSF Director, Hernica Rasan. The Germany based FSF will work together to develop social forestry in the Forest Utilization Permit (PBPH) concessions of APHI members.

Indroyono said this collaboration is another APHI membership contribution in support of job creation in the forestry sector. Indroyono continued,” the second goal of this collaboration is to create a pilot area that can be used as a reference in the future on how to manage social forestry-based plantation forest”. Another objective is related to the commitment to reduce greenhouse gas (GHG) emissions.


China/Indonesia cooperation in timber sector

The Chinese company Shandong Timber and Wood Products Association and the management of the Sei Mangkei Special Economic Zone, North Sumatra, signed a Memorandum of Understanding (MoU) for the development of an international industrial area.

The Indonesian Ambassador to China, Djauhari Oratmangun, said this MoU was the result of intense negotiations between the Indonesian Embassy in Beijing and the Shandong Association for almost three years.

The Shandong Association, a major business player in the timber sector in China is believed to be able to make a significant contribution to improve the quality of wood production in Indonesia. The chairman of the Shandong Association, Yang Yuelu, said, "This investment will strengthen cooperation between the two countries in the context of the synergy between the Belt and Road Initiative and the Global Maritime Fulcrum.


Regional FSC Standard for smallholders in Indonesia approved

This standard is for the use by smallholders owning plantations in Indonesia (Management Units smaller than 20 ha) and applies to rough wood and non-timber forest products. The standard has been written in easy-to-understand language and provides realistic and achievable indicators relevant to the circumstances of smallholders in Indonesia.

The Regional Forest Stewardship Standard (RFSS) in Indonesia is an adaptation of the approved RFSS for Asia Pacific for Smallholders in Indonesia, India, Thailand and Vietnam.


Indonesia's first wood pellet plant

Indonesian coal producer, Mitrabara Adiperdana, (MBAP) will construct a wood pellet plant as part of its plans to diversify into renewable energy production. The plant is expected to be operational in the first quarter of 2024.

MBAP plans to export the bulk of the pellets from the plant to Japan and will be applying for certification that will qualify the pellets to be used in Japan's feed-in-tariff scheme.

Indonesia exported 366,286 tonnes of wood pellets in 2021 up from 310,546 tonnes in 2020. Indonesia is Asia Pacific's biggest palm kernel shell exporter and the third largest wood pellet exporter after Vietnam and Malaysia.


Strengthening Global Cooperation – the answer to world forest management

Indonesia believes that innovative solutions and strengthened cooperation are needed to address the challenges of sustainable forest management around the world and much will depend on economic recovery after the Covid-19 pandemic and efforts to mitigate climate change. This was the view of the Indonesian delegation at the High Level Roundtable of the 17th Sessions United Nation Forum on Forest (UNFF).

Agus Justianto, Head of the Indonesian Delegation said it was necessary to emphasise the role of the UN Strategic Plan for Forests (UNSPF) as a tool to encourage sustainable forest management based on the principle of "common but differentiated responsibility and respective capabilities" in accordance with the sovereignty of each country.

Some of the issues that must be resolved are bringing together public and the private sectors in the framework of sustainable forest management and to promote sustainable timber trade and food production.


Indonesia/US MoU to support forestry

Indonesia, through the Ministry of Environment and Forestry (MoEF) and the United States, through the United States Agency for International Development (USAID), agreed to work in partnership on the Government of Indonesia’s long-term vision for climate-resilient, low emission development.

A memorandum of understanding (MOU) was signed by MoEF Secretary General Bambang Hendroyono and USAID Mission Director Jeff Cohen.

“Through this MOU, we are pleased to deepen our partnership with the Government of Indonesia to address the challenges of climate change by supporting the MoEF’s leadership on sustainable land use and protecting valuable forests across the country that are so vital for Indonesia’s prosperous, resilient, green future,” said Jeff Cohen.

Among the activities envisioned under the MOU, MoEF and USAID plan to partner to support ongoing reduced deforestation and forest degradation; sustainable forest management, including tree planting and land rehabilitation; management and restoration of peatlands and mangroves to limit greenhouse gas emissions and Indonesia’s efforts in conservation and biodiversity.



MTE to accept local currency as payment for logs

The long-awaited solution, which took almost three months to be announced, finally arrived. The Myanmar Timber Enterprise (MTE) will accept the local currency (Kyat) as payment for logs.

After the Central Bank of Myanmar ordered all export earnings to be converted within days into the domestic currency the result was that millers could not purchase logs as the MTE maintained its requirement that payments must be in foreign currency.

Over the past three months all export earnings were converted to Kyat but could not be used to pay for logs from the MTE. MTE regulations stated the products from the logs for which payment was made in foreign currency could be exported while logs purchased in local currency, generally lower grade logs, could only to be sold on the domestic market.

It is understood that the Central Bank has set a fixed exchange rate of MMK1850/US$ while the market rate is around MMK2100/US$.


Numbers of players in timber sector dwindles

The number of wood product exporters in Myanmar was over 100 between 2010 and 2015 but has now declined to around 50. It has been learnt two big factories, one local and one Indian have recently stopped operations.

The timber industry was one of the top export sectors and was included in the National Export Strategy, an initiative aided by the World Bank. Before 2021 the World Bank had tried to assist development of plantation and community forestry but this has come to an end.



Non-brand furniture 50% of Indian market

According to a report prepared by Grand View Research, an Indian and US based market research and consulting company quoted by the Business Standard, about 95 percent of the non-brand furniture in India is manufactured by small companies and non-brand furniture accounts for more than 50 percent of the India market.

As the Indian economy recovers demand for furniture is expanding fast and demand for wooden furniture, seen as environmentally-friendly, is popular among buyers of readymade furniture. 

Non-brand furniture makers utilise timber raw materials from Nepal, Malaysia and some African countries along with domestic timbers.

Along with other manufacturing sectors, labour shortages especially of skilled workers, is a constant problem as skilled workers are attracted by higher earnings to be made working outside of India in the Middle East and Malaysia for example.


Strong growth but rising prices of concern

Growth in India’s manufacturing sector remains positive, growing at the fastest pace in more than 11 years in May on the back of strong international demand. This was at a time when concerns about the level of inflation dampened business sentiment. 

The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) was at 54.6 in May, well into positive territory.

However, rising prices dented consumer sentiment which dropped sharply in May. The main impact was felt in rural areas because of the export ban on wheat and sugar.

Analysts commented that what is most worrying is that the recent weakening has moved at a fast pace, much faster than the pace of the recent rise.


New timber research centre to be established

To promote the plywood industry, Haryana Chief Minister, Manohar Lal Khattar, announced plans to establish a forest research institute in the State. Khattar said that the State Government is planning to create an industrial zone to attract businesses specifically to provide opportunities for young people.



Wood and product trade highlights

According to the General Department of Customs wood and wood product (W&WP) exports to Canada in May 2022 reached US$21.5 million, up four percent compared to May 2021. 

Overall, in the first five months of 2022 exports of W&WP to the Canadian market reached US$111.2 million, up 6.3 percent over the same period in 2021. W&WP exports to the UK in May 2022 reached US$8.4 million, down 35 percent compared to May 2021. In the first five months of 2022 W&WP exports to the UK market reached US$119.2 million, down one percent compared to the same period of 2021.

Vietnam's wood imports in May 2022 reached 34,5000 cubic metres, worth US$12.6 million, up 29 percent in volume and 28 percent in value compared to April 2022. Compared to May 2021 imports increased by 52 percent in volume and 51 percent in value.

In the first five months of 2022, wood imports reached 121,400 cubic metres, worth US$45.9 million, up three percent in volume and 1.4 percent in value over the same period in 2021.

Imports of log and sawn wood from Africa in April 2022 reached 80,610 cubic metres at a value of US$30.34 million, up three percent in volume and seven percent in value compared to March 2022 and up 0.8 percent in volume and 8.0 percent in value compared to April 2021.

In the first four months of 2022, imports of wood from Africa reached 346,460 cubic metres at a value of US$27.17 million, up three percent in volume and seven percent in value over the same period in 2021.


Vietnam to grant FLEGT licence to wood exports in 2025

Vietnam plans to grant licences under the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade Program (VPA/FLEGT) to W&WP exports in 2025.

This FLEGT schedule was announced at a 17 June workshop held jointly by the Vietnam Forestry Administration (VNFOREST), the Vietnam Timber and Forest Products Association (VIFOREST) and the Association of Handicraft and Wood Industry of HCM City (HAWA).

At the event the co-chairs pointed out that, despite an annual double-digit growth rate, the country’s wood industry is still facing numerous challenges.

Apart from the pandemic escalating political tensions have created more challenges to supply chains, soaring logistics costs and material prices have resulted in higher input costs. Inflation in key export markets has led to a drop in demand. Accusations of material origin fraud also threaten industry development.

To cope with these challenges the government urged domestic businesses to adhere to international market regulations, enhance their capacity and improve competitiveness so as to maintain their foothold in wooden furniture exports.

Echoing this view, a HAWA spokesperson said compliance with regulations on sustainable forestry development is vital to the wood industry, not only for Vietnam but also global markets.

At the workshop the HAWA platform for proving and tracing wood origin was launched. With support from the FAO-EU FLEGT Programme since May 2018 HAWA has worked to remove obstacles in wood origin validation. This is a necessary step to prepare Vietnamese timber and wood products to access international markets, especially the EU.

By applying HAWA system, everyone can search for information to help verify the material origin.


Struggling with global uncertainties

With full order books Vietnamese manufacturers are facing huge challenges in terms of raw material supply, production costs and logistics.

HAWA has identified that the industry is still facing many challenges due to Covid-19 disruptions and geopolitical uncertainties.

The price of raw materials is high even though 70 percent of the material for Vietnam's wood furniture industry is domestically sourced. Logistics prices show no signs of cooling down and are even rising due to the Russian invasion of Ukraine.

At present, Vietnam's wood enterprises that want to keep their markets must overcome the situation together by stabilising product prices



Economy contracts but less than expected

The Japanese economy contracted in the first quarter of 2022 but at a slower pace than estimated according to the government. 

The economy contracted at an annual rate of 0.5 percent according to Cabinet Office data. Consumer spending and other private demand was stronger than anticipated but rising costs are expected to limit further growth.

Japan imports all of its oil, much of its food and various products and has been hit by rising prices for energy and other commodities.

Bank of Japan Governor, Haruhiko Kuroda, has championed a policy aimed at boosting near-zero inflation to around 2% but progress was slow until global prices for oil and other commodities surged in recent months.


Private sector concerned weak yen is hurting the economy

Most major firms have voiced concern over the weak yen saying this is hurting the country’s economy. This was expressed in a survey by the Asahi Shimbun and was a response to the recent rapid depreciation of the yen which has driven up import costs for raw materials and oil.

The yen was trading between 110 and 120 against the dollar until mid-March. But the interest rate hike by the US Federal Reserve Board sparked a sharp depreciation of the yen. The yen fell to around 130 against the greenback in April and hit 135 on 25 June.

Several executives interviewed questioned the Bank of Japan’s (BoJ) continuation of its monetary easing policy as the economic environment continues to slide.

In related news the BoJ Governor has warned that the yen's rapid depreciation is negative for the Japanese economy, adding that volatile currency movements are undesirable and should be stable reflecting economic and financial fundamentals.

Kuroda said “the recent rapid weakening of the yen is raising uncertainty over the outlook and making it hard for companies to draw up business plans so it is negative and undesirable for the economy".



Log and sawnwood stocks accumulating at ports

After the 2022 February Spring Festival both log and sawnwood stocks have been accumulating at ports but, due to slow demand, the inventory of the major wood market dealers has been running high. The ports are overstocked with logs and the stock of logs at Taicang Port have reached a record high of 1.7 million cubic metres, resulting in a sharp drop in both logs and sawnwood imports compared with last year.

According to China Customs, log imports were 18.04 million cubic metres valued at US$3.641 billion, down 30 percent in volume and 14 percent in value from January to May 2022. China’s sawnwood imports fell seven percent to 10.78 million cubic metres.

In May alone, China’s log imports amounted to 4.23 million cubic metres valued at US$888 million, down 20 percent in volume and 14 percent in value. China’s sawnwood imports declined 11 percent to 2.26 million cubic metres. Because of heavy rain in the south and high temperature in the north the logs are degrading especially radiata pine logs.

Mid-year is a traditional off-season for the wood products industry as many regions of China have a rainy season. This year the rain season arrived earlier than in previous years.


Depressed timber demand

It has been reported that prices for gasoline and diesel have been raised which means higher transportation costs for the timber industry and reduced profits for traders. 

Market demand continues to be sluggish and has been down since the beginning of the year.

The very changeable weather and the surging production costs are disturbing wood product manufacturers.


Campaign to promote green building materials in rural areas

A campaign to promote green building material use in rural areas was launched recently by many governmental departments, associations and enterprises. 

The campaign will take advantage of the public information platform and JD online platform for green building materials. This identifies the first list of products and enterprises for green building materials along with identifying the national technical support institutions and partners.

This campaign aims to create a green consumption environment nationwide, advocate the concept of green consumption, speed up the promotion of green building materials in rural areas and enhance the support for green consumption for sustainable economic development.

China has been accelerating research and development, production and standard certification as the foundation to promote consumption of green building materials and has steadily improved the supply of green building materials. 

At present eight green building material industrial zones have been designated as national industrial demonstration bases. China's supply capacity of green building materials has been greatly improved. The national output value of green building materials exceeded RMB65 billion in 2021.

The Ministry of Industry and Information Technology and other relevant departments will actively guide the expansion of consumption of green building materials, encourage the first choice of green building materials in the renovation of rural housing, green buildings, prefabricated buildings, ultra-low energy consumption buildings and other engineering construction projects, accelerate the promotion of green building materials product certification, improve the green building materials standard system, enrich the variety of green building materials products, strengthen the supervision of product certification and production application. 

At present, there are 58 categories of green building materials products.


New standard on MDF

A new national standard on Medium Density Fibreboard (MDF) has been introduced as off 1 June 2022. 

The standard on MDF (GB/T 11718) was released for the first time in 1999 and revised in 2009 and in 2021 (GB/T 11718-2021) and has been implemented as of 1 June 2022.

The test method of formaldehyde emissions has been modified and the requirement of MDF for building materials is added in the new national standard on MDF.

In the new standard, the test method for "physical and mechanical properties" basically refers to the relevant provisions in "Test Method for Physical and Chemical Properties of Wood-based Panels and Decorative panels" (GB/T 17657-2013) with little change in other aspects. 

In addition, explanation is provided on the size of the sample that affects the test operation. In the judgment of results, the calculation of five percent quantile value and 95 percent quantile value is also introduced, so that each testing institution can give the conformance judgment more conveniently. 

In general, the new standard is more scientific.


Debut of faced plywood from automatic production line

The first production of faced plywood has rolled off and automatic continuous production line marking a success for plywood mills in Linyi City, Shandong Province. This paves the way for the transformation of the Linyi wood industry in production of high-quality products to international standards.

As the largest plywood production and export base Linyi City has more than 3,300 plywood production enterprises with an annual output of 36 million cubic metres, accounting for 60 percent of the provincial total.

At present, the "automatic continuous production line of one-step faced plywood" has successfully completed the batch trial production and can be formally put into operation in May 2022.

It is reported that one production line can produce 20,000 standard plywood panels per day (equivalent to the capacity of 20 traditional enterprises).

The number of workers has been reduced from 1,500 to 70 and the mill area has been reduced from more than 13 hectares to seven hectares. The new mill can produce 300,000 cubic metres of faced plywood annually.


‘Intelligent’ production of bamboo particleboard

It has been reported that a company in the Daling industrial zone, Shaoguan City has produced 200,000 cubic metres of bamboo particleboard using an ‘intelligent’ production line.

It is estimated that the annual utilisation of bamboo and bamboo residues will reach 260,000 tonnes creating an output value of more than RMB300 million and expanding employment.


Sterilising wood panels the "new vogue"

Consumers have high expectations for safe products used in the home and are no longer satisfied only with the concept of environment-friendly and no formaldehyde.

The current trend is to antibacterial and sterilised products, the new standard for the wood panel in the industry. 

Products now marketed have antibacterial and mould treatment such as the photocatalyst antibacterial ecological panel, natural bean fragrance antibacterial ecological panel and zinc antibacterial panel. Some enterprises add chitin, nano-silicon titanium self-cleaning agent and zinc and other active ingredients on the decorative surface of wood panel to form a protective cover claiming this blocks bacteria.

Household consumption has quietly changed during the epidemic. The preference for antibacterial products has also prompted manufacturers to step up research and development, even though the market share for antibacterial products in China remains small.

For home building materials enterprises such a trend means new business opportunities.



Indonesia leads rise in tropical wood furniture imports into the UK

The UK imported US$284 million of tropical wood furniture products in the first four months of 2022, which is 23 percent more than the same period in 2021. 

In quantity terms, wood furniture imports were 64,000 tonnes during the four-month period, the same level as the previous year.

This indicates that the rise in value was driven more by price inflation than strong demand.

Import values increased from all four of the leading tropical supply countries to this market in the opening four months of this year compared to last including Vietnam (+28% to US$147 million), Malaysia (+7% to US$56 million), Indonesia (+59% to US$39 million) and India (+39% to US$36 million). 

Imports from Singapore, which increased sharply last year due to shipping problems elsewhere in Southeast Asia, fell back 59 percent to more a ‘normal’ level of just US$5 million in the four-month period.


European sawn hardwood production at highest level since 2008

According to the European Sawmiller Organisation (EOS) production of sawn hardwood in Europe was significantly impacted by the coronavirus crisis in 2020 with a strong decline particularly in France and Germany. 

Overall, sawn hardwood production declined from around 6 million cubic metres in 2019 to just above 5.5 million cubic metres in 2020.

However, in 2021 the situation dramatically improved with a 13 percent increase in production to close to 6.3 million cubic metres. This was the highest level of sawn hardwood production in the EOS countries since 2008 and came on the back of a sustained increase in demand. 

Production is forecast by EOS to decline by three percent this year, back to around six million cubic metres.

The downturn in production comes at a time when sawn hardwood stocks are already at a low level and is due to log supply shortages rather than a downturn in demand. 

EOS suggests that “national and European legislation is curbing the availability of raw materials while many hardwood species remain underutilised”.

According to EOS, hardwood supply challenges in Europe are being compounded by high levels of log exports to China, an issue which has been particularly prominent in France and Belgium where shortages of oak log are pronounced.

Furthermore, hardwood companies that rely on foreign trade are negatively affected by the geopolitical situation: long-distance exports are hampered by high freight rates, pandemic-related tension in China and rocketing fuel prices.


Rebound in European wood flooring demand

According to data published at the FEP General Assembly and Parquet Congress 2022 held 9 and 10 June in Hamburg, the European market for wood parquet flooring was at the highest level for a decade last year. 

While FEP had anticipated an increase in parquet consumption as the market recovered from disruption caused by the COVID pandemic the previous year, the rebound in 2021 was stronger than expected.

FEP figures show that European parquet consumption increased by 6.2 percent in 2021 following a slight 1.6 percent gain the previous year. There was particularly strong growth in the first quarter compared to the same period in 2020.

During the rest of the year, demand continued to grow but at a slower pace as consumers began again to direct more expenditure to other activities such as leisure and travel.

Nevertheless, renovation, and adaptation of homes to new ways of working and living after the pandemic, continued to act as significant drivers of parquet consumption growth.

Consumption of parquet increased in almost all European countries in 2021 according to FEP. Countries such as Italy and France, which were unable to offset losses during the spring 2020 lockdown and reported declines in parquet consumption for the year 2020 as a whole, reported particularly large increases in parquet consumption in 2021 compared to 2020.

Croatia, Romania and Switzerland also reported significant increases in parquet consumption while Portugal is focusing more on exports.

In contrast, countries where parquet consumption recovered more ground in the second half of 2020, generally reported lower market growth last year. This was the case for Scandinavia, Austria, Spain, and Germany.

Parquet production in FEP countries increased even more rapidly than European consumption last year, rising almost seven percent to 82.6 million square metres, a level not seen since before the 2008 financial crisis. Production in all European countries, including non-FEP members, increased by nearly eight percent to close to 98 million square metres.

The largest European producing country in 2021 was Poland, followed by Sweden, Austria and Germany.

Last year, as in previous years, the vast majority of European wood flooring production (83%) comprised multilayer flooring, with 15 percent comprising solid wood and two percent comprising mosaic. These proportions were largely unchanged compared to 2020.

In terms of species preference, the European parquet sector continues to be overwhelmingly dominated by oak which accounted for 81.9 percent of all floor facings compared to 81.8 percent in 2020. 

Ash and beech now make up most the rest of the volume, respectively 5.3 percent and 2.8 percent last year.

Tropical wood species made up only 2.1 percent of flooring manufactured in FEP-countries last year, down from four percent five years before and 15 percent in 2008.

In terms of wood’s position in the total European market for floor coverings in 2021, FEP estimate that wood parquet accounted for around five percent of total consumption of 1.95 billion square metres. Of other materials, textiles supplied 39 percent of the market in 2021, stone/ceramics supplied 22 percent, vinyl 20 percent, laminates 12 percent, and other materials three percent.

The share of wood has remained broadly level at five percent in the last five years. Vinyl’s share has risen from around 15 percent in 2017, mainly at the expense of laminates, stone/ceramics and textiles.

While these figures apply only to flooring, the role of floor coverings in determining the look and feel of a room, and the desire of most consumers to match styles, means they reflect wider fashion trends in the European interiors market.

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  • Last modified on Thursday, 04 August 2022 06:30
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