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          climbed to the highest of 425 million square metres in 2019   of the wood flooring industry itself the overall share of
          and fell to the lowest of 322 million square metres in 2023.   the floor paving materials market at home and abroad is
            The volume of laminate wood flooring and solid wood   facing a crisis of decline.
          flooring sales experienced a steep declining trend but sales   •  Sales of wood flooring are becoming more and more

          of solid wood composite flooring increased steadily and the   difficult as products and services do not effectively
          sales of bamboo flooring remained stable. At present there   meet market demand. The urgent need is to change
          are more than 93 national standards and industry standards   from product oriented to user experience oriented, the
          closely related to wood flooring covering product testing   implementation of demand driven, "can let consumers
          methods, safety and environmental protection, services and   in the use of products or services to be met" as the
          supporting facilities, equipment and raw materials, grade   standard for enterprise transformation and upgrading.
          and evaluation.
            Currently, mechanisation, automation and digitalisation by   Thriving timber industry in Heze City
          enterprises coexist but their development is unbalanced in   As of June 2024 there were 7,716 wood processing enterprises

          different regions and different enterprises. The wood flooring   in Heze City of Shandong Province, the annual processing
          industry is shifting from product driven to innovation and   volume of wood reaches 31 million cubic metres, the output
          data-driven.                                       value of wood processing is more than RMB110 billion in 2023.
            Many wood flooring companies have set up technology   There are more than one million employees and its wood
          centres, R & D centres or research institutes, conducting   products are exported to more than 100 countries and regions.
          research and development mainly around innovative floor   Exported products cover medium and high-density fibreboard,
          connection methods, innovative substrates or surface decoration   furniture and wood floors and wooden crafts.

          materials, optimising product structure, upgrading product   Statistics shows that in the first quarter of 2024 there
          performance and enriching product functions.       were 789 wood processing enterprises with output value
            The number of authorised invention patents in wood   of RMB20 million or more in Heze City, an increase of 170
          flooring industry reached 514 in 2023. New products such   enterprises compared with August 2023, accounting for 28
          as solid wood floors for floor heating, impregnated paper   percent of the city's industrial enterprises.
          veneer solid wood composite floors, stone-wood plastic floors,   The revenue was RMB17.89 billion and the profit was
          reconstituted bamboo floors, moisture-proof laminate floors   RMB1.42 billion, up 15 percent and 31 percent year-on-year.
          are popular in domestic and foreign markets.



          Existing difficulties in the wood flooring industry                                                 Freerange Stock
          •  With the rise of labour costs and product homogenisation
            it is hard to get out of the middle and low-end market
            for wood floors.
          •  With the rise of foreign trade protectionism and the
            evolution of domestic market demand China’s wood
            flooring is facing the situation of declining competitive

            advantage and brand advantage.
          •  Due to the vicious competition and lack of innovation
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