The global need for food, fibre and fuel is there enough land to satisfy the demands? Global demand for wood and fibre in the next 20 years KSLA, Stockholm 27 September 2011
Agenda Introduction Industrial wood demand and supply perspectives Conclusions 3
Introduction
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Industrial wood demand and supply perspectives
Global forest industry demand for wood and fibre is sizeable Global harvest and wood use by end-use category, 2009 NATURAL FOREST, PLANTATIONS, PARKS TOTAL ROUNDWOOD HARVEST 3 267 million m 3 SAWLOGS/ PLYLOGS 775 million m 3 PULPWOOD OTH IND WOOD FUELWOOD 496 million m 3 FOREST CHIPS 143 million m 3 1833 million m 3 OTHER ENERGY WOOD PROCESSING SAWNWOOD WOOD PANELS WOOD PULP 364 million m 3 264 million m 3 158 million t Other products 1 414 million m 3 43% of total harvest PLANING PAPER & PAPERBOARD PROCESSING SOLID WOOD RESIDUES 111 million m 3 BLACK LIQUOR PELLETS, BRIQUETTES 12 million t BIODIESEL / ETHANOL RECOVERED WOOD RECOVERED PAPER 199 million t Source: FAO HEAT AND POWER TRANSPORT Energy Forest industry 7
Continued growth in sawnwood demand, mainly softwood Softwood sawnwood demand by region, 1970-2010 and scenario 2030 million m 3 million m 3 Hardwood sawnwood demand by region, 1970-2010 and scenario 2030 CAGR 1,0 % CAGR 1,0 % 2020 2030 2020 2030 Source: FAO, various industry sources and Pöyry, scenario by Pöyry 8
Rapid growth in wood-based panels demand SW substitute million m 3 Wood-based panels demand by region, 1970 2010, scenario 2030 CAGR 2,5 % CAGR 3,4 % 2020 2030 Source: FAO, various industry sources and Pöyry, scenario by Pöyry 9
Continued consumption growth in paper and paperboard Global demand for paper and paperboard 1990-2010, outlook to 2025 600 500 400 300 Million tons 387 million. ton 1.7%/a 540 million ton 2030 496 million ton Other Latin America Rest of Asia China Emerging markets CAGR 3.2%/a 200 100 Source: Pöyry Eastern Europe Japan Western Europe North America 0 1990 1995 2000 2005 2010 2015 2020 2025 Mature markets CAGR -0.6%/a 10
Future fibre supply mainly from urban forests Global demand for pulp and recovered fibre by type, 1980-2020 600 - Million tons - World Pulp Demand 1980-2020 500 400 Recovered paper 300 200 Non-wood Sulphite Unbleached kraft 100 Bleached hardwood kraft Bleached softwood kraft Mechanical & semi-chemical 0 1980 1985 1990 1995 2000 2005 2010 2015 2020 Note: Including integrated and market wood pulps. Source: Pöyry 11
China a strong driver and force for future use and trade in wood Import of wood and wood products to China 1992-2010e, RWE 180 160 140 120 Million m 3 in RWE Recovered paper Pulp Wood products Roundwood Future 2030: 2% CAGR = 253 million m 3 5% CAGR = 466 million m 3 7% CAGR = 692 million m 3 100 80 60 + 120 million m 3 RWE between 2000 and 2010 40 20 0 1992 1994 1996 1998 2000 2002 2004 2006 2008 E2010 Source: Comtrade 12
Industrial wood demand increase to 2030 is sizeable Product Area Pulp & Paper B Sawnwood C Wood-based panels TOTAL (gross) TOTAL (net) D RWE Increase 2010-2030 A 150 million m 3 sub 250 million m 3 sub 400 million m 3 sub 800 million m 3 sub 700 million m 3 sub A) Increase according to Pöyry scenario in KSLA presentation B) Virgin pulp based demand increase C) Softwood & hardwood sawnwood including demand recovery 2020 D) Including utilization of sawnwood residues in pulp and panels 13
Industrial wood mainly from natural forests and plantations Divison of world forests by region and forest type Nordic countries Western Europe Eastern Europe Russia USA Canada Latin America Japan China Rest of Asia Oceania Africa Primary forest Modified natural forest Seminatural forest Productive plantation Protective plantation Source: FAO 0 100 200 300 400 500 600 700 800 900 1000 Million ha 14
Can fuelwood be put to better use and industrialised? Global roundwood production by region 2009 (million m 3 ) 407 332 113 39 104 Russian Federation 43 North America Europe excl. Russia 602 124 270 309 93 192 China Rest of Asia 23 Industrial wood Fuelwood 199 283 India 72 South America Africa 50 11 Oceania Source: FAO 15
Growing challenges to future wood supply As global demand for wood-based products increases, pressure on natural forest resources is growing and industrial plantations are becoming ever more important for securing future wood supplies in a sustainable and ethical manner. Mountain pine beetle Harvesting restrictions Softwood plantations established, competition for land Fast-growing plantations established but increasing competition for land 16 Softwood plantations established, limited growth Significant potential Some potential Minor potential Restricted potential Large forest resource but practical supply restrictions Good biological and land potential, increasing commercial interest Largest deficit areas and high competition for land Fast-growing plantations established, further growth Fast-growing plantations established, restricted expansion
Fast growing plantations hold great production potential Current area of industrial fast growing plantations*, Some 30 million ha Productive forest land in Sweden, 22, 5 million ha Buenos Aires Montevideo Area of industrial fast growing plantations required to meet current global consumption of industrial roundwood, some 68 million ha (=3* Sweden PFL) Growth assumptions, MAI: - Softwood 20 m 3 /ha/a - Hardwood 30 m 3 /ha/a In Sweden (avg) < 5 m 3 /ha/a Source: Pöyry 17 * Plantations cover more than 156 million hectares. Some 120 million hectares are classified as productive plantations, while the balance consists of protective plantations (protection of soil, water). Industrial fast-growing plantations have been separated from other productive plantations based on the following criteria: Established totally or partly for production of wood for industry mainly as sawlogs, veneer logs or pulpwood Mean annual increment (MAI) exceeding 12 m 3 /ha/a
Significant improvements in plantation production and yield 70 s 80 s 90 s 00 s Yield unit 20 35 40 50 m 3 (wood)/ha/a 4.2 4.0 3.6 3.5 m 3 (wood)/ton(pulp) 5 9 11 14 ton(pulp)/ha/a Illustrative development of Brazilian forest plantations Pulpwood 7 years rotation 14 ton(pulp)/ha/a Short-rotation energy wood 2 years rotation 75 MWh/ha/a 70 s 80 s 90 s 00 s Source: Pöyry 18
Conclusion
Forest products demand growth impacts future land use Positive long term outlook for global forest products demand and continued growth in demand for roundwood /wood fibre. Growth in wood products demand mainly from Asia (China!) and developing world where land is or is becoming a scarce resource increasing pressure. Industrial fast growing plantations hold significant and growing supply potential strong development. Combined land utilization (e.g. agro-forestry) increasingly valuable to meet different and growing demands for land and (fuel) wood use. Forest products part of providing sustainable solutions for a complex world.
Thank you for your attention! Pöyry Sweden AB Jan Wintzell Banérgatan 16 115 23 Stockholm Sweden Tel: +46-8 450 4871 Mobil: +46-070 319 6661 jan.wintzell@poyry.com