UN/ECE TIMBER COMMITTEE Geneva, Oct. 2003 VALUE-ADDED WOOD PRODUCTS TRADE P-M. DESCLOS Forest Products Consultants
Introduction This short presentation will cover the international trade of furniture, joinery, carpentry, profiled wood and flooring with a special chapter on laminate flooring and engineered wood products in reference to the North-American and Japanese markets Even if their share of the total international timber trade grew, the overall trade of value-added wood products started slowing in 2001 after several years of steady growth. Forest Products Consultants 2
Drivers and Strategy The international trade of value-added wood products is the result of an ever and fast changing combination of many factors, the main ones being: international labour division, reliability and access to the forest resource, investment (national or foreign direct investment) exchange rates and freight costs The changing markets of emerging countries have brought a change in the scope of foreign investment in added-value manufacturing. Earlier approach: to establish new lines of supply Recent strategic re-orientation : to cover also the local demand of emerging markets e.g. eastern European countries Forest Products Consultants 3
Drivers and Strategy International out-sourcing 1.2 means flexibility 1.1 and quick adjustment to 1 any change of equilibrium. 0.9 1 US$ = The international trade of 0.8 11 2002 3 5 7 9 11 2003 3 5 7 9 added-value products reacts much faster than primary products trade to the variations of exchange rates. 0.0095 0.009 0.0085 0.008 0.0075 1 YEN = 0.007 Forest Products Consultants 4 11 2002 3 5 7 9 11 2003 3 5 7 9 11
Furniture: International trade flows International furniture trade: More than half of the global international furniture exchange is traded between exporters and importers of the same region *: Western Europe: 66% NAFTA area: 60% Asia / Pacific regions: 50% *Source: EPF / CISL Main transcontinental / transregional furniture trade flows : from Asia to the USA and Europe from Europe to the USA, mostly from Italy from Eastern Europe to Western Europe, mostly to Germany Forest Products Consultants 5
Furniture: International trade In 2001 the global import of furniture went down by 2.8%. In the EU-15, the furniture production was down by 14%. The balance of furniture trade went negative and a correction of this trend is unlikely. The rapid growth of the Asian furniture industries has a direct impact in the USA and in Europe, mainly in the lower-cost range. China is now the second world exporter of furniture. Its capacity is expanding and the current trend will last, both in parts and finished furniture. The foreign trade is very positive for Eastern and Central European countries. e.g. in the last 5 years, the German imports of furniture from Eastern countries more then doubled, and currently Germany imports more furniture from Poland than from Italy. Forest Products Consultants 6
Furniture World imports of wooden furniture by product group 35 30 25 20 15 10 5 Billion $ 0 1997 1998 1999 2000 2001 Furniture parts, all materials Other furniture Kitchen furniture Seats Furniture, other materials Bedroom furniture Office furniture Source: UN COMTRADE, 2003 Forest Products Consultants 7
Furniture Major importers of wooden furniture and parts, 2001 Others 36% USA 33% Japan 6% UK 7% France 8% Germany 10% Source: UN COMTRADE, 2003 Forest Products Consultants 8
Joinery, carpentry and profiled wood In value, the global imports of joinery, carpentry and profiled wood, went down 2.4% in 2001. Profiled wood imports declined by 5.3% Latin America exporters gained a 50% share of the US imports of profiled wood. Forest Products Consultants 9
Joinery, carpentry and profiled wood Main downturn in Germany (construction crisis) and in Japan. World imports by product group 10 8 Billion $ 6 4 2 0 1997 1998 1999 2000 2001 Windows Doors Shingles & shakes Other BJC Profiled softwood Profiled hardwood Source: UN COMTRADE, 2003 Forest Products Consultants 10
Joinery and carpentry Major importers of builders' joinery and carpentry USA 29% Others 40% Japan 8% UK 7% France 4% Germany 12% Source: UN COMTRADE, 2003 Forest Products Consultants 11
Profiled wood In 2001, profiled wood imports declined by 5.3% Only Italy and France increased their imports Major Importers of Profiled Wood, 2001 USA 31% Others 47% Japan 10% Forest Products Consultants 12 UK 5% Germany 4% France 3% Source: UN COMTRADE, 2003
Engineered Wood Products in North America Spectacular and continuous growth of EWP in North America Now covering 5% of structural lumber demand 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 EWP in North America: Consumption and Projection Million BF equivalent 1992 1994 1996 1998 2000 2002 2004 2006 LVL (excluding I-Joists) I-Joists Glulam Source: APA, Regional Production and Market Outlook, APA Economics Report E169, 2003. Forest Products Consultants 13
Engineered Wood Products: LVL Global LVL Capacity, 2002 1.8 million m3 USA 59% Australia and New Zealand 10% Asia 20% Europe 6% Canada 5% Source: BIS Shrapnel Forestry Group, NZ, 2003 Forest Products Consultants 14
Japan: Gluelam imports Japan is by far the single largest consumer of gluelam (1.5 million m3 structural gluelam) Imports: 35 % of consumption 700 600 500 400 1000 m3 Structural Non Structural Japan: Gluelam Imports 300 200 100 0 1998 1999 2000 2001 2002 Source: Japan Lumber Reports Forest Products Consultants 15
Laminate flooring: the fastest growing product Solid wood flooring accounts for about 5% of the European market The share of laminate flooring is growing sharply. The global consumption of laminate flooring increased from 187 million m2 in 1998 to 479 million m2 in 2002. Europe main producer, with declining share (78 % of total production). 700 600 500 400 300 200 100 0 1995 Global production of laminate flooring million m2 Source: M. Krull, Smurfit Munksjo Paper 1996 1997 1998 1999 2000 2001 2002 2003* 2004* 2005* Europe North America Other Asia China Projection Forest Products Consultants 16
Laminate Flooring 70 60 50 40 30 20 Consumption of laminate flooring. Top 10 countries 2000 million m2 2001 2003 Source : M. Krull, Smurfit Munksjo Paper 10 0 USA China Germany UK France Canada Poland Netherlands Iberia Belgium Europe is the largest regional market for laminate flooring By country: Germany 29%, UK 23%, France 15%, Netherlands 8% China is the second largest consumer, 85% supplied by domestic production. Forest Products Consultants 17
Laminate Flooring Production, consumption and trade Part of the European production is exported (mostly to North America and China) North America is heavily dependant on European imports. Consumption of laminate flooring in North America rose from 30 million m2 in 1998 to 96 million m2 in 2002. Forthcoming production capacity extensions in North America, will limit imports from Europe. Constant increase of Chinese production and consumption and stagnation of imports from Europe. million m2 Production Export Import million m2 Consumption and Import of Lamin. Floor Forest Products Consultants 18 450 400 350 300 250 200 150 100 50 0 120 100 80 60 40 20 0 100 80 60 40 20 0 million m2 Consumption and Export of Lamin. Floor Europe Source: M. Krull, Smurfitt Munskjo 1995 1996 1997 1998 1999 2000 2001 2002 Europe sales Europe export million m2 Source: M. Krull, Smurfitt Munskjo Consumption and Import of Lamin. Floor North America Source: M. Krull, Smurfitt Munskjo 1995 1996 1997 1998 1999 2000 2001 2002 N A produc tion N A import Asia 1995 1996 1997 1998 1999 2000 2001 2002 Asia production Asia import import
Tropical Value-Added Wood Products The trade of tropical value-added products has increased considerably in the last years. After many years of efforts, lesser known species (LKS) are gaining acceptance in the manufacture and trade of tropical value-added products. Plantation products account for a large share of tropical valueadded products The international market of garden furniture, decking and gluelam scantlings is very active Certification is a strategic issue, conditioning investments and exports Forest Products Consultants 19
Special thanks to: Mr. Jukka Tissari, Wood Products, ITC Mr. Craig Adair, APA Dr. Al Schuler, USDA Dr. M. Krull, Smurfitt Munskjo for data reported in this presentation Forest Products Consultants 20