Transcript Market Developments for Value Added Wood Products Jukka Tissari Market Development Officer - Wood Products.

Market Developments for
Value Added Wood Products
Jukka Tissari
Market Development Officer - Wood Products
Contents
• Global trade in Value Added Wood
Products (VAWPs)
• Competitive environment
• Conclusions
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Products covered (SITC)
• 248.3/5 Profiled wood
• 635.3 Builder’s joinery and carpentry
• Ex-821 Wooden furniture
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OECD Imports of three VAWPs
35,000
33,7 bill.
28,4 bill.
30,000
26,6 bill.
million $
25,000
20,000
15,000
10,000
5,000
-
1996
1998
2000
Profiled wood
2,198.82
2,255.67
2,606.31
BJC
4,653.35
4,990.25
5,617.91
19,708.06
21,507.06
25,481.02
Furniture
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OECD Imports of Wooden Furniture by Type
Furnit. of
other
material
like
bamboo
3%
Furniture
n.e.s.
69%
Seats of
cane,
osier,
bamboo
2%
Seats of
wood
26%
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OECD Imports of BJC by Type
Windows
and
frames
11%
Other
builders'
woodwork
59%
Doors
and
frames
25%
Shingles
and
shakes
5%
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OECD Imports of Wooden Furniture by Major Markets
30,000
25,000
million $
20,000
15,000
10,000
5,000
-
1996
1998
2000
CANADA
462.69
579.24
709.21
NETHERLANDS
1002.48
941.94
1004.52
BELGIUM-LUX.
1007.85
1029.45
991.52
JAPAN
1588.6
1145.23
1580.38
UK
1031.47
1407.56
1790.58
FRANCE
1807.19
1798.26
1901.73
GERMANY
3619.11
3357.25
2788.58
USA
4549.76
6325.68
9469.18
19708.06
21507.06
25481.02
OECD Total
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OECD Imports of BJC by Major Markets
6,000
5,000
million $
4,000
3,000
2,000
1,000
-
1996
1998
2000
SWITZ.-LIECHT.
217.81
189.27
172.42
ITALY
125.05
143.18
195.22
AUSTRIA
257.49
229.1
204.7
FRANCE
162.04
167.45
224.52
UK
278.67
344.32
412.46
JAPAN
573.17
310.62
529.92
1205.47
1123.65
819.91
695.13
1211.67
1653.82
4653.35
4990.25
5617.91
GERMANY
USA
OECD Total
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OECD Imports of Profiled Wood by Major Markets
3,000
2,500
million $
2,000
1,500
1,000
500
-
1996
1998
2000
Netherlands
82.47
61.24
77.9
Belgium-Lux.
89.56
91.95
118.59
Germany
168.66
177.54
126.22
Italy
143.29
156.5
151.27
UK
124.13
144.79
155.75
Canada
129.54
156.56
195.02
Japan
345.59
198.39
291.8
500
694.73
880.83
2198.82
2255.67
2606.31
USA
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OECD Total
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Imports of Wooden Furniture by Origin: USA & Japan
E.Eur./
Rus
1.4%
Latin
Am.
8.5%
Others
1.1%
Dev.d
Europe
18.4%
North
Am.
23.8%
E.Eur./
Rus
0.5%
Dev.d
Europe
14.7%
Asia
47.0%
Oceania
0.3%
Others
0.2%
North
Am.
4.7%
Asia
79.6%
USA
Japan
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Imports of Wooden Furniture by Origin: Germany & UK
Latin
Am.
1.5%
Others
2.4% Asia
9.2% North
Am.
0.4%
E.Eur./
Rus
8.7%
Latin Others
Am. 5.6%
3.6%
Asia
31.4%
E.Eur./
Rus
41.2%
Dev.d
Europe
45.4%
Germany
North
Am.
3.6%
Dev.d
Europe
47.1%
UK
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Imports of BJC by Origin: USA & Japan
E.Eur./
Rus
0.5%
Africa
Latin
0.6%
Am.
12.1%
Others
0.4%
Asia
12.2%
Dev.d
Europe
5.9%
USA
North
Am.
68.2%
E.Eur./
Rus
2.1%
Oceania
5.9%
Others
0.3%
Asia
30.3%
Dev.d
Europe
35.0%
North
Am.
26.4%
Japan
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Imports of BJC by Origin: Germany & UK
Latin
Am.
0.3%
Others
7.1%
Africa
Latin 8.2%
Am.
6.8%
Asia
12.9%
North
Am.
0.5%
E.Eur./
Rus
29.4%
Dev.d
Europe
49.8%
Germany
E.Eur./
Rus
6.3%
Others
0.1%
Asia
21.4%
North
Am.
7.1%
Dev.d
Europe
50.0%
UK
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Imports of Profiled Wood by Origin: USA & Japan
Oceania
5.4%
Others
0.2%
Asia
18.0%
Latin
Am.
43.0%
North
Am.
28.7%
E.Eur./
Rus
0.6%
USA
Dev.d
Europe
4.1%
Dev.d
Europe
10.5%
Latin
Am.
0.8%
Oceania
2.1%
Others
0.03%
North
Am.
16.3%
Asia
70.3%
Japan
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Imports of Profiled Wood by Origin: Germany & UK
Latin
Am.
0.6%
Others
3.1%
E.Eur./
Rus
22.7%
Asia
11.3% North
Am.
1.5%
E.Eur./
Rus
1.8%
Latin
Am.
2.1%
Others
1.5%
Asia
25.1%
Dev.d
Europe
53.5%
North
Am.
15.8%
Dev.d
Europe
60.9%
Germany
UK
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ITTO Consumer Imports of Tropical Wood Products
14
12
Bill
$
10
8
6
4
2
0
1991
1993
1995
Primary
1997
1999
2001
Secondary
Note: 2000-2001 is an estimate.
Source: UN COMTRADE, 2002.
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Major Tropical VAWP Exporters (1999)
Exporter
Wooden
furniture
and parts
Other
VAWP
BJC
Cane and
bamboo
furniture
and parts
$ million
Indonesia
637,652
542,726
243,561
269,021
Malaysia
1,026,330
188,323
77,692
19,368
Thailand
571,843
40,058
223,039
10,826
Brazil
315,858
171,345
96,036
909
Philippines
118,937
75,786
52,805
130,601
10,733
20,213
355
1
Bolivia
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Changes in ITTO Export Structure
1998
66%
1989
17%
Profiled
wood
23%
Asia-Pacific
Builders'
joinery
44%
Furniture
and parts
39%
11%
1989
1998
29%
44%
60%
48%
Profiled
wood
Builders'
joinery
Latin America-Caribbean
Furniture
and parts
11%
8%
1989
72%
64%
1998
13%
Profiled
wood
Africa
Builders'
joinery
Furniture
and parts
18%
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10%
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23%
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Competitive environment: drivers
1. Government policies to add value, taxes on
primary products, investment incentives
2. Technological developments in the processing
of plantation species and lesser-used species
3. Foreign direct investment
4. Wage and cost advantages
5. Falling tariffs under GATT/WTO agreements
6. Rapidly growing domestic/regional markets
7. Improved shipping services
8. Specific export & import promotion programs
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Competitive environment: challenges
1. Growing out-sourcing of semi-finished products
2. Tightening certification and labelling
requirements on furniture (e.g. the USA in the
next 2-3 years)
3. Substitution pressure from new materials
(natural fibres and synthetics)
4. Higher potential supply for more diversified
plantation wood products
5. Product standards and design
6. Consolidation of distribution
7. Mounting of non-tariff barriers on trade
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On competition
• 50+ US-furniture plants closed by mid-2001
• high-end producers with customisation and rapid
delivery will survive
• manufacturers transform into assembly, finishing
lines or distributors/marketers
• out-sourcing of semi-finished products and
components from China, Asia-Pacific, Latin
America
• still capture most of the value-adding potential in
design, distribution and marketing functions
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On competitiveness
• from comparative advantage to competitive
advantage
• In Europe: flexible but efficient production
with the highest technological quality, superior
design, innovative market promotion, and swift
distribution with minimal stock-keeping
• In the tropics: moving from original equipment
manufacturing (OEM) towards original design
manufacturing (ODM) and ultimately to
original brand manufacturing (OBM)
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Market access
• trade liberalization has reduced tariff
escalation (= higher tariffs for value added
products)
• EU, Japan and USA apply no import tariffs on
FPWP from GSP countries, for most other
countries 2-6%
• eliminate tariffs on wooden furniture
completely by 2005
• generally tropical producers retain higher
tariffs to protect their industries
• regional agreements reduce tariffs
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On End-use markets for VAWPs:
1. Consumer market (DIY products, household
furniture and BJC products)
2. Commercial and industrial enterprises
(building and construction materials,
intermediate and finished joinery products,
contract furniture)
3. Institutional buyers (building and
construction materials, office & public
premises furniture)
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On Certification
• In 1st and 2nd segment, the role of intermediaries
(sourcing agents, brokers, importers, wholesalers,
retailers, etc.) is essential
• complex consumer market involves large
corporations, who manage supply chains (IKEA,
Home Depot, B&Q) and a lot of medium and
small-scale operators
• on institutional side, many governments in Europe
are developing their procurement policies (WTO
rules breach?): largest volumes, less certified yet
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Conclusions 1
• International trade of VAWPs has liberalized,
increasing export opportunities for DMECs.
• Around 40% of all OECD imports originate from
developing market economies and China.
• Competition will force industrialized countries to
transform their manufacturing industries and
participate in the supply chains from costcompetitive regions like Asia-Pacific and Latin
America.
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Conclusions 2
•
•
•
The contribution of VAWP to the forest sectors of
tropical countries will continue to grow.
Tropical value-added processing (furniture in
particular) tends to develop in phases: >>>
standardized products >>> originally designed
products >>> branded products.
Tightening tropical wood resources call for:
1. Processing of more plantation woods
2. Expanded (unconventional) trade flows of primary
processed products
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