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China’s plywood industry takes stock
Published:  13 August, 2008

China – the largest plywood manufacturer and exporter in the world – is, like other wood product industries in China and elsewhere, experiencing difficult global markets. At the recent 2008 China Plywood International Trade Fair, held in Pizhou City, Jiangsu province, Chinese manufacturers were very concerned about future development.An issue identified by the Pizhou plywood industry at the fair is that the US and Europe are no longer the largest markets for plywood exports from Pizhou plywood manufacturers. More and more importers from Middle Eastern countries have become interested in purchasing plywood from China.

Prices offered by Middle East markets are quite low and most of the Chinese plywood manufacturers cannot make these lower prices cost-effective. A further issue is that local governments are paying more attention to product quality improvement and would like to attract more investment in value-added product production in the Pizhou area.

The development of the plywood industry in Pizhou started in the early 1990s and resulted in over 3,000 companies being established to service and manufacture plywood. Today, 30% of plywood manufacturers in Pizhou have ceased production and it is estimated that 50% of the factories will be closed by the end of 2008.

At present, the average profit level is at zero or in a loss position at small-sized factories, 1-3% profit margin at middle-sized factories and 5% at larger ones. Meanwhile, some factories which used to focus on the export business are also shifting panel production to supply the domestic furniture industry.

Source: China Bulletin

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