Malaysia
Aiming for top 30 in 10 years
The recently launched ‘Madani Economy Framework’ sets out six medium-term benchmarks that will lift the Malaysian economy to be among the world’s top 30 in less than 10 years from 37th in 2022.
This will be achieved by focusing on greater regionalisation and competitiveness, prioritising economic complexity and moving up the value chain.
The main focus is on economic restructuring towards making Malaysia an economic leader in Asia.
This will involve Malaysia being in the top 12 in the Global Competitiveness Index, employees’ compensation to reach four percent of the gross domestic product, women’s participation in the workforce at 60 percent, top 25 in the United Nations Human Development Index, top 25 best score in the Corruption Perception Index and fiscal sustainability with the fiscal deficit being three percent or less.
Raw material and labour shortages in plywood sector
A Sabah based manufacturer Eksons Corp has exited its loss-making core plywood manufacturing operations.
The plywood operations were stopped in January this year due to the constant challenge in the availability of logs and workers.
Prolonged log and foreign labour shortages have forced many timber companies in both Sarawak and Sabah to either shut down their plywood plants or scale down production.
Amended Forestry Act to protect tigers
The forestry laws in Perak should be amended in accordance with the National Forestry Act to protect the Malayan tiger, says Natural Resources, Environment and Climate Change Minister, Nik Nazmi Nik Ahmad.
He said this at the World Tiger Day celebration at Belum Rainforest Resort adding that the Federal Government will continue to work with the Perak State government to amend its laws in accordance with the National Forestry Act.
New General Manager for STIDC
Zainal Abidin Abdullah, 54, has taken over as Sarawak Timber Industry Development Corporation General Manager.
He is also the Malaysian Timber Council chairman.
Zainal, who has over 30 years of experience in the forestry and timber sectors, brings extensive knowledge in strategic planning for the development of the sectors in consonance with national policies.
He started his career as a forest officer for the Sarawak Forest Department in 1992 and was seconded to Sarawak Forestry Corporation. He held several positions at SFC before becoming deputy general manager in June 2018.
Indonesia
Indonesia, Malaysia, EU task force on deforestation regulation meets for first time
The first meeting of the Indonesia/Malaysia/EU Ad Hoc Joint Task Force (JTF) on the European Union Deforestation-Free Regulation (EUDR) was convened in early August and was co-chaired by Deputy Minister for Food and Agribusiness at the Coordinating Ministry for Economic Affairs of Indonesia, Musdhalifah Machmud; Secretary General, Ministry of Plantation and Commodities of Malaysia, Dato’ Mad Zaidi bin Mohd Karli; and Director for Green Diplomacy and Multilateralism and for the European Commission, Astrid Schomaker.
The co-chairs underscored their aim is to seek common interests between producers and consumers of plantation. The Ad Hoc JTF will establish a dialogue and relevant work streams led by the respective governments to build mutual understanding on the implementation of the regulation.
The meeting also agreed to the terms of reference for the Ad Hoc JTF which includes work on issues such as inclusivity of smallholders in the supply chain, relevant national certification schemes (land legality and cut-off date for deforestation), traceability from producer to end-consumer, scientific data on deforestation and forest degradation and protection of data.
The Ad Hoc JTF will conclude its work by the end of 2024, its term could be extended upon mutual agreement.
Minister—Concerns on EUDR country risk categorisation
Indonesia's Trade Minister, Zulkifli Hasan, has said the EUDR will hamper trade and has the potential to be discriminatory.
Indonesia has always been the EU's source palm oil, wood, rubber and cattle. In 2022 Indonesia's export to the EU amounted to almost US$7,000,000 from around eight million small farmers.
Concerning the discrimination potential the minister said that the EUDR provides for countries to be categorised based on risks.
Indonesia has conducted efforts to oppose the EUDR mainly through multilateral forums in WTO Committees such as the Committee on Agriculture, Council for Trade in Goods, Committee on Market Access and Committee on Trade on Environment.
Small-holder union to help farmers comply with EU deforestation law
Indonesia’s smallholder union (SKPS) has established a foundation to help farmers comply with the EUDR. The aim is to support forest conservation and responsible deforestation-free practices that improve the welfare of smallholder farmers and rural communities.
Mansuetus Alsy Hanu, Secretary-General of SKPS said that the launch of the foundation was timely as oil palm smallholders need support to cultivate their crops while protecting forests. Smallholders have expressed concern that they will be unable to meet the requirements of the newly introduced EUDR which requires farmers to provide evidence that their crop was not grown on recently deforested land.
The foundation will provide both monetary and non-monetary support to farmers including how to follow deforestation-free and sustainable best practices. These include establishing traceability of products, recognition of customary forests and the processing and marketing of non-timber forest products.
Minister of Trade meets the EU-ABC delegation
The Minister of Trade, Zulkifli Hasan, received a visit from a Delegation of the European Union-ASEAN Business Council (EU-ABC). At the meeting the Minister encouraged collaboration between governments and business players from Indonesia and the European Union to enhance trade and investment relations, as well as optimise bilateral economic potential.
The Minister also held discussions with the delegation regarding trade policies such as exports and imports, electronic commerce (e-commerce) and international trade.
In addition, the development of the ongoing Indonesia-EU CEPA (European Union Comprehensive Economic Partnership Agreement) negotiations was also discussed.
Indonesia and UK strengthen collaboration
The Indonesian Coordinating Minister for Economic Affairs, Airlangga Hartarto recently met with British Minister for Energy and Net Zero Security, Graham Stuart, to bolster collaboration between producer countries and consumers of plantation commodities through the Forest Agriculture, Commodities and Trade (FACT) Dialogue.
The meeting addressed issues related to trade in agricultural commodities between Indonesia and the UK, small farmers and certification, trade commitments in the agricultural sector and climate change issues.
Hartarto said it is important for the UK to understand and fully acknowledge national sustainability standards to create conditions for improved market access for sustainably produced products in the UK.
He also emphasised Indonesia's various commitments in trading agricultural commodities and addressing climate change, including the country's efforts towards sustainable plantation.
The cooperation between the two countries in legally and sustainably managing timber and wood products is demonstrated by the Forest Law Enforcement, Governance and Trade—Voluntary Partnership Agreement (FLEGT - VPA) which has been in effect since December 2018.
Agreement on carbon trading
The Financial Services Authority (OJK) and the Ministry of Environment and Forestry (KLHK) agreed to expand cooperation regarding carbon trading as mandated by the Financial Sector Development and Strengthening Law (P2SK Law).
This increase in cooperation was marked by the signing of a memorandum of understanding (MoU) by the Chairman of the OJK Board of Commissioners, Mahendra Siregar and KLHK Minister Siti Nurbaya Bakar.
"This provides the legal basis for the exchange and use of carbon trading data through the National Registry System for Climate Change”.
Siregar noted this is an important step and will lead to other collaborations in the field of human resources (HR), information exchange, promotion, outreach and roadshows throughout the country and overseas to inform the public and the market of the existence of Indonesia’s carbon stock exchange.
Indonesia's environmental management applauded
Indonesia has received appreciation from a number of countries regarding environmental and forestry management.
This appreciation came on the sidelines of the G-20 Meeting in Chennai, India. The first appreciation came from Canada's Minister of Environment and Climate Change, Steven Guilbeault.
In a written statement the Canadian Minister congratulated Indonesia for starting to implement Carbon Economic Values. Furthermore, Guilbeault offered cooperation in the exchange of information and knowledge in the application of carbon emission trading and carbon economic values.
Indonesia also received appreciation from the United Nations Environment Programme (UNEP). This appreciation was provided at a bilateral meeting between Minister Siti and the UNEP Executive Director, Inger Andersen.
Andersen said UNEP especially appreciates Indonesia's leadership in dealing with environmental issues related to deforestation, lake management, reducing mercury through the Minamata Convention and handling plastic waste.
Sanctions on exporters violating foreign exchange regulations
The government will impose sanctions on exporters who fail to comply with the regulations concerning foreign exchange from export earning from natural resources.
Provisions on the imposition and revocation of administrative sanctions for violating the regulation concerning natural resources have been outlined in the Finance Ministry's Regulation No.73 of 2023.
If Bank Indonesia finds exporters are violating the export earnings regulation then it will send notices to the Directorate General of Customs which will impose administrative sanctions on the exporters. The sanctions will take the form of export services suspension.
First half exports signal slight recovery
Exports of forest and wood products reached US$6.7 billion in the first half of 2023, however, this was below the level of the US$7.03 billion earned in the first half of 2022. Despite the year on year decline the performance, when set against the current international demand, suggests the sectors are recovering from the impact of the pandemic.
Based on data from the Ministry of Environment and Forestry (KLHK) processed by the Indonesian Forestry Community Communication Forum (FKMPI), Indonesia's exports of wood products in the first half of 2023 are still dominated by paper, pulp and plywood.
Paper products recorded an export value of US$2.24 billion, pulp US$1.86 billion and wood panels US$1.23 billion.
Plywood is still one of the top three contributors to timber exports but in terms of value it has experienced a sharp decline. The value of plywood exports in the first half of 2023 decreased by 26 percent year-on-year.
Exports of other wood products in the first half of 2023, which also experienced a sharp decline, were furniture with an export value of US$748.8 million, a decrease of 32 percent year-on-year and builders’ woodworking exports with an export value of US$428.9 million, a decrease of 19 percent year-on-year.
The decline in the export earnings can be explained by the sluggishness in the North American and the EU markets.
The export value of wood products to North America in the first half of 2023 was valued at US$925.9 million, down 36 percent year-on-year. Exports to the EU were recorded at US$572.4 million, down 13 percent year-on-year.
Meanwhile, the Asian market is still showing growth due to demand from China. Exports of Indonesian wood products in the first half of 2023 to the Asian region reached US$4.6 billion, up six percent year-on-year.
Furniture exports weaker in second quarter
The domestic furniture industry is still under pressure as export demand is weak with the value of orders in the first half being only half of that compared to the same period in 2022.
Abdul Sobur, the Chairperson of the Indonesia Furniture Industry and Craft Association (HIMKI), said that the export performance of the furniture industry has not yet shown normal growth.
Based on HIMKI records, Abdul said the average value of requests from international buyers is only around 30-50 percent of pre-pandemic levels however he forecasts a six to eight year-on-year rise in the value of furniture exports to be reported for the quarter of 2023.
Exports to Japan become easier
The Ministry of Trade released a new regulation that makes it easier to exports to Japan, the Electronic Certificate of Origin (CoO).
The Ministery of Trade Regulation was issued based on recommendations from IJEPA, the Indonesian-Japan Economic Partnership Agreement.
The Ministry of Trade Regulation was issued as a joint commitment between Indonesia and Japan for the implementation of the IJEPA Electronic CoO.m.
Indonesia is optimistic that the good relations between the two countries can be improved, especially with the IJEPA bilateral agreement to strengthen mutual economic relations amid the current global economic situation according to Zulkifli Hasan, the Minister of Trade.
The Director of Export and Import Facilitation, Bambang Jaka Setiawan, said Indonesian business players who export to Japan must understand the rules of origin when preparing a CoO.
According to Bambang, the implementation of the trade agreement will enable Indonesia to benefit from preferential tariffs and reduce transaction costs.
Can the IEU-CEPA negotiations be completed?
The Indonesian President recently discussed the Indonesia-European Union Comprehensive Economic Partnership Agreement or IEU-CEPA and reflected on the risk that negotiations will continue.
From the Indonesian perspective there are five strategic issues that need to be resolved as soon as possible in order for the negotiations to be completed by the end of 2023.
The Coordinating Minister for the Economy, Airlangga Hartarto, said these are related to:
• Transparency in government spending or purchases
• Special assignments for state-owned enterprises
• Export duties
• Indonesia's demand for greater market access
• the settlement of investment disputes
Wood chip factory for Bangka
A wood chip plant is being built in Bangka Belitung Islands Province.
The plant aims to meet the needs for coal-mixed biomass or co-firing steam power plants in the province.
In addition to the wood chip plant there are plans for production of wood pellets. It is planned that the wood pellets be exported to a number of countries such as Japan, South Korea and China.
India
Confidence returns, consumers are spending
Consumer confidence in India has surpassed pre-Covid levels as renewed spending on travel and high-value purchases drives corporate earnings to new heights.
The Reserve Bank of India's bi-monthly survey revealed that the consumer confidence index reached 88.5 in May, exceeding the high reading in March 2020 of 85.6.
Plywood output back to pre-Covid levels
The output of plywood mills in Perumbavoor, Kerala State especially Aluva, Kalady and Muvattupuzha have returned to near normal after the serious downturn triggered by demonetisation and the two years of Covid restrictions and depressed demand.
Manufacturers say they are now facing a shortage of wood raw material which is partly due to the rain season. So far this year, India’s erratic weather patterns have made headlines with non-seasonal rainfall in March-April followed by intense heat waves in May.
The industry urged the government to encourage planting of softwood to enable the sector to have sufficient raw materials.
The plywood sector is important in terms of employment and contributions to the state’s economy. Sources said the plywood industry in Perumbavoor directly employs around 50,000 people most of who are from other states.
Vietnam
Wood and wood product (W&WP) trade highlights
In July 2023 Vietnam’s W&WP exports are estimated at US$1.1 billion, up 0.9 percent compared to June 2023 and down 16 percent compared to July 2022.
In particular, WP exports accounted for US$760 million, up 1.3 percent compared to June 2023, but 10 percent compared to July 2022. Over the first seven months of 2023 W&WP exports were recorded at US7.2 billion, down 27 percent over the same period in 2022.
The WP exports contributed US$4.9 billion, down 30 percent year-on-year.
Pine imports in June 2023 reached 69,000 cubic metres, worth US$15.4 million, up 1.5 percent in volume and 11 percent in value compared to May 2023.
Compared to June 2022 pine imports decreased by 35 percent in volume and 49 percent in value. In the first six months of 2023, pine imports amounted to 279,400 cubic metres, worth US$61.1 million, down 44 percent in volume and 57 percent in value over the same period in 2022.
Vietnam's exports of rattan, bamboo and other non-wood forest products (NTFPs) in June 2023 recorded the highest level over the past one year, reaching US$68,135 million, up 10 percent compared to May 2023 and up 9.5 percent compared to June 2022.
After nine consecutive months of decline this is the first month that the NTFP exports increased year-on-year. Over the first six months of 2023 Vietnam's NTFP exports totalled US358 million, down 25 percent over the same period in 2022.
Export orders tilt higher as buying for year-end begins
The volatility and unpredictability in global markets challenged for many industries including woodworking but offered opportunities to diversify according to experts.
The Department of Forestry reported that forestry product exports amounted to an estimated US$6.42 billion in the first six months of the year, a 29 percent year-on-year decrease with wood and wood product exports dropping by 29 percent to US$5.96 billion.
A preliminary survey by the Handicraft and Wood Industry Association of Ho Chi Minh (HCM) City (HAWA) found that export orders fell by around 30 percent at the start of the year but began to recover in July ahead of the global market year-end furniture shopping season.
Speaking at the Vietnam Wood and Furniture Industry Forum held by HAWA in HCM City, Phạm Phú Ngọc Trai, chairman of Global Integration Business Consultants, said the current reduction in export orders is temporary and the furniture industry has considerable growth potential for the next five to ten years.
Compared to global GDP that forecast growth of three percent this year the world furniture industry's compounded growth rate is expected to be 4.5 percent.
According to Statista Market Insights the world furniture market may reach US$766 billion in 2023 and is estimated to hit approximately US$932 billion by 2027.
Vietnam ranks among the world's five largest wooden furniture exporters underlining its solid internal resources.
Nguyễn Quốc Khanh, Chairman of HAWA shared a similar view stating that woodworking firms showcased their business integration initiative. During market downturns, businesses remained proactive by reorganising production and streamlining operations to reduce costs while also seeking support from trade promotion agencies to explore new markets.
Khanh pointed out a new trend in the woodworking industry, where significant furniture brands from Vietnam are expanding into promising export markets, notably super-rich countries in the Middle East such as Saudi Arabia and Dubai with an eye on supplying products to new up-market real estate projects.
With the industry's internal strength and the return of orders the industry's export target for 2023 is considered attainable, said Khanh.
Experts at the forum emphasised the importance of businesses strengthening their internal resources to be prepared for orders to rebound in a recovering market and embrace green transformation to improve competitiveness.
Trai said Vietnamese businesses will face new demands such as the EU's Carbon Border Adjustment Mechanism (CBAM), effective from October 2023. Goods imported into the European market may incur additional costs if they fail to adopt a lower-emission production model and earn carbon credits.
Planted forests
Vietnam has significant reserves of planted forests which offer opportunities for domestic furniture enterprises to capitalise on the carbon credit market, said Trai.
Phạm Thị Ngọc Thủy, Director of the Private Economic Development Research Board, pointed out that challenges related to the European Union Timber Regulation (EUTR) and net-zero goal will push Vietnam's wood and forest product processing industry in a more positive direction, encouraging further outreach and attracting foreign investment.
Wood industry will struggle to achieve export target
The Import and Export Department (Ministry of Industry and Trade) quoted statistics from the General Department of Customs saying that in June 2023 the export of wood and wood products reached US$1.1 billion up four percent month-on-month but down 23 percent compared to June 2022.
In the first six months of 2023 exports of wood and wood products reached US$6.1 billion, down 28 percent over the same period in 2022. In which, the export of wood products reached US$4.1 billion, down 32 percent over the same period in 2022.
The recent global economic recession lead to a plummeting of orders. As a result, Vietnam's exports of wood and wood products to major markets in the first half of 2023 dropped sharply.
Exports to the US accounted for 54 percent of the total export value of wood and wood products, reaching US$3.3 billion, down 33 percent compared to the same period in 2022.
The sharp decline of orders from the US makes the target of US$18 billion sales in 2023 unachievable.
According to the Import-Export Department recovery of the timber industries will depend on many factors including the stability of the global economy, especially the key export markets for wood and wood products such as the US and EU and with promoting export support measures and exploiting market expansion opportunities.
The decline in exports of wood and wood products resulted from a steep drop in demand in some main markets such as the US due to a drop in consumer purchasing power.
In addition, the wood industry has faced anti-dumping and anti-subsidy investigations since 2020 but, up to now, after seven reviews the US Department of Commerce has not yet issued a final decision.
Vietnam has signed many FTAs such as VPA/FLEGT Agreement, also known as the Voluntary Partnership Agreement between the European Union and Vietnam on forest law enforcement, forest governance and trade in forest products.
Also, Vietnam entered into a bilateral agreement with the United States to address the complete removal of illegally harvested timber from the supply chain. At the same time, it is effectively implementing the EU regulations.
The Vietnamese Government, businesses and the people of Vietnam have shaken hands to promote green growth and green development, contribute to the formation of a responsible wood industry and contribute to a reduction of global deforestation.
Japan
Major retailer to build stores with domestic wood
Muji, the Japanese retailer which sells a wide variety of household and consumer goods and which places emphasis on recycling, reducing production and packaging waste, plans to construct 20 stores made of domestic timber.
The idea to utilise domestic timber is part of the company’s sustainable business model. The company has concluded an agreement with the Ministry Agriculture, Forestry and Fisheries which is promoting the use of domestic timber.
Changing demographics to impact timber consumption
There was a drop in the number of citizens in Japan in 2022 with all 47 prefectures seeing declines for the first time. However, the number of non-Japanese residents surged to a record high balancing out some of the population loss.
Data from the Ministry of Internal Affairs revealed that the population of Japanese nationals stood at around 122.42 million as of 1 January 2022 a decrease of over 800,000 year-on-year and the 14th year-on-year decline.
This change in demographics will impact demand for new homes and consumption patterns as many of the foreign workers are short-term workers and many are in low paying jobs.
China
Making property buying easier
Home sales in China continue to fall despite efforts by the government to reverse this trend. The Ministry of Housing and Urban-Rural Development has announced plans to make it easier for people to buy property, a shift away from its crackdown on real estate speculation.
The measures proposed include easing restrictions on second home purchases and reducing down payments for first-time homebuyers. But home prices continue to drop and with prohibitively high interest rates the sector is facing serious challenges.
Two years after Evergrande's default triggered chaos in global markets another developer, Country Garden, appears on the brink of a crisis.
Country Garden, which has developments in almost every province in China, is the latest developer to be struggling against high interest rates falling home prices and government the restrictions that are now under review.
It has been reported that Country Garden, the country's biggest private-sector developer by sales, missed interest payments on two US-dollar-denominated bonds.
A Bloomberg analyst, wrote: "any default would impact China's housing market more than Evergrande's collapse as Country Garden has four times as many projects."
Another decline in log imports
According to China Customs, log imports totalled 20.31 million cubic metres valued at US$3.566 billion in the first half of 2023, down nine percent in volume and 22 percent in value over the same period of 2022. The average price for imported logs was US$176 (CIF) per cubic metre, down 10 percent from the same period of 2022.
Of total log imports, softwood log imports fell two percent to 14.87 million cubic metres, accounting for 73 percent of the national total, up five percent from the same period of 2022. The average price for imported softwood logs declined 10 percent to US$145 (CIF) per cubic metre over the same period of 2022.
Sharp decline in log imports from Russia
China's log imports from Russia fell by 32 percent to 960,000 cubic metres in the first half of 2023.
There are two main reasons for the decline. Firstly, over the past two years the timber trade between China and Russia has been greatly impacted by the coronavirus pandemic and the Russia-Ukraine war.
Secondly, Russia increased the export tax rate on logs which has put a lot of pressure on Chinese enterprises resulting in a sharp decline in log imports from Russia.
Also, China’s log imports from Germany and PNG dropped 27 percent and seven percent respectively in the first half of this year compared to the same period in 2022.
The decline in log supplies from the three major suppliers, Germany, PNG and directly resulted in the decrease in the total national imports in the first half of 2023.
However, China’s log imports from Poland surged over 300 percent to 670,000 cubic metres in the first half of 2023.
The forests of Poland were affected by severe storms in 2017. Nearly 10 million cubic metres of logs were windblown and much of this has been harvested and exported to China.
China’s log imports from Poland have been increasing since 2017. China’s log imports from Poland in 2018 surged over 700 percent.
Decline in hardwood log imports in the first half of 2023
Hardwood log imports dropped 25 percent to 5.43 million cubic metres in the first half of 2023 and accounted for 27 percent of total log imports. The average price for imported hardwood logs fell 8 percent to US$260 (CIF) per cubic metre over the same period of 2022.
Of total hardwood log imports, tropical log imports were 2.95 million cubic metres valued at US$761 million CIF, down 28 percent in volume and 35 percent in value from the same period of 2022 and accounted for 15 percent of total first half 2023 log imports, down two percent over the same period of 2022.
The average price for imported tropical logs was US$258 CIF per cubic metre, down nine percent from the same period of 2022.
Before its log export ban, Myanmar was a major source of tropical logs for China. However, China’s log imports from Myanmar have been decreasing for many years.
China’s log imports from Myanmar fell 38 percent to 2,267 cubic metres in volume and 44 percent in value to US$2.47 million in the first half of 2023. The average price for imported logs from Myanmar declined nine percent to US$1,090 (CIF) per cubic metre in the first half of 2023.
Imports from Australia resume
Few logs were imported from Australia in the first half of 2023 but China resumed importing Australian timber from 18 May 2023.
China imported just 6,091cubic metres of sawnwood from Australia in the first half of 2023 valued at US$3.99 million, up 39 percent in volume and 42 percent in value over the same period of 2023.
China’s log imports from Australia virtually stopped because of a ban by the quarantine service which said it detected pests.
Since the beginning of 2020, the quarantine service has repeatedly detected live pests such as the long horn beetle, Cerambycidae and jewel beetles, Buprestidae in logs imported from Australia.
Decline in tropical log imports
China’s tropical log imports fell 28 percent to 2.95 million cubic metres in the first half of 2023. China imported tropical logs mainly from Papua New Guinea (42%), Solomon Islands (26%), the Republic of Congo (9%) and Cameroon (7%).
Just four countries supplied 84 percent of China’s tropical log requirements in the first half of 2023.
The reduction in tropical log imports from the largest supplier, PNG, resulted in the overall decline in tropical log imports in the first half of 2023.
China’s tropical log imports from the fourth largest suppliers, Cameroon, fell seven percent to 211,000 cubic metres. China’s tropical log imports from Honduras surged in the first half of 2023. However, China’s tropical log imports from the DRC, Mozambique and Equatorial Guinea declined 50 percent, 68 percent and 84 percent respectively.
Improving quality of supplies
To improve the green supply chain the government will support home furnishing manufacturing enterprises to implement green manufacturing, encourage conditional areas to introduce targeted policies and measures for green manufacturing demonstration enterprises and promote enterprises to increase research and development efforts of green home products. The quality and brand building for green household products will be strengthened.
The unified green product standards, certification and identification system will be improved and the scope of green household product certification will be expanded.
The government will encourage and support residents in purchasing green household appliances, green furniture and green building materials etc. The government will support home furnishing stores to develop green shopping malls, set up green product sales zones and vigorously develop green home decoration sales.
To foster smart consumption through innovation the government will support enterprises to use the ‘internet of things’, cloud computing and artificial intelligence to accelerate research and development for smart home appliances, smart security, smart lighting, smart sleep, smart health and smart audio and video entertainment.
This effort will play a role in big data for consumer platforms to support enterprises to carry out customisation, personalised design and flexible production of household products.
The inter-connection of smart home devices will be promoted, a sound standard system will be established and the integration of single product intelligence with whole house intelligence will be promoted.
The government will build and conduct trials on digital homes.
The level of elderly-oriented household products will be improved. The promotion of elderly-oriented products will be formulated and published and the development of design standards for elderly-oriented household products will be accelerated.
The government will support enterprises to increase research and development of elderly-oriented household products such as household appliances, furniture and bath devices etc.
The government will support the following installation of video care systems and household health monitoring equipment such as blood oxygen meters, blood pressure metres, blood glucose meters along with home stores and e-commerce platforms to appropriate for senior product sales area counters and will expand elderly-oriented home renovation.
Innovative development of home furnishing enterprises
Chinese government will promote innovative development of home furnishing enterprises which will be supported to accelerate the development of digital, intelligent transformation and upgrading and online-offline integration to create a number of home furnishing industry leaders so the industrial and supply chain can develop.
Enterprises will be encouraged to build online home service platforms and promote the healthy and orderly development of new commercial models such as "Internet + home improvement", "Internet + second-hand home furnishing", household appliances and furniture rental.
The development of the second-hand household sector will be encouraged. Home stores will be supported to strengthen cooperation with upstream and downstream enterprises, build a "everyone home" ecosystem and provide consumers with one-stop, integrated, full-scene home consumption solutions.
Home stores and shopping centres will be supported to set up experiential consumption capacity such as smart home experience halls and quality home life halls and explore the integrated development of home retail, entertainment, leisure and creative design etc.
All localities are encouraged to carry out renovation and upgrading of old houses through various means such as government support and enterprise promotion in conjunction with the renovation of old urban communities.
Enterprises are encouraged to carry out old house renovation design competitions, display excellent cases of upgrading and renovation, create old house renovation and partial renovation model rooms and introduce affordable products and service packages to meet diversified consumer demand.
To promote consumption home rejuvenation activities will be organised and carried out to introduce targeted policies and measures, guide enterprises to improve the quality and level of home consumption and supply, provide more high-quality, personalised, customised home products, increase incentives and support residents to replace or buy new green smart home products and carry out old house decoration.
Local governments and relevant industry associations will be supported to organise and carry out promotion activities such as having a home consumption season, home textile consumption Festival and home improvement Consumption Festival.
These activities will be coordinated with the National Consumption Promotion Month and the International Consumption Season.
The government will make good use of exhibition platforms such as the China International Import Expo and the China International Consumer Goods Expo to support the holding of professional home furnishing exhibitions in a market-oriented manner, showcase cutting-edge technologies and products in the home furnishing field and expand the supply of high-quality home furnishing products.
Europe
Signs of greater resilience in EU okoumé plywood manufacturing sector
The review investigation carried by the EC, which focuses on the years 2018 to 2021, is interesting for the insight it provides into the current extent and status of the EU okoumé plywood manufacturing sector.
The previous review published in April 2017 suggested that the EU sector was extremely fragile at that time, suffering from very low profit margins, weak demand and negligible levels of investment.
The latest review suggests that while the EU sector is much reduced from the period prior to 2010 and profitability is still low, its overall position has stabilised and is more resilient.
The product covered by the anti-dumping duties and investigated by the EC is that falling within TARIC code 4412 31 10 10 and defined as “plywood consisting solely of sheets of wood, each ply not exceeding 6 mm thickness, with at least one outer ply of okoumé not coated by a permanent film of other materials”.
This definition captures both “full okoumé” plywood with okoumé throughout and combi plywood with at least one outer face of okoumé, the rest being made of other wood.
The product is used for a variety of end-uses in the EU, notably exterior joinery and carpentry applications for boarding, shutter boards, exterior basements and balustrades and riverside panelling, and more decorative purposes particularly in vehicles and yachts, and for furniture and doors.
The EC’s analysis shows that EU consumption of okoumé plywood increased from 171,300 cubic metres in 2018 to 192,300 cubic metres in 2021 (a short-term dip to 171,700 cubic metres is explained by the pandemic).
Although a positive recent trend, consumption is still a long way behind an annual level of around 290,000 cubic metres during an earlier EU review in 2008-2009.
China’s share of the market was negligible between 2018 and 2021, as it was during the previous review covering the 2012-2015 period.
EU production of okoumé plywood was 164,600 cubic metres in 2018 rising to 174,000 cubic metres in 2021. Capacity utilisation was between 56 percent and 60 percent during this period. This compares to production of around 146,000 cubic metres per year with capacity utilisation of 80 percent during the previous 2012-2015 review period.
This indicates a solid recovery in both production volume and capacity between 2015 and 2021. However, capacity is still well below a level closer to 600,000 cubic metres in the 2008-2009 period.
Summary data from the EC’s review analysis on EU production and trade in okoumé plywood between the years 2018 and 2021 is shown on the right.
EU manufacturers share of the EU market for okoumé plywood decreased from 85 percent in 2018 to 81 percent in 2021. Share was lost primarily to imports from Gabon and Morocco. However, in this instance the longer-term trend is more positive for EU manufacturers whose share of the market was only around 70 percent during the 2012-2015 period.
Employment in the EU okoumé plywood manufacturing industry remained stable at around 670 people between 2018 and 2021, but this was a significant rise from less than 500 in 2015.
Sales prices of okoumé plywood manufactured in the EU increased from 956 EUR/cubic metre in 2018 to 1033 EUR/cubic metre in 2021. These prices are considerably higher than the 2012-2015 review period when they were around 770 EUR/cubic metre.
Over the long term though, they represent only moderate gains—and a significant decline in real terms when account is taken of inflation—compared to around 900 EUR/cubic metre during the 2008-2009 period.
Furthermore, the prices achieved between 2018 and 2021 are only just sufficient to cover the unit costs of production which increased from 939 EUR/cubic metre in 2018 to 1011 EUR/cubic metre in 2021.
Profitability on sales is therefore still low, though it did increase from 2.5 percent of turnover in 2018 to 6.9 percent in 2021.
Loss of EU manufacturers’ share of the market between 2018 and 2021 was at least partly due to higher prices compared to competitors in Gabon and Morocco.
Average prices for EU imports of okoumé plywood from Gabon were relatively stable at around 760 EUR/cubic metre between 2018 and 2021, while prices from Morocco increased from 850 EUR/cubic metre to 870 EUR/cubic metre during the same period.
The EC compared EU sales prices of domestic, Gabon and Moroccan manufacturers during the review period with commercial offers solicited from Chinese manufacturers by email for delivery to the EU and other third countries (in the Middle East, Turkey and the UK).
These prices were, at CIF level, 686 EUR/cubic metre for full okoumé and 458 EUR/cubic metre for faced okoumé for the EU market, and 371 EUR/cubic metre for faced okoumé for third countries.
The EC concluded that prices offered by Chinese manufacturers for okoumé plywood were substantially less than both EU manufacturers and manufacturers in other third countries. Chinese okoumé plywood would switch to EU market without anti-dumping measures says EC.
The EC was unable to accurately assess the level of China’s okoumé plywood production during the review period and therefore, only examined the situation of the whole Chinese plywood industry regardless of the type of wood species used.
On this basis, according to the EC, “significant production capacity potentially available in China is indicated by the production volumes of all types of plywood, which, based on the latest available FAO statistics, accounted for 76.4 million cubic metres in 2021”.
The EC also estimated total plywood production capacity in China at 270 million cubic metres per year at the end of 2021.
The EC concluded that “Given the large production capacities in the PRC, that dwarfed the EU demand of 192,000 cubic metres in the review investigation period (2021) regardless of the figure taken and that only a change from other types of wood to okoumé is needed to produce okoumé plywood, there is a high likelihood that Chinese producers would use their large production capacity to shift their production from other types of plywood towards the more lucrative okoumé plywood for export to the Union if the measures expire”.
The EC also suggested that the EU market would be “attractive” to plywood manufacturers in China since, during the review period, “Chinese exports prices of okoumé plywood to the Union market were higher than the Chinese export prices to all other third markets for which commercial offers were available.
Namely the export price offers at CIF level to the Union market were, on average, 23 percent higher than export prices to third countries at CIF level”.
The EC also note that other consuming countries are implementing “trade defence measures” on imports of Chinese plywood, including: the Republic of Korea (anti-dumping measures on plywood with at least one outer ply of tropical wood: of a thickness less than 3,2 mm); Morocco (anti-dumping measures on all plywood); the US (anti-dumping and countervailing measures on hardwood plywood); and Turkey (anti-dumping measures on certain types of plywood).
According to the EC “These measures contribute to export limitations for Chinese plywood producers and to the existence of sustained significant spare capacity of plywood in China and render the Union market more attractive for Chinese plywood imports”.
The EC concluded that “there is a strong likelihood that dumping would recur if the current measures were allowed to lapse. In particular, the level of the normal value established in the PRC, the level of Chinese export prices to third country markets and the Union, the attractiveness of the Union market and the availability of significant production capacity in the PRC all point to a strong likelihood of recurrence of dumping in case the current measures would be allowed to lapse”.
