EU embraces China's burgeoning wood market

As the second largest timber consumer worldwide, China is seen as a pivotal potential market for the woodworking sector, leading an array of businesses to look toward the country's wood industry.

According to the China Association of Forest Products Industry, China's total wood consumption has increased by 173 percent in the past 10 years. By 2020, the demand for China's wood production is expected to increase 33.4 percent to at least 800 million cubic meters, up from 600 million cubic meters.

However, the domestic supply of timber production is restricted by resources and the rising costs of logging in China.

Moreover, China announced the prohibition of commercial cutting of natural forests in 2017.

The decreased volume of timber production has pushed up the import volume. As a result, China's reliance on timber imports rose from 48.4 percent in 2013 to 56.4 percent in 2017, and is expected to keep growing in the next few years.

With its huge market potential, the industry has lured a group of global businesses from several industries including construction, papermaking and furniture manufacturing. The Latvia-Estonia-Finland (LEF) Network to China is a program aimed at seeking long-term connections between entrepreneurs in the Central Baltic region with Chinese counterparts, and creating an export channel to China.

The LEF Network to China targets wood products with added value, which includes wood building materials, furniture, wooden doors and windows, and even wooden houses. It consists of more than 80 refined and experienced woodworking companies based in Latvia, Estonia and Finland. The partners involved are eager to explore and sell their products to the Chinese market.

Līga Sičeva, head of the EU Projects Department of the Latvian Chamber of Commerce and Industry, spoke highly of the potential in cooperation with China.

"The demand of the high-end wood interior design industry in China has developed positively thanks to a higher standard of living and people's awareness of environmental protection. Then stable quality, heat and cold resistant wood produced in the Central Baltic region is their must-have," said Sičeva.

Among European exporters, Finland's 2018 market share in the Chinese lumber market increased by 27 percent year-on-year. The trend lines for the import of softwood logs in 2018 from Estonia and Latvia skyrocketed 56 percent and 320 percent respectively.

Henri Murtojarvi, project director of Tammiston Puu, a Finnish manufacturing company specialized in landscaping and outdoor leisure construction services, also anticipated the growth in the Chinese wood market, and is already fully prepared for the next step in cooperation with China.

Despite abundant opportunities, entering the Chinese market is not without challenges.

Ivars Akerfeids, chairman of Amber Wood, a Latvian manufacturer of high-quality oak and ash solid flooring and parquet, mentioned obstacles between getting access to the intended customers in the Chinese market, and a lack of knowledge of the wood industry's market segments.

Li Peixin, marketing director from the Shanghai Timber Trade Association and an expert in the Chinese wood industry, is optimistic about imports of European timber to China. He mentioned the volume of softwood from the US has slid 40 percent this year due to the trade tensions and the unstable exchange rate. In turn, this creates a huge and profitable market for European wood competitors.

Some participants may know little about the Chinese wood industry, but many are not about to call it quits just yet, as they are looking to seize development opportunities at the very start, Li said.