Metla Project 3356

Competitive advantage of Finnish wood and timber in wood products markets

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Duration: 2002-2007   Keywords: Baltic countries, Great Britain, competition, energy wood, marketing, markets, wood products
Research Programme: Potentials for the utilisation of roundwood and wood raw materials in relation to the wood product markets

Objectives

Objectives of the project is to analyse the possibilities to develop and increase the demand of wood products. The project involves detailed surveys of consumers, companies and forest owners in the wood products chain. The following questions are investigated: what are the attitudes of consumers and companies towards wood products as well as towards wood in relation to substitution materials and competing export countries, what are the purchasing motives , what are the possibilities to find new market areas and new ways of using for wood products

Results

The studies carried out with Metla and Pellervo Economic Research Institute together have this far focused on the competence of wood on European markets, the outlook for engineered wood products, and market outlook in China. Overall, the results indicate that general competence of wood is good in Europe, and the Chinese markets seem promising regarding high quality interior products. However, for mainly small European wood industry companies it is necessary to create not only new far-processed products or new processes but also to develop new innovative marketing and service concepts; the whole way of doing business to remain globally competitive. One corner stone for positive development is better understanding of consumer needs.

The survey study "Competence and image of wood on the German building material markets" focused on wood-related opinions of German companies selling wood products. The data comprised interviews of 75 companies or business units selling wood products. The results indicate that visual properties, usability (like lightness and workability) and environmental quality are the main strengths of wood. The results also indicate that Finnish wood products suppliers could increase their activity in marketing (domestic suppliers are perceived more active than foreign ones). Marketing and product development could be based on the particular strengths of wood. End-users could be taken into consideration even more strongly when developing marketing communication. Developing product information and marketing material targeted at end-consumers, and providing this material for the use of the retailer companies could be helpful.

The study "Market prospects of engineered wood products in Germany" describes the present markets of engineered wood products, EWP´s that are used as beams (Glulam, LVL, I-joist, LSL, PSL) and the resent development of these markets. The study includes also Scenario-type assessment of EWP market prospects in Europe till the year 2012. The empirical data was collected in Germany by personal interviews from 13 experts of construction sector. The Delphi-method was applied to these interviews. According to the interviews the market of EWP’s will increase along with the probable increasing use of wood in construction. In addition the increased need for renovations will influence positively the consumption of EWP’s, especially I-joists. In Germany, which is the leading consumer of EWP’s in Europe, the customers seem to be increasingly interested in environmental issues, energy efficiency and life-cycle questions of the wood products. However, the use of EWP´s is increasing in Europe only slowly during the next 10 years.

The study focusing on the export possibilities of Finnish sawnwood and other wood products to China was based on literature, statistics and empirical data. The empirical data was collected both in Finland and in China by personal interviews. China is one of the world´s fastest growing economies with one fifth of the world´s population. China has recently become a member of the World Trade Organization (WTO) with commitments to further opening its markets to the world. Due to housing reforms that encourage Chinese citizens to own their homes and overall urbanization tendencies, demand for wood products as construction material will increase. Rising incomes among China´s emerging middle class will also rise spending on furniture and interior wood products. China´s own forest resources are inadequate for demand of wood products. Wood is, however not a common material as construction material at houses. Thus it is not easy to increase rapidly the consumption of wood products in structural construction. Hence it seems more likely that the export possibilities of interior wood products, especially of higher quality products will grow the fastest. Though the Chinese market seems promising, there are also many problems and risks in the export business, such as bureaucracy, business culture that is different from the western world, and tightening competition.

Project leader: Enroth, Raija-Riitta

Other researchers: Hänninen, Riitta, VA (2003), Kärnä, Jari (2007), Valtonen, Kari, VA (2003-07)


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Updated 12.06.2012
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