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European Panel IndustryEuropean Panel IndustryUNECE Market Discussions, Geneva, October 2007 UNECE Market Discussions, Geneva, October 2007
Mr Ladislaus DöryMr Ladislaus DöryPresident of EPFPresident of EPF
Member of the Board of ConstantiaMember of the Board of Constantia
Ms Bénédicte HendrickxMs Bénédicte HendrickxEconomic adviser EPFEconomic adviser EPF
European Woodworking IndustryEuropean Woodworking Industry
Wood-based panels
9%
Sawing, planing,
impregnation13%
Packaging4%
Other5%
Furniture51%
Construction timber incl.
Parquet18%
EUR 230 billion in EUEUR 230 billion in EU--2727
Source: EPF & EurostatSource: EPF & Eurostat
sawmilling10%
furniture43%
other11%
packaging3%
wood-based panels
1%
construction elements
32%
European Woodworking IndustryEuropean Woodworking Industry
sawmilling11%furniture
55%
other6%
packaging3%
wood-based panels
5%
construction elements
20%
2.3 million jobs in EU2.3 million jobs in EU--2727
Source: EPF & EurostatSource: EPF & Eurostat
340,000 enterprises in EU340,000 enterprises in EU--2727
Plywood7%
Particleboard61%MDF
22%
OSB6%
Hard/Softboard4%
WoodWood--based Panels in Europe* 2006based Panels in Europe* 2006
Total : 60 million m³Total : 60 million m³*excluding Russia & *excluding Russia & TurkeyTurkey
Annual Particleboard ProductionAnnual Particleboard Production
2022242628303234363840
2002 2003 2004 2005 2006 2007*
(1000 m³)(1000 m³)
+4.0%+4.0%+4.0%+4.0%
In 2006: 37 million m³
Overview Particleboard IndustryOverview Particleboard Industry
30,159 31,352 33,220 31,987 33,957
05,000
10,00015,00020,00025,00030,00035,00040,000
2002 2003 2004 2005 2006c o n sump tio n
p ro du c tio n
consumption production
(1,000 m³)(1,000 m³)+4.0%+4.0%
+6.2%+6.2%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
'99 '00 '01 '02 '03 '04 '05 '06 '07*
MDF Production in EuropeMDF Production in Europe(million m³)(million m³)
In 2006: 12.4 million m³ production
+5.9%+5.9%+6%+6%
0
3,000
6,000
9,000
12,000
15,000
'02 '03 '04 '05 '06 '07*c o n sump tio n
p ro d u c tio n
consumption production
annual MDF Production / Consumptionannual MDF Production / Consumption
+6%+6% +5.1%*+5.1%*
+5.9%+5.9%+6%*+6%*
0
0.5
1
1.5
2
2.5
3
3.5
'99 '00 '01 '02 '03 '04 '05 '06
OSB Production in EuropeOSB Production in Europe(million m³)(million m³)
+12%+12%
In 2006: 3.5 million m³ production
annual OSB Production / Consumptionannual OSB Production / Consumption
0
1,000
2,000
3,000
4,000
'02 '03 '04 '05 '06c o n sump tio n
p ro d u c tio n
consumption production
+15%+15%
+12%+12%
0
1,000
2,000
3,000
4,000
5,000
'02 '03 '04 '05 '06
Plywood Production in EuropePlywood Production in Europe(1,000 m³)(1,000 m³)
In 2006: 3.5 million m³ production
+%+% +2.6%+2.6%
01,0002,0003,0004,0005,0006,0007,0008,000
'02 '03 '04 '05 '06p ro du c tio n
c o n sump tio n
production consumption
annual Plywood Production / Consumptionannual Plywood Production / Consumption
+4.5%+4.5% +0%+0% +4.5%*+4.5%*+6.8%+6.8%
Capacity Extensions 2007Capacity Extensions 2007--20092009
LATVIALATVIA500,000 m³ OSB500,000 m³ OSB
LITHUANIALITHUANIA300,000 m³ PB300,000 m³ PB
SLOVAKIASLOVAKIA500,000 m³ PB500,000 m³ PB
SWEDENSWEDEN100,000 m³ PB100,000 m³ PB
ROMANIAROMANIA600,000 m³ PB600,000 m³ PB
POLANDPOLAND600,000 m³ PB600,000 m³ PB
500,000 m³ MDF500,000 m³ MDF
GermanyGermany450,000 m³ MDF450,000 m³ MDF
SPAIN SPAIN 200,000 m³ MDF200,000 m³ MDF
HUNGARYHUNGARY280,000 m³ MDF280,000 m³ MDF
Wood demand (2006)Wood demand (2006)41.4 41.4 mio mio dry dry tonnestonnes
2.4 2.4 mio mio dry dry tonnestonnesadditionaladditional
in 2008in 2008--20102010recovere
d12%
by-products
40%
round-wood48%
Trend of activity indicator Trend of activity indicator -- construction construction compared with previous monthscompared with previous months
strongstrong
improving / goodimproving / good
stablestable
cooling downcooling down
Production furniture Production furniture index 2000 = 100index 2000 = 100
Source: European Source: European CommissionCommission
60
70
80
90
100
110
120
2001 2002 2003 2004 2005 2006
furniturechairs & seatsoffice & shopkitchenother
Evolution of Wood Costs in EUEvolution of Wood Costs in EUJanuary 2002 January 2002 –– March 2007March 2007
2000 = 100
0%10%20%30%40%50%60%70%80%90%
I/02
III/02 I/0
3III/
03 I/04
III/04 I/0
5III/
05 I/06
III/06 I/0
7
Wood oil price CPS (Unctad)Wood oil price CPS (Unctad)May 2004 May 2004 –– April 2007April 2007
2000 = 100
100
120
140
160
180
200
220
240
260
280m
ai20
04
juil2
004
sep2
004
nov2
004
jan2
005
mar
s200
5
mai
2005
juil2
005
sep2
005
nov2
005
jan2
006
mar
s200
6
mai
2006
juil2
006
sep2
006
nov2
006
jan/
07
mar
s200
7
agricultural raw materialsNon-coniferous woods, UK import price index ($ equivalent)Crude petroleum, average of Dubai/ Brent/ Texas equally weighted ($/baril)
Wood availability indicator 2Q2007Wood availability indicator 2Q2007
shortfallshortfall
sufficientsufficient
criticalcritical
•• Forest inventories are very inaccurateForest inventories are very inaccurate•• Small forest owners are difficult to persuade to Small forest owners are difficult to persuade to
enter the wood marketsenter the wood markets•• Large forest owners are not interested in market Large forest owners are not interested in market
share. Higher wood prices allow them to earn what share. Higher wood prices allow them to earn what they need by cutting lessthey need by cutting less
•• RES policy is directing the long term price of wood RES policy is directing the long term price of wood to its energy content, thereby linking it to fossil fuel to its energy content, thereby linking it to fossil fuel pricesprices
Key problems to wood mobilisationKey problems to wood mobilisation
European Commission statesEuropean Commission states::
•• Wood plays a major role in combating climate changeWood plays a major role in combating climate change•• Greater use of wood products will : Greater use of wood products will :
stimulate the expansion of Europe‘s forests, andstimulate the expansion of Europe‘s forests, andreduce greenhouse gas emissions,reduce greenhouse gas emissions,by substituting for fossil fuel intensive productsby substituting for fossil fuel intensive products
•• The Commission is examining ways to encourage these The Commission is examining ways to encourage these trendstrends
Wood tackles climate changeWood tackles climate change
((Enterprise UpdateEnterprise Update, , March March 2003)2003)
“It has been estimated that an annual 4% increase to 2010 in Europe’s wood
consumption would sequester an additional 150 million tonnes of CO2per year and that the market value of this environmental service would be
about € 1.8 billion a year”CEI-Bois Roadmap 2010, Executive Summary, 2004
Tackle climate change: use wood! The science
The The woodwoodworkingworking industrindustry y gives value to the forest...gives value to the forest...
…and respects the carbon cycle!…and respects the carbon cycle!
Added Value Chains ComparedAdded Value Chains Compared
(FBI Forum, 2003)(FBI Forum, 2003)Multiplication Multiplication FFactor 10actor 10
Social Value Chains ComparedSocial Value Chains Compared
(FBI Forum, 2003)(FBI Forum, 2003)Multiplication Multiplication FFactor 30actor 30
Use Wood BEFORE Burning It!Use Wood BEFORE Burning It!
Respect the value and employment chains of wood!Respect the value and employment chains of wood!
Use MORE woodUse MORE wood--based productsbased products: they are eco: they are eco--efficient and efficient and mitigate Climate Changemitigate Climate Change
EPF Recommends:EPF Recommends:
Use Wood BEFORE Burning It!Use Wood BEFORE Burning It!
Respect the value and employment chains of wood!Respect the value and employment chains of wood!
Use MORE woodUse MORE wood--based productsbased products: they are eco: they are eco--efficient and efficient and mitigate Climate Changemitigate Climate Change
EPF Recommends:EPF Recommends:
Mobilise more woodMobilise more wood by:by:
Optimising use of net annual forest growthOptimising use of net annual forest growthMore efficient use of harvest residuesMore efficient use of harvest residuesImproved logistic/technical facilitiesImproved logistic/technical facilitiesPromoting afforestation & short rotation forestryPromoting afforestation & short rotation forestryIdentifying Unknown Forest OwnersIdentifying Unknown Forest Owners
Enhance wood recycling/recovery practices and stimulate Enhance wood recycling/recovery practices and stimulate selectiveselective collection of recovered woodcollection of recovered wood
EPF Recommends:EPF Recommends:
Focus all Biomass Action Plans on Focus all Biomass Action Plans on wood mobilisationwood mobilisationAlways involve the woodAlways involve the wood--based sector using their competence based sector using their competence in the forestin the forest--wood chainwood chainThis will allow to take account of the specific regional/local This will allow to take account of the specific regional/local situationsituation
Encourage efficient use of wood biomass energyEncourage efficient use of wood biomass energy, , (e.g. CHP)(e.g. CHP)
EPF Recommends:EPF Recommends:
Stop subventions to industrial and energyStop subventions to industrial and energy--inefficientinefficientinstallationsinstallations as they distort competitionas they distort competition