India fastest growing market for plywood

The global market for plywood is projected to reach 223.4 million cubic metres by the year 2022, driven by recovering construction activity in most countries worldwide; rise in high value, high rise constructions; growing preference for plywood in interior design especially of floors, ceilings, and walls.

According to a report put out by Research & Markets, plywood ranks among the most commonly utilised wood products, given its flexible, inexpensive, workable and re-usable features. It is a wood panel made of thin sheets of wood veneer, and is resistant to splitting, cracking, twisting and shrinking.

Construction and furniture represents major end-use applications of plywood. The significance of plywood in the construction sector has increased substantially over the last decade due to the various benefits of plywood, such as maintainability, strength-to-weight ratio and price.

A growing construction market, particularly residential housing, spurt in renovation and remodelling projects and increased spending on bedroom and dining room furnishing represent major drivers of plywood consumption worldwide.

In the packaging sector, on the other hand, growing popularity of alternative materials such as cardboard and plastic will challenge growth of plywood based packaging solutions.

Production of plywood is migrating from North America, Europe and South Asia to China. Quality and cost continue to drive plywood supply mix worldwide.

In 2015, Russian plywood made its mark in international trade, particularly in the EU market, driven by relatively lower prices of Russian birch plywood. Anti-dumping duties and sustainability focused regulations are also impacting the sourcing of plywood.

A major challenge for the plywood industry is the higher prices of plywood in comparison to oriented strand board (OSB), which provides benefits similar to plywood. OSB has emerged in recent years as a major competitor to plywood, although the rate of substitution remains varied in different parts of the world.

As stated by the new market research report, China represents the largest market worldwide led by growing construction activity, especially new construction and sales during the first half of 2016. In the immediate future however, the slowdown in the country’s GDP, and higher housing inventories are expected to put downward pressure on the market.

India ranks as the fastest growing market worldwide with a CAGR of 9.2% over the analysis period. Growing population, increasing income levels, rapid urbanisation and resulting growth in demand for housing, increasing preference for branded plywood are main drivers of growth in the Indian market.

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