ASEAN: Regional Trends in Economic Integration, Export ... - USITC

CHAPTER 5
Wood-based Products: Hardwood
Plywood and Flooring
Wood-based Products Overview 1
The ASEAN wood-based products priority sector includes processed wood products,
such as lumber, plywood, other panel products, flooring, and wooden furniture.
Unprocessed wood, such as logs, poles, and posts, are specifically excluded from the
sector, as are pulp and paper products. This chapter provides a brief discussion of the
wood-based products sector and then the region’s hardwood plywood and flooring
industry, an important wood products segment that is representative of the competitive
challenges and trends facing the region’s wood products producers.
Historically, ASEAN countries have been significant contributors to global trade in
wood-based products. The region is known for products made of tropical wood species
that are desirable for their technical attributes as well as for their aesthetic qualities when
used in furniture, cabinetry, flooring, and architectural woodwork. Plantation-grown
woods such as rubberwood and teak are increasingly used in manufacturing wood-based
products, as wood supply from the tropical natural forests becomes less available. 2
Indonesia and Malaysia are major ASEAN players in the global trade of lumber,
plywood, veneer, moldings, and flooring. Malaysia is the world’s largest exporter of
hardwood lumber (i.e., non-coniferous species) and the second largest exporter of
hardwood plywood, behind China. Indonesia is the third largest exporter of hardwood
plywood. Vietnam has emerged as the second largest exporter of wooden furniture, again
behind China. Malaysia, Indonesia, and Thailand are also significant exporters of wooden
furniture and furniture components. ASEAN exports of wood-based products increased
from $14.9 billion in 2004 to $17.7 billion in 2008 (table 2.4), although ASEAN global
market share remained about the same, slipping from 11.6 percent to 11.1 percent. 3
ASEAN countries have been historically competitive in this sector largely because of
their abundant and relatively low-cost wood supply. However, the region’s international
competitiveness is being challenged by Chinese expansion and by concerns in major
markets about deforestation and illegal logging. Wood supply has also become less
certain in recent years as natural tropical forests are more fully exploited and more
restrictions are placed on their harvesting. As wood supply becomes more of an issue, the
region is shifting its manufacturing to more highly processed wood products, such as
flooring and furniture.
Because of the uncertainty of securing adequate wood supplies, relatively little foreign
investment flows into wood-based products manufacturing in the ASEAN countries.
Furniture manufacturing and forest plantations are the two areas where foreign
1 See app. F for a list of the Harmonized System numbers covered under this priority sector.
2 Industry representative, interview by USITC staff, Bangkok, March 15, 2010.
3 WITS, Integrated Data Warehouse (accessed March 29, 2010).
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