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

Background
Hardwood plywood and flooring are mainstay industries within the ASEAN wood-based
products sector, and both are export oriented. ASEAN shipments of hardwood plywood
and flooring represent an estimated 30 percent of all primary manufactured wood
products (excluding roundwood) and 20 percent of wood-based products as defined in the
ASEAN priority sector (which includes wood furniture). 11 However, in 2008, only an
estimated 15 percent of ASEAN production of hardwood plywood was consumed within
the region. 12 In that year, ASEAN exports of hardwood plywood and flooring accounted
for $4.9 billion (table 5.1), or 27 percent of total world exports of these commodities. 13
ASEAN’s largest market is Japan, which accounts for approximately 40 percent of the
region’s hardwood plywood and flooring exports.
Malaysia and Indonesia dominate production in the ASEAN region, accounting for over
90 percent of ASEAN production (an estimated 57 percent and 34 percent,
respectively). 14 Malaysia and Indonesia are also the region’s two largest exporters,
together accounting for over 95 percent of ASEAN exports (an estimated 52 and
44 percent, respectively). 15 These figures mask some significant shifts that have occurred
in the region over time. Indonesia’s plywood capacity has declined significantly over the
past five years, while Malaysian production has remained steady. The number of
operating plywood plants in Indonesia declined from 128 in 2003 to only 25 in 2009. 16
The Indonesia plywood industry is contracting because of less government support,
tightening timber supplies, and lost market share in industrialized countries concerned
about the legality of wood sourcing. 17 Malaysia currently has 91 operating plywood
plants. 18 Only a handful of plywood facilities operate in the other ASEAN countries,
which collectively account for less than 6 percent of regional production. 19 Brunei
Darussalam (Brunei) is the only ASEAN member without any plywood production
capacity. The Philippines was once the largest global hardwood plywood producer, but it
exhausted its supply of exploitable timber resources by the 1980s and now accounts for
only 2 percent of the region’s output. The country’s forest management agency reported
39 operating plants in 2007. 20 Separate data on wood flooring manufacturing by ASEAN
countries are not available, but Malaysia and Indonesia are also the region’s largest
producers and exporters of engineered and wood laminate flooring products. 21
11 Estimated based on FAO production data and unit export values, and value of global wood furniture
imports from ASEAN members based on Global Trade Information Service (GTIS) data, accessed
March 15, 2010.
12 Calculated using Food and Agriculture Organization (FAO) plywood export value as a percent of
derived value of plywood shipments (production times unit export value).
13 See table 2.4 for total exports of wood-based products.
14 FAO, FAOSTAT database,.
15 See table 5.3.
16 Government representative, interview by USITC staff, March 2, 2010.
17 Industry representative, telephone interview by USITC staff, March 2, 2010.
18 Industry representative, interview by USITC staff, Kuala Lumpur, March 12, 2010.
19 Government representatives, interviews by USITC staff, Hanoi, March 8, 2010; FAO, FAOSTAT
database, accessed January 7, 2010; Philippines Forest Management Bureau, 2007 Forestry Statistics,
accessed March 17, 2010.
20 Philippines Forest Management Bureau, 2007 Forestry Statistics, accessed March 17, 2010.
21 Based on GTIS trade data (accessed March 15, 2010) and confirmed by industry representative,
interviewed by USITC staff, Washington, DC, March 30, 2010.
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