Wood Based Panels Market

Construction industry's potential for using wood frames to propel the wood-based panels market growth

The long-term fundamentals driving Chinese demand for wood are still favorable. By 2020, an additional 7-8 million new dwellings will be required due to the significant urbanization trend. As the Chinese government aims to achieve a 60% urbanization rate by 2020 and a 70% urbanization rate by 2030, another 50 million new residences would be required by that time, according to Margules Groome Publication. With a 6.9% annual growth in GDP per person, there is a rising desire for more expansive and high-quality homes.

With less than 0.05% of the residential construction sector in China, the wood frame construction is now a marginal player. Notably, several demonstration projects for wooden buildings have been created since the market's growth potential is increasingly acknowledged. For instance, a six-story wooden building is expected to be completed this year, according to proof of concept building projects like the most recent proposal by Dingchi Wood Industry Co. Ltd. When completed; it will be China's tallest modern timber frame structure.

Although the Chinese market for structural timber and engineered wood products has enormous growth potential, it is still in the early stages of development. Thus, this factor is driving the market CAGR for wood-based panels.

Furthermore, people are investing in home decor as housing conditions get better. The income that is available per person increased by 8.9% in 2018. The furniture industry has expanded tremendously due to this greater purchasing power. Furniture makers' revenue increased 1.5% to RMB711.72 billion (US$103.02 billion) in 2019, while overall profits increased 10.8% to RMB46.27 billion (US$6.69 billion), according to the National Bureau of Statistics. Furniture constructed of rosewood is highly prized since it is a fine hardwood. Rosewood, most frequently used today, is mahogany. As the need for eco-friendly furniture increases ly, this business is flourishing.

The construction sector has developed into a thriving and effective manufacturing sector. Demand for building and real estate projects is rising across all nations due to macroeconomic and disruptive megatrends such as rising urbanization, expanding trade, and demographic trends like rising income levels, technology, and sustainable surroundings. As a result, many initiatives have started to build sustainable, socially inclusive communities because infrastructure development is a key factor in any nation's economic ability.

However, the introduction of cutting-edge technologies for incorporation and ongoing improvement in the wood-based panels and their manufacturing process is a result of the growing need for increased product quality and reduced manufacturing costs. This aspect will accelerate wood-based panels market revenue ly during the anticipated period.

The Global Wood-based Panels Market Industry is experiencing a notable shift towards sustainable building practices. As environmental concerns gain prominence, architects and builders increasingly favor wood-based panels due to their renewable nature and lower carbon footprint compared to traditional materials. This trend is reflected in the projected market value of 98.9 USD Billion in 2024, as more construction projects adopt eco-friendly materials. Governments worldwide are also implementing regulations that encourage the use of sustainable materials, further driving demand. The emphasis on sustainability is likely to bolster the market, as consumers and businesses alike prioritize environmentally responsible choices.

By region, the study provides the market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The Asia Pacific wood-based panels market accounted for USD 33.8 billion in 2021 and is expected to exhibit a 41.90% CAGR during the study period. The demand for the product in packaging and construction applications is expected to be driven by developing economies like China, India, and Japan. Due to its rapid population growth, which necessitates substantial construction expenditure, China is the largest manufacturer and consumer of wood-based panels in Asia-Pacific.

Increasing industrial exports from the nation fueling an increase in packaging applications, boosting product demand. The wood-based panels market in India is poised for growth, driven by increasing demand in construction and furniture industries. 

Further, the major countries studied in the market report for wood-based panels are: The U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3:  WOOD-BASED PANELS MARKET SHARE BY REGION 2021 (%)Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

The European wood-based panels market is expected to grow at a substantial CAGR from 2022 to 2030. The region's demand is primarily driven by Germany, the region's leading furniture market. The region's furniture industry's expansion is also expected to boost particleboard demand in the coming years. Further, the Germany wood-based panels market held the largest market share, and the UK wood-based panels market was the fastest-growing market in the European region

North American wood-based panels market accounts for the second-largest market share. Rising consumer spending on furniture and significant growth in the construction industry is expected to drive up demand for wood-based panels in this region. Furthermore, the main market for the wood-based panels industry is expected to grow rapidly due to rapid industrialization and infrastructure upgrades in the coming years. Moreover, US wood-based panels market held the largest market share, and the Canada wood-based panels market was the fastest-growing market in this region.

The major market players are spending a lot on R&D to increase their product lines, which will help the wood-based panels industry grow even more. Market participants are also taking various strategic initiatives to grow their worldwide footprint, including new product launches, mergers and acquisitions, increased investments, contractual agreements, market developments and collaboration with other organizations. To grow and remain in a wood-based panels industry that is becoming more competitive and growing, industry competitors must provide affordable products.

Manufacturing locally to cut operational costs is one of the main business methods manufacturers use in the worldwide wood-based panel industry to benefit customers and grow the sector. In recent years, the wood-based panel business has given medicine some of the most important advantages. The wood-based panels market major player such as Ante Group – Germany, Donghwa Group - South Korea, Klein Holz AG, Kronospan, Caihong Wood Co, Weyerhaeuser Company and Norbord.

An American timberland corporation, The Weyerhaeuser Company, administers 14,000,000 acres of additional forests under long-term licenses in Canada and owns over 12,400,000 acres of timberland in the United States. The business also makes wood items. The real estate investment trust is how it runs. In 2021, the high-quality Alabama timberlands will be purchased by Weyerhaeuser Company from Soterra for 69,200 acres. For about $149.00 million, the business bought these timberlands. In addition to growing its clientele and potential export markets, the company will improve its operations in the timberland sector.

Also, in the overall environmentally friendly wood supply chain, Kronospan plays a significant role. Wood waste from the sawmill industry is used to make wood-based panels, helping maintain timber's value as a scarce raw material. In 2019, to enhance its annual plywood production in the market, Kronospan Limited entered the plywood business in Belarus under the Kronobuild brand.