Present Situation and Countermeasure of Plywood Export in China

Present Situation and Countermeasure of Plywood Export in China

I. Current situation of export trade of plywood industry

Under the environment of environmental protection and trade barriers, the international plywood market is facing many difficulties, especially in the United States, which is the largest export market of plywood in China. They have raised the import threshold, and some products which do not meet the mandatory standards of formaldehyde emission in the United States have been restricted. In addition, the anti-dumping duty rate of the United States on solid wood composite flooring has reached 13.74%, which is 9.03 percentage points higher than in the past. It has a great influence on the export of plywood in China.

II. Problems in Export Trade of Plywood Manufacturing Enterprises

(1) Trade barriers

The developed countries such as Europe, America and Japan have a strong economic foundation, a long history of industrial development, and obvious advantages in environmental protection. On this basis, they have established a higher entry threshold for forest products trade in international trade. In November 2017, the United States launched a war of trade barriers against China and imposed a double anti-dumping ruling on China’s plywood exports, claiming that Chinese enterprises dumped 183.36% of the hardwood plywood in the United States and that Chinese government subsidized enterprises from 22.98% to 194.90%, according to which anti-dumping duties would be levied. In May 2017, South Korea decided to continue to levy anti-dumping duties on China’s imported hardwood plywood products for a period of 3.36%. The annual anti-dumping tax rates for Chinese plywood enterprises ranged from 4.57% to 27.21%. This series of uninterrupted trade protection actions seriously hindered the survival and development of Chinese plywood enterprises, especially export-oriented plywood enterprises, and brought severe challenges to Chinese traditional industries.

(2) The export market concentration of plywood manufacturing enterprises is still high

From the market structure, China’s plywood exports are concentrated in North America, Asia and Western Europe, with the United States, Japan, the United Kingdom, the Philippines, the United Arab Emirates and other countries. The top five exporters did not change their rankings in 2017, with 51% of their total market size, including a 2.1% decrease in dependence on the US market and a 3% increase in market concentration in Asia. Excessive concentration of export market distribution is not conducive to risk diversification of Chinese plywood enterprises.

(3) The export products of plywood manufacturing enterprises are of low grade.

China’s plywood industry has a low degree of concentration. Most of the plywood enterprises are small enterprises, such as three-capital enterprises and private enterprises, especially veneer processing enterprises, which account for a high proportion. The production technology level of these enterprises is low, the product type is single, the quality standards and environmental protection requirements related to products are not well understood, and the market can not be accurately positioned. Therefore, the market environment can be controlled and flexible. Poor coping ability, old equipment, backward technology and low market competitiveness.

(4) Plywood production enterprises have a low degree of scale and a single product structure.

China’s plywood industry has a low degree of concentration. Most of the plywood enterprises are small enterprises, such as three-capital enterprises and private enterprises, especially veneer processing enterprises, which account for a high proportion. The production technology level of these enterprises is low, the product type is single, the quality standards and environmental protection requirements related to products are not well understood, and the market can not be accurately positioned. Therefore, the market environment can be controlled and flexible. Poor coping ability, old equipment, backward technology and low market competitiveness.

(5) Increased production cost of plywood and insufficient competitive advantage

Plywood industry belongs to resource-dependent and labor-intensive industries. In recent years, problems such as shortage of domestic resources and rising labor costs have emerged. With the increase of transportation cost, the increase of raw material price exceeds the increase of average price of plywood products, the loss of competitive low-price advantage, the development of plywood industry encounters many obstacles, and the survival and development of plywood enterprises, especially those mainly engaged in export trade, is becoming increasingly difficult.

(6) The quality of plywood is serious and the industrial transformation and upgrading is difficult.

Plywood industry is a traditional industry in China’s plate production. However, with the intensification of international competition, insufficient accumulation of technical capital, weak ability of independent innovation, and shortage of advanced production technology and equipment, it is difficult for low-cost and low-quality plywood products to meet market demand. In recent years, the problems of backward plywood production, excessive capacity, unreasonable industrial structure and unqualified product quality have gradually become prominent, which has become an important factor hindering the export of products.

3. Countermeasure of Plywood Manufacturing Enterprises

(1) Implementing diversified export strategy and opening up new markets

In order to reduce the potential market risk, Chinese plywood manufacturers should implement diversified export strategy. On the basis of consolidating traditional markets such as Europe, America and Asia, they should gradually open up new markets such as the Middle East and Africa, which have larger market demand potential. By strengthening trade cooperation with these emerging countries, they should gradually reduce their dependence on traditional markets such as the United States and Asia.

(2) Investing in the Construction of Overseas Tropical Timber Cultivation Bases

Plywood industry is a resource-consuming industry, but most of the world’s major forest resources are concentrated in Russia, South America, Central Africa and other regions, accounting for 60% of the world’s forest area. China’s forest resources are scarce, and the national forest area is only about 200 million hectares. Therefore, it is particularly important to speed up the construction and cooperation of overseas tropical timber cultivation bases. Domestic plywood manufacturers can reduce the import cost of precious timber by investing in the forest management rights of precious overseas tree species with the help of communication at the national level.

(3) Strengthen the Independent Innovation Ability of Enterprises in Science and Technology

The production of high-end plywood products needs not only raw materials such as high-quality wood, but also advanced production technology to support enterprises. On the one hand, we can introduce professional production equipment by increasing capital investment to improve production efficiency, at the same time, we can further improve the process accuracy of each production link, and accelerate the transformation of our products to high added value. On the other hand, domestic small and medium-sized plywood manufacturers should continue to learn from leading industry enterprises and even foreign excellent plywood manufacturers, and carry out corresponding enterprise combination. In the process of learning and cooperation, we should increase investment in R&D, encourage independent innovation, attach importance to the protection of patented technology and technical property rights, and realize technological innovation through patent introduction, so as to enhance our brand value.

(4) Give play to the effect of industrial cluster and accelerate the transformation and upgrading of industrial structure

Plywood enterprises are mainly small enterprises with small production scale and single product structure, which leads to the bottom of the international market for Chinese plywood. In order to improve this situation, domestic plywood enterprises should attach great importance to enterprise cooperation, make full use of the convenience of geographical location and the similarity of production patterns and product types, vigorously promote industrial agglomeration, and jointly carry out production and sales activities through joint ventures, cooperation or alliances. In the process of production, each enterprise should use its own advantages to produce and process intermediate products, reduce waste of resources, combine production through circulation and exchange, pay attention to adjusting product structure, meet the upgrading of consumer demand, improve product quality from improving veneer quality in an all-round way, improve production efficiency through upgrading equipment, and through new products. The application of technology enhances competitiveness, further reduces production costs, diversifies product structure, strengthens the ability to deal with market risks, and enlarges market share.

(5) Emphasizing the Construction of Independent Brands and Creating Characteristic Brand Advantages

Brand is the image of an enterprise, which represents the popularity, reputation and recognition of the enterprise. It is the intangible assets of the enterprise. Enterprises must attach great importance to management and brand building, make use of their own advantages to build their own unique brand. In the choice of brand building strategies, plywood enterprises should strengthen regional brand building, adopt multi-brand strategies, strengthen and develop good cooperation among large enterprises, fully tap local cultural resources, build regional brand advantages, and cater to different consumers and consumers. In many aspects, such as region, plate use, etc., it is necessary to establish suitable multi-brands for subdivision. Through online and offline publicity, preferential sales and other means, the brand will enter the market, establish a good reputation, bring valuable intangible assets to enterprises.

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