09 March 2009

China: Pizhou’s government pushes for development of panel industry

Pizhou City of Jiangsu Province is one of four major national wood-based panel processing bases. There are more than 3,000 wood products processing enterprises and more than 2,200 downstream production lines worth RMB16 billion yuan in output value.
Forest industry’s contribution to revenue and farmers’ incomes at the national level is 20% and 25%, respectively. In responding to the economic slowdown, Pizhou City’s government has taken measures to enhance its international competitiveness and capability to mitigate risks using a variety of approaches.
First, Pizhou City has strengthened its industrial raw materials forest base. The area of industrial raw materials base in Pizhou has expanded rapidly. Currently, poplar stocks in the City total 2.8 million m³ to guarantee sustainable development of Pizhou’s forest industry. Second, leading enterprises are supported by new technology. The Pizhou government has implemented strategies for developing large-scale forestry industries as driving forces of the economy, to accelerate technology development and expand the scale of production.
Third, the City has worked to keep the international market stable and expand the domestic market. Pizhou wood-based panel exports make up 70% of the national total and are popular in Europe, America and Asia.
In order to keep international cooperation stable, the Pizhou government has set up representative sales offices and established selling agent relationships with companies in the US, France, Germany and South Korea, as well as 10 stable export ports.
The Pizhou government is expanding its domestic market, establishing new sales offices in 12 big and middle size cities, and setting up 40 websites for small and medium-scale enterprises to strengthen the exchange of market information on wood-based panels.
Hunchun gains from booming European plywood sales Plywood enterprises have been an important contributor to the development of the economy in Hunchun and the city’s plywood exports have continued to grow in recent years. According to statistics from the Hunchun Exit-Entry Inspection and Quarantine Bureau, during January to November 2008, Hunchun’s plywood exports were 58,800 m³ valued at USD69.58 million, up 12% by volume and 23% by value from the same period in 2007.
Of the total, nearly 90% of plywood was exported to Europe, amounting to 51,300 m³ by volume and valued at USD59.96 million, up 16% by volume and 33% by value, respectively, from the same period in 2007. Foreign investment enterprises are the main drivers of plywood exports. During January to November 2008, plywood exports by foreign enterprises were 37,400 m³ and worth USD44.17 million, an increase of 18% by volume and 38% by value from the same period in 2007. Plywood exports by state-owned enterprises amounted to 20,400 m³ by volume and valued at USD25 million, were 841 m³ and worth USD0.26 million.
Hunchun City is located in the lower reaches of Tumen River in the southeast of Jilin Province, the geometric center of the Northeast Asian region and borders the China, North Korea and Russia. The City has developed substantial transportation infrastructure, including a highway and a railway port connected with Russia and two highway ports connected with North Korea.

Guangdong furniture exports jump 27% in 2008
According to statistics from China’s Customs, furniture exports through Guangdong Port in 2008 rose 27% to USD11.763 billion. Overall furniture exports through Guangdong Port in 2008 rose 55% to USD8 billion.
Furniture exports by foreign enterprises dominated the trade and grew 6% to USD5.38 billion, accounting for 46% of furniture exports. Furniture exports by private enterprises rose significantly (77%) to USD4.74 billion.
Furniture exports by state-owned enterprises increased 11% to USD1.31 billion.
The US and EU were the main destinations for Guangdong furniture. However, furniture exports to the US rose slightly by value (2%) to USD4 billion, while exports to the EU grew substantially (33%) to USD2.4 billion. The value of furniture exports to the two markets made up 55% of Guangdong’s total. In addition, furniture exports to the Russian Federation, ASEAN, the UAE and Saudi Arabia rose markedly, amounting to USD810 million, USD660 million, USD310 million and USD230 million, respectively from 2007.

Economic downturn leads to closure of 7000 furniture enterprises
From January to October 2008, about 7,000 furniture enterprises were closed, reported China Wood International. Nevertheless, some enterprises made plans to expand, with IKEA planning to open 10 new stores in 2010 and Markorhome increasing its stores from 29 to 40 before 2010. The China Association of Building and Decoration Industry also reported the decorative market was worth RMB680 billion in 2008, and the distribution value of China’s furniture industry fell nearly 30% in 2008 from 2007 levels.