Finnish sawmills: China saved 2015 – promise for the future even greater

China has risen rapidly among the export destinations of the Finnish sawmilling industries. In the future, China will be developed in a direction where constructing with wood is expected to increase considerably.

As an export destination of the Finnish sawmilling industries, China rose to the fourth place. The value of sawmilling exports to China in 2015 was EUR 140 million, which is roughly half of the value of exports to Japan, the largest export destination of the branch.

”It was China that saved us. Though our exports to other countries are in regression, our trade with China is increasing,” said Mr. Kai Merivuori, Executive Director of the Finnish Sawmills Association during its stakeholder meeting in Helsinki last week.

The increase has not come about just by itself. The first efforts in this direction were taken years ago, but satisfactory results only began to emerge with the current export campaign in China, undertaken in cooperation with the Finnish Ministry of Employment and the Economy and the Finnish exports-promoting organisation Finpro.

Ms. Gao Ya, Senior Advisor for the campaign mentioned that, among others, a Chinese manufacturer of wooden doors and a producer of aluminium and wooden window frames – both leaders in their branch in China – have expressed an interest in glue lams.

Construction companies have made inquiries concerning interior claddings and floorings. There is demand for Finnish-style log houses as well as for environmentally friendly wood impregnation chemicals, methods to recycle waste from the impregnation process and expertise on the design of wood products.

Far-reaching reputation

According to Ya, Finns have a good reputation in China, forming a good platform for marketing. The opportunities are substantial, especially due to the new direction of the Chinese economy.

”Our economy grew by two-figure percentages for a long time. Now, however, the country is more or less consciously taking a breather.”

In future, growth is searched for ”in depth,” in Ya’s words. The country has become more prosperous and people want to use their money. This opens up new opportunities for the provision of services.

For the sawmilling industries, this means many interesting fields of growth. One of them is the construction of wooden dwellings.
The average size of dwellings in China is relatively small, and there is a great need for renovation in old houses. ”The share of wood as regards both of these can be high,” says Ya.

Domestic tourism in China is increasing and facilities are needed. ”We will see a lot of new camping sites, and they all want to use wood in construction,” says Ya.

Constructing with wood in China is largely based on imported wood: the volume of domestic loggings is on a par with the imports of wood and sawmilling products. However, work to establish domestic wood production was started in 2000.

As an example, a plantation of 14 million hectares was established in 2013. Relying on sustainable forest management, it will produce close to a hundred million cubic metres of wood in 5–8 years after being set up. Even more plantations have been established outside China, totalling 40 million hectares.

Trade in illegal timber has been taken seriously in China at least since 2007. The official line is clearly against illegal trade, though Ya expressed no opinions on the action taken to combat it. However, all natural forests in China will be protected by 2018.

Furniture: niche market in China is substantial for Finnish producers

China’s urbanization increases the need of furniture, for example. In this respect, Ya mentions three niche markets that are yet enormous from the Finnish viewpoint: custom-made furniture and furniture for children and elderly people.

The share of custom-made furniture of China’s total furniture market is around one tenth, but the demand is growing annually by one third. The number of children born each year is expected to increase by eight million in comparison to previous figures, due to the two-child policy. At the moment, there are some 220 million children below the age of 15 in China.
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