PLYWOOD MARKET ANALYSIS

Plywood Market Size and Trends

The plywood market is estimated to be valued at USD 61.47 Bn in 2024 and is expected to reach USD 95.53 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 6.5% from 2024 to 2031.

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The market has been witnessing consistent growth over the past few years owing to rising applications in the construction, packaging, and furniture industries.

Market Driver - Growth in construction industry

The construction industry has been growing rapidly over the past few years and this growth has significantly contributed to the rising demand for plywood. As the number of new residential and commercial construction projects increases, there is a parallel rise in the consumption of wood-based materials like plywood. It is widely used in flooring, roofing, furniture making, and other applications in buildings. Whether it is a small housing project or a large commercial complex, plywood remains one of the most versatile and cost-effective wood panel products.

Driven by the rising population, rapid urbanization and increasing income levels, there is constant pressure on real estate developers to build new residential units in cities and towns. This has created a huge housing requirement across both developing and developed nations. At the same time, the commercial real estate sector is also expanding steadily with growing demand for retail space, office space, warehouses and other constructions. All these new residential and non-residential building activities have translated to higher volumes of plywood sales. Its adoption is further bolstered by the material advantages of plywood like strength, durability and stability compared to other substitutes.

The growth momentum is visible even in the public infrastructure segment like hospitals, schools, transport hubs and government buildings. Many countries are undertaking large construction of operational facilities to cater to the needs of a rising population. For example, in the education sector, both construction of new school buildings as well as renovation and expansion of existing institutions is driving plywood demand. Similarly, the healthcare infrastructure is witnessing a massive revamp across both rural and urban regions. All such public infrastructure projects incorporate significant usage of engineered wood products like plywood for floors, walls, roofs and other applications requiring strength.

Market Concentration and Competitive Landscape

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Rise in infrastructure development projects

Infrastructure development has become a top priority for governments worldwide in recent years. There is a concentrated effort towards modernizing roads and highways network, upgrading rail transport, expanding airports, and building new ports. All such large infrastructure schemes involve phase-wise construction activities lasting several years. This sustained rise in infrastructure spending creates multi-year opportunities for wood panel producers catering to these project requirements.

Whether it is massive road expansion plans across countries like India, China, and the U.S. or new high-speed rail corridors coming up globally, plywood finds extensive usage in construction of bridges, tunnels and other civil works. Its rigidity, nail-holding capacity and resistance to pressure make it suitable for making shuttering plates and shuttering panels used in casting of concrete and highways construction. Similarly, in the expansion and modernization of airports and ports, engineered wood flooring and wall panelling made of plywood plays a major role.

Urban infrastructures like metro railway networks and bus rapid transit systems are also seeing significant investments to enhance the mobility and transport facilities in cities. Massive projects underway in Asian and African cities depend on quality plywood sheets in the construction of stations, terminals, overhead tracks, and platforms. Even in rural areas, infrastructure like schools, hospitals, warehouses and government offices incorporate versatile plywood board usage. Multi-year infrastructure development missions launched by nations fuel sustained growth opportunity for plywood producers, fabricators and suppliers in meeting such large-scale construction requirements.

Key Takeaways from Analyst:

The construction industry remains the major driver of demand for plywood worldwide. Rising residential and commercial construction activities in emerging economies will boost the consumption of plywood for applications such as concrete formwork, wall, and flooring. Rapid urbanization coupled with growing housing needs of expanding populations in Asia Pacific and Latin America will contribute to the usage of plywood. Furthermore, increasing renovations and remodelling expenditures in North America and Europe are projected to support market expansion.

However, stringent environmental regulations pertaining to deforestation may act as a restraint. Growing preference of engineered wood over conventional wood products among builders and contractors also poses a challenge. Nevertheless, the market players could gain new opportunities by developing innovative product ranges made from sustainable wood sources or agricultural residues. Innovation in adhesive technologies for producing weather-resistant plywood is another area that needs attention.

The North America region, currently dominates the global plywood market and the trend is likely to continue in the near future. This can be attributed to ongoing government investments in public infrastructure and individual home ownership. Asia Pacific is anticipated to maintain its position as the second largest market, while steady recovery in construction activities makes Europe an important regional market.

Challenges: Volatility in wood prices

As a material heavily dependent on wood as its primary raw material, the plywood market faces significant challenges due to volatility in wood prices. Being an agricultural commodity, the price of wood fluctuates extensively depending on various macroeconomic and environmental factors beyond the control of plywood manufacturers. Changes in global trade policies, economic growth rates of major importing countries, and natural calamities like storms, wildfires etc that impact forestry also contribute to fluctuating wood costs. This uncertainty in input prices makes it difficult for plywood companies to undertake long term business and capacity expansion plans. It also hampers their ability to price products competitively and sign long term contracts with customers. Volatile wood costs squeeze profit margins of plywood manufacturers especially during times of declining wood prices after a period of high costs. The challenge of stabilizing raw material prices and hedging against their fluctuations is a significant issue faced by the plywood market.

Opportunities: Innovation of engineered wood products

The innovation and development of engineered wood products presents a major opportunity for the plywood market to grow. Engineered wood involves combining wood fibers, veneers or lumber along with adhesives to manufacture composite wood products with improved performance characteristics compared to natural wood. Products like cross-laminated timber, laminated veneer lumber and glue-laminated timber are gaining popularity for applications in construction which previously used steel, concrete or traditional wood. Their properties allow construction of larger structures with higher load bearing capacity in less time. They also have advantages like consistency, dimensional stability and protection from warping, cracking and rotting. The plywood market can leverage new technologies to manufacture such innovative engineered wood products and address rising demand from commercial and infrastructure construction sectors. This helps open up new market segments and ensures sustainable long term growth prospects.

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Insights by product type: Wide applicability and cost-effectiveness

In terms of product type, softwood plywood is expected to contribute 44.6% share of the market in 2024. Softwood plywood holds the largest share in the global plywood market due to its extensive usage in construction applications. Softwood trees such as pine, spruce and fir are most commonly used for producing plywood as they have straight grains and are more uniformly arranged compared to hardwood trees, making them ideal for construction purposes. Softwood plywood sheets are reasonably priced, lightweight and offer sufficient strength and rigidity for use as concrete formwork, flooring substrates, and roof sheathing. They can withstand environmental stresses like moisture and commonly used in load-bearing structures like walls and floors.

Moreover, softwood plywood bonds well during the hot-pressing process as the softwood layers sustain high compressive loads. This results in a final product with uniform fiber alignment and less voids, rendering it waterproof and durable. Softwood plywood also takes paint, stains and varnishes smoothly for decorative interiors. Several softwood tree varieties are widely cultivated, ensuring consistent supply of raw materials. Together, the optimal mechanical properties, cost-effectiveness, wide availability and high functionality relative to price have made softwood plywood the material of choice for basic construction needs over other substitutes.

Insights by application: Extensive end-use applications

Construction is expected to contribute 49.4% share of the global plywood market in 2024. The construction industry dominated the global plywood market in terms of consumption. Plywood finds multifaceted applications in construction such as concrete formwork, flooring, roof sheathing, wall panels, and modular construction among others. It serves as an economical substrate material for flooring installations in commercial, industrial, and residential projects. Plywood also acts as an air and vapour barrier in roof constructions and resists wind uplift, saving on additional supporting structures.

As a light yet strong alternative to solid wood, plywood finds increased preference for floor panel systems in wood-framed buildings. Its dimensional stability and screw-holding capacity help rapid assembly and disassembly of temporary structures at construction sites. Engineered wood composites like LVL and I-Beams utilize plywood in their manufacture. Modular construction of prefab units extensively employs plywood in wall, floor and roof panel assemblies. Rapid urbanization and infrastructural projects in emerging nations are expected to drive the consumption of plywood in construction applications going forward.

Regional Insights

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For a long time, North America has dominated the world market for plywood. In 2024, the region is projected to hold a 40.5% share. The demand for plywood has remained strong in the area due to the high levels of building spending in the residential and non-residential sectors of the American economy. The United States has a significant portion of the North American plywood industry due to its sizable housing market and concentration of top building material producers. The market gains from the region's strong technological capabilities and skill in producing large quantities of high-quality goods. Additionally, having access to a plentiful supply of raw materials gives North American producers a significant competitive edge over players from other countries. However, given growing import plywood prices, the area confronts fierce competition from emerging markets.

The Asia Pacific region has emerged as the fastest growing market for plywood globally in recent times on the back of rapid urbanization and infrastructure development across developing nations. Countries like China and India serve as major growth engines for the region's construction industry with their huge population base and strong GDP growth rates. Rapid expansion of the real estate sector combined with government initiatives to boost housing and commercial building construction have considerably driven plywood consumption in Asia Pacific. In addition, many nations have established vibrant wood-based panel manufacturing capacities to not only meet rising domestic needs but also to leverage export opportunities. For instance, export-oriented industries in Malaysia and Indonesia have established Asia Pacific as the largest exporter of tropical hardwood plywood globally. Their strategic location also provides the region competitive advantage in international trade. The region’s rising demand, manufacturing strength and trade competitiveness point towards continued dominance in the coming years.

Market Report Scope

Plywood Industry News

• In May 2024, Century Plyboards (India) launched a new product line called Century Cubicles, as part of its strategic investment plan to expand and diversify its plywood product portfolio
• In February 2024, Kajaria Plywood launched the "Magnificent 7" social media campaign to promote its plywood products and engage with its target audience through various digital platforms
• In 2023, DUROPLY launched Techply, India’s first ready-to-use plywood and board product. This innovative offering aims to streamline the construction and interior design processes, providing a convenient solution for consumers and professionals alike.
• In 2023, Greenply collaborated with renowned actor Jr. NTR to launch a new campaign promoting their zero-emission product range. This partnership aims to highlight Greenply's commitment to sustainability and eco-friendly practices in the plywood industry, while leveraging Jr. NTR's influence to reach a broader audience.
• In 2022, Gupta Plywood from Telangana, India launched "Speckwud," India's first 15-layer calibrated plywood brand. This innovative product aims to set new standards in quality and durability within the plywood market, catering to the diverse needs of consumers and builders alike

*Definition: The plywood market involves the production and sale of plywood. Plywood is a type of engineered wood made by gluing layers of thin wood veneers together with their grains rotated for added strength. It is widely used in construction for applications like flooring, roof decking, sheathing, and furniture. The plywood market serves various end-use industries including construction, packaging, and shipping.

Market Segmentation

•  Product Type Insights (Revenue, USD, 2019 - 2031)
  • Softwood Plywood
  • Hardwood Plywood
  • Engineered Plywood
•  Application Insights (Revenue, USD, 2019 - 2031)
  • Construction
  • Furniture Manufacturing
  • Packaging
  • Automotive
  • Others
• Regional Insights (Revenue, USD, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • Century Plyboard (India) Ltd
  • Atlantic Plywood Corporation
  • Greenply Industries Ltd.
  • Weyerhaeuser Company
  • Eksons Corp. Bhd.
  • Roseburg Forest Products Co.
  • Uniply Industries Ltd.
  • Boise Cascade LLC
  • Ainsworth Lumber Co. Ltd.
  • Georgia-Pacific Corporation
  • Austal plywoods private limited
  • Eksons corporation berhad
  • Latvijas fineries AS
  • Metas wood
  • Potlatch Deltic corporation
  • SVEZA forest
  • UPM Kymmene Oyj
  • Weyerhaeuser company limited