Timber products industries had been one of the main exporting industries in Korea, and plywood and sawnwood industries led exports from the late of 1960s to the early of 1980s. At the same time, they played a leading role in national economic development by offering stable supply of construction and housing materials. From the 1980s, Korean timber industries have suffered from declining competitiveness both domestically and abroad which resulted from restriction of log exports by tropical countries, increased prices of imported logs and of domestic labour cost, and development of substitutes for timber.
To protect and develop the timber industries, the government is reviewing various countermeasures: development of the techniques for improving international competitiveness, improvement of quality, financial support of factory automation facilities, and assistance of the stable supply of raw materials.
.
Even though the forest area occupies 65% of the whole land, the productivity of forest in Korea is very low because of the high share of the young premature stands but also especially due to the low harvest volume limits set by Government; the whole cutting volume permitted is usually about 11% of annual increasement.
Table 10. Trend of forest resources and harvest volume (Unit: 1,000 m3)
Year |
Growing volume (A) |
Harvesting volume (B) |
Ratio (B/A) (%) |
1980 1982 1984 1986 1988 1990 1992 1994 Average |
5,855 6,608 7,434 7,870 7,610 8,871 11,442 13,020 9,839 |
1,244 1,205 1,029 1,105 1,194 1,077 796 896 1,068 |
21 18 14 14 7 12 7 7 11 |
Source: Forestry Administration
Table 11. Permit of annual tree cutting by Forestry Administration
Classification |
Unit |
1980 |
1985 |
1990 |
1995 | |
Total Final cutting Thinning area volume Regeneration cutting of inferior stand Other |
Area Volume Area Volume Area Volume Area Volume Area Volume |
1,000 ha 1,000 m3 1,000 ha 1,000 m3 1,000 ha 1,000 m3 1,000 ha 1,000 m3 1,000 ha 1,000 m3 |
100 1,244 - - - - - - - - |
85 1,067 59 931 26 135 - - - - |
72 1,077 12 309 29 191 9 137 22 439 |
56 887 5 176 30 205 6 124 15 382 |
Source: Forestry Administration
Of the annual harvesting volume, the final cutting contributes 20-30%, and the inferior and pest and insect damaged tree cutting is more than 50%. Additionally the quality of cutting timber is also inferior. The harvesting cost in Korea is increased because of high labour and the transportation cost. Meanwhile, the log price in forest has continuously dropped, and this is the main cause of difficulties of forest management. The log price in forest stands is about 20% of market timber price in Korea.
The cutting area is also reduced. In 1995, the total cutting area was 56 thousand ha, and of this, the final cutting area was only 4,738 ha, and the thinning area 29,978 ha. This is because of the premature forests in young stages.
Production
Annual domestic log production remains around 1 million cubic metres. Currently domestic timber is mainly low-grade and small-dia metres softwood which is generally unsuitable for sawn timber production. The majority of domestic timber is used for pitprops and pulpwood. The share of domestic log production is around 15% of Korea's log consumption, and it's production capacity in Korea is very limited because of young and premature forest stand in near future.
Consumption
In 1965, the log consumption in Korea is only 1.3 million cubic metres, of which domestic supply is 0.5 million cubic metres, and the import supply is 0.75 million cubic metres. However from the late of 1960s, the plywood industry developed and consumed a lot of tropical hardwood log imported from Asian countries.
In the 1970's, Korea was one of the largest plywood producers in the world and its forest products market was dominated by imports of tropical hardwood logs which were manufactured into plywood. During the 1970s, more than 70% of imported logs were used for plywood production, and more than 70% of plywood produced in Korea was also exported annually. In 1970s, the export demand share of log in Korea is about 60% in total demand. But the plywood industry faced with the management difficulty in 1980s, and log consumption for plywood declined slowly.
However the total log consumption has increased annually due to higher domestic log demand for the general purpose logs. In 1995, the total log consumption in Korea was about 9,284 thousand cubic metres of which the logs for domestic use was nearly 96%. In 1995, the plywood industry processed 18% of the Korea's total log consumption and plywood exports accounted for only 11% of total plywood production. The share of plywood for export was 4% of the total plywood production in Korea, and the 96% was used for domestic use in 1995.
The total log consumption declined in the early 1980s. During this period, there was significant rationalization of both the plywood and sawmilling industries in Korea.
Table 12. Trend of log demand and supply (Unit: 1,000 m3)
Year |
Demand Total Domestic Export |
Supply Total Domestic Import | ||||
1965 1970 1975 1980 1985 1990 1995 |
1,259 4,000 6,465 7,750 7,321 9,423 9,284 |
748 1,713 2,889 5,785 6,792 9,121 8,939 |
511 2,287 3,576 1,965 529 302 345 |
1,259 4,000 6,465 7,750 7,321 9,423 9,284 |
503 845 896 1,008 1,188 1,138 1,055 |
756 3,155 5,119 6,141 5,578 8,285 8,229 |
Source: Forestry Administration
Imports
Imports dominate log supply in Korea: in 1975, about 70% of imported logs were processed into plywood, and the remainder were used for general use such as sawn timber and other use. Recently the share of plywood log in total imported logs is only 20%, and the share of general use log has increased to 80% in 1995 from 30% in 1975. Because of the difficulty and high price of tropical hardwood species, only 397 thousand cubic metres of Lauan was imported in 1995; this is 1/3 of the amount of peak time in 1980s. The imported value of Lauan is also only $20 million.
Table 13. Timber import by type of log
Classification |
Unit |
1975 |
1980 |
1985 |
1990 |
1995 |
Total Quantity Value Plywood log Quantity Value General use log Quantity Value Lauan Quantity Value Others Quantity Value |
1,000 m3 mill.$ 1,000 m3 mill.$ 1,000 m3 mill.$ 1,000 m3 mill.$ 1,000 m3 mill.$ |
5,119 269 3,576 179 1,543 90 913 49 630 41 |
6,141 858 3,328 474 2,813 384 986 180 1,827 204 |
5,578 479 2,028 172 3,550 307 1,133 102 2,417 205 |
8,285 990 2,321 274 5,964 716 1,086 137 4,878 579 |
8,229 1,047 1,683 261 6,546 786 397 20 6,149 766 |
Source: Forestry Administration
Note: Figure of plywood log are estimated from plywood production
The major country of origin for log imports used to be the Philippines in the 1960s, and changed to Malaysia and Indonesia in 1970s. After 1980, it is changed to Malaysia and Papua New Guinea. From 1970s to 1990s, the majority of softwood is imported from USA. However from early 1990s, recently imports from New Zealand increased. The share of conifers in total log import has increased very rapidly and it is expected to continue in future.
In 1995, Korea imported the log from PNG (997 thousand, $155 million), Malaysia (656 thousand, $134 million) for tropical timber, and New Zealand (3.00 mil., $296 million), Chile (1.538 million, $158 million), USA (803 thousand, $179 million) for conifer.
Table 14. Trend of Korea log imports by source (Unit: 1,000 m3 - 1,000$)
Species |
1960 |
1970 |
1975 |
1980 |
1985 |
1990 |
1995 | |
Hardwood Philippines Malaysia PNG Indonesia Others*
USA New Zealand Others** |
Quantity Value Quantity Value Quantity Quantity Quantity Quantity Quantity Value Quantity |
712 24 222 48 - - 44 2 18 20 6 |
2,852 113 888 1,487 - 477 303 13 236 56 11 |
4,661 236 264 1,628 - 2,769 458 33 448 - 10 |
4,486 661 82 2,474 133 1,817 1,655 198 1,043 185 427 |
3,228 281 67 2,308 841 12 2,350 198 1,494 99 757 |
3,483 418 - 2,912 571 - 4,550 543 2,971 1,290 541 |
1,656 289 - 656 997 3 6,573 758 803 3,003 2,769 |
Total |
Quantity Value |
756 26 |
3,155 125 |
5,119 269 |
6,141 858 |
5,778 479 |
8,285 990 |
8,229 1,047 |
Source: Custom Tax Administration
Note: Others* is mainly softwood, and Others** is hardwood from other country except Philippines, Malaysia, PNG and Indonesia and softwood from other countries except USA, N.Z.
The forecasting for log demand in 2010 in Korea is estimated to about 19.5 million cubic metres, and among them domestic supply will be 3.1 million cubic metres, and its share of total supply also increased to about 15.9% from 12.0% in 1990.
Therefore up to 2010, Korea should import the around 16 million cubic metres from overseas, and mainly will be imported for the domestic demand in Korea. The major log import sources will be New Zealand, Chile, USA and tropical countries. The softwood import will be increased, and the hardwood may continue the current trend or decrease the import amount in future.
Table 15. The scenario of demand and supply for log in Korea (Unit: 1,000 m3)
Classification |
2000 |
2010 |
2020 |
2030 |
Assumption |
Demand Domestic supply Sufficiency ratio (%) Log import Economic growth ratio assumption (%) |
15,257 1,550 10.2 13,707 6.90 |
19,499 3,105 15.9 16,394 4.27 |
24,361 5,339 21.9 19,022 4.00 |
29,178 8,842 30.3 20,336 3.50 |
annual log price increase is 0.07% |
Source: Korea Rural Economic Institute
Exports
There is no log export from Korea up to now, and also no plan to export logs in the period before 2010.
Production and consumption
The total consumption of woodchips in Korea was 3,058 thousand cubic metres in 1995. The production of woodchips in Korea is mainly for pulp and board manufacture, and among the woodchips for pulp, most is for chemical pulp. In 1995, of the total of 1,039 cubic metres for pulp, 968 cubic metres was used for chemical pulp.
Imports
Imports of woodchips increased rapidly. They were 1,181 thousand cubic metres in 1995 (equal to about 656 thousand M/T).
Table 16. Trend of demand and supply of woodchips in Korea (Unit: 1,000m3)
Classification |
1991 |
1992 |
1993 |
1994 |
1995 | |
Total Consumption |
1,098 |
1,431 |
2,088 |
2,411 |
3,058 | |
Demand in Domestic Import |
for Pulp for Board |
427 671 169 (94) |
435 996 385 (214) |
879 1,209 963 (535) |
1,002 1,409 1,134 (630) |
1,039 2,019 1,181 (656) |
Source: Authors
Note: The unit of ( ) is 1,000 M/T.
Total Consumption minus import is the production amount of woodchip in Korea.
