3.4 Sawn Timber

Production

The production of sawn timber in Korea was 1,148 thousand cubic metres in 1970, and the production increased every year. The production of sawn timber peaked at 5,949 thousand cubic metres in 1988, and consumed 8,842 thousand cubic metres of logs. In 1995, the consumption of logs for sawn timber was 4,737 thousand cubic metres, and the production of sawn timber was 3,440 thousand cubic metres. The 1995 production of sawn timber was only 58% of that in 1988.

The share of domestic logs for sawn timber dropped from 12% in 1980 to 6% in 1991, and slightly increased to 9% in 1995. However usually it stays around 10% of total sawn timber production. In domestic sawn timber, the share of softwood has increased. The species composition of imported logs which dominated log sawn timber production has changed: in 1985, tropical hardwood logs were 31.5% of total log imports, but this had dropped to 12% in 1995. Recently imported softwood logs from temperate zone countries have increased.

In 1995, the number of sawmills and employees were 1,402 and 12,592 respectively, much lower than in the past. However, the capacity utilization of sawmills increased from 38% in 1970 to 72% in 1995. Inchon, the entrance port of Seoul, is famous for the sawmills which use imported log. Inchon had the largest number of sawmills - in 1995, Inchon has 144 sawmills, and 3,051 employees, and its sawmill output was 31% of the Korean total.

However, the management of sawmills which use domestic logs as raw material is very inferior because of several reasons. Therefore it is difficult to find sawmill facilities for domestic timber even in the mountainous areas in Korea.

Table 17. Log consumption for sawn timber and production of sawn timber

Classification Unit	1970	1975	1980	1985	1990	1994	1995
Production capacity 1,000 m3	4,650	6,392	7,936	7,704	7,507	8,089	6,549
Log consumption 1,000 m3 Imported logs Softwood Hardwood Domestic logs Softwood Hardwood	1,773 - - - - - -	3,189 - - - - - -	4,211 3,724 - - 487 - -	4,152 3,507 2,201 1,306 645 499 146	5,360 4,756 3,466 1,290 604 512 92	6,170 5,799 4,505 1,294 371 292 79	4,737 4,334 3,826 508 403 372 31
Production of sawn timber 1,000 m3	1,148	2,241	2,977	2,952	3,897	4,041	3,440
Capacity utilization % No. of sawmills factory No. of employees people	38 1,912 -	50 1,977 -	53 2,019 -	54 1,956 15,650	71 1,659 20,022	76 1,477 14,476	72 1,402 12,592

Source: Forestry Administration

Consumption

In Korea, sawn timber is mainly consumed for construction and engineering work. About 73% of sawn timber is used in construction and engineering. The construction and engineering companies order the sawn timber for their needs and their favourite sizes. The 73% of domestic logs and 83% of Hemlock imported from North America is produced by special order.

In future, the consumption of sawntimber will be changed depending the construction and engineering work in domestic, and packing for the export goods. A lot of substitute will be developed according to the sawntimber price increase. Therefore the consumption demand for sawn timber will increase slightly as follows; 4,692 thousand in 2010, 4,972 thousand in 2020, and 5,059 thousand in 2030.

Table 18. The share of sawn timber by use

Total	Construction and Engineering	Packing	Agricultural Equipment	Other
100.0%	73.2%	10.2%	1.7%	14.9%

Source: Forestry Research Institute

Imports

The share of imported sawn timber has rapidly increased from 44 thousand cubic metres in 1980 to 1,279 thousand cubic metres in 1993. In 1995, it recorded 1,016 thousand cubic metres. The rapid increase in imports of sawn timber caused the slump of domestic sawmill industry. Recently some Korean sawmills employ foreigners from other Asian countries because of shortage of Korean workers and their high labour costs. The import of sawn timber is expected to increase rapidly. Usually sawn timber has been imported from Malaysia, USA.

Table 19. Imports of sawn timber

Classification	Unit	1980	1985	1990	1995
Quantity Value	1,000 m3 1,000$	44 7,535	169 29,179	691 166,661	1,016 408,530

Source: Forestry Administration

Exports

Korea exports a very limited quantity of sawn timber. Sawn timber exports were only 3 thousand cubic metres in 1970, increased slowly and peaked at 376 thousand cubic metres ($82.262 million) in 1980. After that it decreased rapidly, and in 1995, of the total production of 3,440 thousand cubic metres, the export is only 14 thousand cubic metres in 1995.

Table 20. Trend of sawn timber exports (Unit: 1,000 m³)

1970	1975	1980	1985	1990	1994	1995
3	183	376	161	161	37	14

Source: Forestry Research Institute

3.5 Woodpulp

Production

Korea produces 3 kinds of pulp; chemical, mechanical and chemi-mechanical pulp. The number of pulp factories is 5, among them 1 chemical, 3 mechanical, 1 chemi-mechanical factory. The production capacity of domestic woodpulp increased from 525 thousand M/T in 1988 to 849 thousand M/T in 1993 following the expansion of production capacity by Donghae Co. Ltd. and Hansol Forem Co. Ltd. Chemical pulp increased from 161 thousand M/T to 385 thousand M/T, and chemi-mechanical pulp from 237 thousand M/T to 337 thousand M/T in 1993. There is no production change in mechanical pulp.

Table 21. Change of production capacity of pulp industry (Unit: 1,000 M/T)

Company	Classification	1988	1989	1990	1991	1992	1993	1994
Company A Company B Company C Company D Company E	Chemical Mechanical Mechanical Che.Mecha Mechanical	161 83 32 237 12	161 83 32 237 12	161 83 32 237 12	161 83 32 237 12	161 83 32 237 12	385 83 32 337 12	385 83 32 337 12
Total (5 Companies)		525	525	525	525	525	849	849

Source: Korea Paper Industry Association

The capacity utilization of pulp mills is about 60%. The self-sufficiency of pulp is 23% and the rest was imported in 1995. The production of woodpulp in Korea depend on mechanical pulp before the mid 1980s, but after that, the production of chemical pulp increased, and the share of chemical pulp is higher than that for mechanical pulp. From 1975 to 1995, chemical pulp has increased from 7 thousand M/T to 319 thousand M/T, but the mechanical pulp increased from 87 thousand M/T to 181 M/T.

Table 22. Production of pulp in Korea (Unit: 1,000 M/T)

Classification	1975	1980	1985	1990	1995
Total Chemical Mechanical Ratio of self sufficiency (%)	94 7 87 29	167 29 137 28	267 129 138 32	301 142 159 21	501 319 181 23

Source: Korea Paper Industry Association

The raw material for mechanical pulp was mainly domestic pine logs in the past, however recently the mechanical pulp factory changed the purchase pattern from logs to softwood chips. Also chemical pulp company imported woodchips as the raw material. Therefore the imported amount of chemical pulp increased rapidly.

Table 23. Change of raw material for pulp (Unit: 1,000 m³)

Classification	1988	1989	1990	1991	1992	1993	1994
Total % Mechanical pulp Subtotal Domestic pine Imported pine Chemical Pulp Subtotal Domestic hardwood Domestic softwood Imported timber	687 98.1 252 252 - 453 236 143 56	664 79.9 230 230 - 433 187 113 133	641 79.9 203 203 - 438 204 105 129	682 67.9 256 201 55 426 192 70 164	681 65.3 257 245 12 424 141 59 224	1,066 37.7 245 245 - 821 132 25 664	1,220 35.5 284 284 - 936 149 - 787

Source: Forestry Administration

Consumption

Pulp is usually used for the paper production; the consumption of pulp increased 24 times from 92 thousand M/T in 1965 to 2,170 thousand M/T in 1994, and the consumption of waste paper also increased 182 times from 46 thousand M/T in 1965 to 4,704 thousand M/T in 1994. In the early 1970s, the share of pulp for paper production was greater than that of waste paper but after that, waste paper has become more popular than pulp as raw material to produce the pulp.

The share of pulp in raw material for paper production is about 35% in 1994. The share of the domestic pulp among the pulp supply has also decreased compared to the past; it occupied a quarter of the whole pulp supply.

Table 24. Trend of demand and supply for raw material to produce the paper (Unit: 1,000 M/T)

Classification	1965	1970	1975	1980	1985	1990	1991	1992	1993	1994
Total Domestic Imported	138 72 66	368 182 186	714 303 411	1,69 2 749 943	2,35 3 1,08 5 1,26 8	4,79 9 2,17 6 2,62 3	5,184 2,418 2,766	5,70 0 2,63 6 3,06 4	6,16 6 3,15 0 3,01 5	6,87 4 3,82 6 3,04 8
Pulp Domestic Imported	92 33 59	239 80 159	325 94 231	620 167 453	835 268 567	1,45 7 301 1,15 6	1,540 324 1,216	1,76 7 311 1,45 6	1,92 3 449 1,47 4	2,17 0 521 1,64 9
Waste Paper Domestic Imported	46 39 7	129 102 27	389 209 180	1,07 2 582 490	1,51 8 817 701	3,34 2 1,87 5 1,46 7	3,644 2,094 1,550	3,93 3 2,32 5 1,60 8	4,24 3 2,70 1 1,54 2	4,70 4 3,30 5 1,39 9
Share of Pulp (%)	66.7	64. 9	45. 5	36.6	35.5	30.4	29.7	31.0	31.2	31.6
Production of Paper	120	330	662	1,68 0	2,31 2	4,52 4	4,922	5,53 1	5,84 0	6,43 5

Source: Forestry Administration

Table 25. Scenario of demand forecasting for Korea woodpulp (Unit: 1,000 M/T)

Year	2000	2010	2020	2030	Assumption
Woodpulp Economic growth ratio assumption (%)	1,955 6.90	2,128 4.27	2,259 4.00	2,286 .50	annual pulp price increase is 0.14%

Source: Korea Rural Economic Institute

Imports and Exports

The pulp import increased nearly 3 times from 1985 to 1994 because of the shortage of domestic pulp production. In 1994 it occupied about 70% of the whole pulp consumption in Korea, and it totalled 1,649 thousand M/T. There is no pulp export from Korea.