Commodity reports - Plywood

Production
Trade

For many decades after the establishment of the first plywood-producing plants about the middle of the last century, the plywood industry was almost an "offshoot of lumbering," but it has recently grown to be an important and independent branch of the woodworking industry.

Plywood consists of sheets of wood material made up from three or more layers of veneer glued or cemented together, the grains of adjoining plies usually being at right angles to one another. Laminboard, blockboard, and batten board are sometimes included as plywoods.

New uses for plywood are continually being found in construction, joinery, millwork; in manufacture of airplanes, small boats, ears, etc.; and in innumerable other fields. The merits of plywood have been greatly increased by new achievements in glueing (e.g., use of synthetic resins, electronic short-wave heating); by the development of techniques for bending and molding plywood; and by the use of special new wood and paper products, metals, and plastics for surfacing of plywood. These methods have made it possible to produce, at a comparatively low cost, plywood which is waterproof, strong, durable, and resistant to temperature extremes and abrasions. Inasmuch as the field for plywood is almost incessantly widening, the supply does not equal demand.

Production

Before the second world war, the world output of plywood was estimated at 2 million m³ per annum, nearly 40 percent of which was produced by the United States of America. Europe produced approximately 90 percent of its own requirements.

The prewar volume in plywood production was exceeded in 1945 and surpassed by a large margin in 1946. For countries reporting to FAO, listed in Table 1, 1947 plywood production of 2.9 million m³ was 18 percent more than in 1946. The United States, Canada, Finland, and Japan were responsible for 74 percent of total production.

Complete figures on plywood production in 1948 are not yet available; those reported so far indicate that production was in excess of 3 million m³.

Europe

The war had severe effects upon the European plywood industry. The plywood market was disorganized. Some plants were damaged, and others were made idle by shortages of raw material, fuel, and glue. In some countries, where the plywood factories could be kept running, production was standardized primarily for the manufacture of prefabricated houses.

TABLE 1. - WORLD PLYWOOD OUTPUT

Country		Prewar Level	1945	1946	1947	1948
		Thousand cubic meters
Europe
	Czechoslovakia	...	...	27	51	...
	Finland	225	90	140	192	210
	France	90	24	44	67	86
	Germany: Bizone	...	...	75	71	106
	Italy	10	...	25	55	55
	Netherlands	5	...	...	33	32
	Poland	2	8	18	32
	Sweden	29	31	33	30	35
	Switzerland	-	12	12	21	11
	United Kingdom	4	44	40	38	34
Near East and North Africa		...	...	10	10	10
North America
	Canada	...	200	192	235	294
	United States	750	²1,081	²1,275	²1,505	²1,740
Latin America
Brazil		...	³87	³110	³90	...
Africa		...	...	10	10	10
South and East Asia
	India	...	...	12	...	...
	Pakistan	...	...	4116	...	...
	Japan	290	34	152	190	...
Oceania
	Australia	35	...	48	49	64
	New Zealand	...	9	10	10	11
ESTIMATED TOTAL		2,000	1,950	2,420	2,850	3,200

... Not available.
- None or very small.
¹ Preliminary figures.
² Only data for production of softwood plywood; figures for hardwood plywood are not available. United States production of hardwood plywood totaled 550,000 m³ in 1944.
³ Does not include plywood consumed in the manufacture of furniture,
⁴ Year 1946/1947.

Since the end of hostilities, European plywood production has been rapidly recovering. This has been the case in Finland especially. In spite of the loss, by peace treaty with the U.S.S.R., of four mills with a production potentiality of about 45,000 m³ of plywood per annum, and in spite of the need to modernize mill equipment, Finland still holds first place among European suppliers. Italy and Czechoslovakia have been able to increase ply-wood production. In France the plywood industry suffered during the war from curtailed supplies of okoumé logs from Africa, but production is recovering and has almost reached its pre war level. In the group of traditional European ply wood suppliers, Bizone Germany and Poland have been able to raise their production to considerable volumes.

The gap between supply and demand, evident during and after the war, has stimulated various countries, which formerly had comparatively small or no production facilities, to establish new plywood plants. Among these, Switzerland and the United Kingdom have shown the most striking increases in plywood manufacture.

Owing to the relatively high prices of imported logs from which they produce most of their plywood, the United Kingdom and the Netherlands are now exploring the possibilities of supplying their plants with indigenous species. The plywood industry of most of the western European countries has relied chiefly upon imports of raw materials, and large-scale production of domestic softwood plywood cannot be appreciably expanded.

U.S.S.R.

The plywood industry in the U.S.S.R., located chiefly in the western and northeastern areas of the Russian Soviet Federated Socialist Republic and in the Byelorussian Soviet Socialist Republic, is reported to have suffered heavily from war and occupation. The Baltic republics exported considerable quantities before the war, but their plywood production is now absorbed by the U.S.S.R. No data are available on plywood production in the U.S.S.R.; however, it is known that the current five-year plan provides for an increase of veneer output, calculated to reach a volume of 810,000 m³ in 1950, an 11 percent increase over the 1940 level.

North America

In contrast to what happened in Europe, the last decade was a period of real expansion for the plywood industry in North America, notably in the United States. The Canadian and United States plywood industries had to satisfy not only the unprecedented demands of domestic construction and industry but also a large part of the heavy overseas requirements.

In the United States, Douglas fir plywood production rose from 130,000 m³ in 1925 to 880,000 m³ in 1939 and to 1,500,000 m³ in 1942. Having undergone a period of diminished output under wartime conditions, this industry, which comprised 42 factories in 1948, has achieved a 70 percent increase of production since the end of the war.

There are in the United States over 600 hardwood veneer plants varying in size and widely dispersed throughout the eastern region of the country. The hardwood plywood output in 1944 totaled 550,000 m³ and was estimated in 1948 at 5.1 million m² (55 million sq. ft.).

Latin America

In general, plywood manufacture in Central and South America is, as yet, comparatively little developed. Some Latin-American countries have plywood industries which produce considerable material for local consumption and, to some extent, for export as well. In most cases, cold press methods with casein glue are used, but recently some modern plants have come into operation and others are about to be installed.

In Brazil where the first plywood factory was built in 1928, there are at present 280 veneer and plywood plants. However, only 40 plywood plants, 29 veneer plants, and 61 mills manufacturing both veneer and plywood are in current operation, and not more than 30 or 40 among them can be regarded as modern. The major part of this industry is situated in the State of Paraná. The total capacity of the plywood plants is estimated at about 125,000 m³ per year. Ninety percent of Brazilian plywood is made from Paraná pine, but there are large possibilities, both actual and potential, of using a variety of other species as raw material. The quality of Brazilian plywood can be expected to improve shortly, as a result of the recent completion of a modern glue factory which is claimed to have sufficient capacity to satisfy, with synthetic adhesives, all the glue requirements of the country's plywood industry.

The production capacity of the plywood industry in Argentina (with some 12 to 14 mills), Chile (4 mills), Bolivia (1 plant), Paraguay (1 plant), Venezuela, and Mexico (3 plants) is not available.

A modern plywood mill has been put into operation recently in Surinam. Its production, based on Virola surinamensis (baboen or banak), will be chiefly exported.

Near East

During the past few years plywood production in Turkey amounted to about 7,000 m³ per annum. Turkey is the only Near Eastern country which has made a real start in plywood manufacturing although Egypt and some other countries may produce small quantities.

Oceania

In this region the development of the plywood industry has been hampered by the decline in stands of hoop pine, which used to be the main raw material. However, eucalyptus and other hardwood species have been taken into use.

Before the war, there were 23 plywood mills in Australia with an annual output of 12 million m² (129 million sq. ft.). Australian plywood production, which increased after the war to a peak volume of 49,000 m³ in 1947, declined somewhat in 1948.

New Zealand has been gradually expanding her young plywood industry, and production attained a volume of 11,000 m³ in 1948.

South and East Asia

In India and Pakistan, where the requirements of plywood for tea chests alone amount to as much as 7.5 million m² (80 million sq. ft.) annually, the plywood industry was greatly increased during the war. Since then, the output of plywood has dropped considerably as a number of plants were adversely affected by foreign imports and had to close. At present there are about 80 factories in India and Pakistan. It is estimated that under proper management the plants can produce over 9 million m² (97 million sq. ft.). The output is impaired, however, by insufficiency of casein production and lack of skilled technicians.

In Ceylon there is a government-owned plywood factory which produces 370,000 m² (4 million sq. ft.) of tea chest plywood, and one modern privately owned mill with an annual capacity of 46,000 m² (500,000 sq. ft.) of plywood.

Before the war, Japan was a considerable supplier of plywood for the world market. Since of hostilities the Japanese plywood industry has been gradually recovering; production amounted to 190,000 m³ in 1947. There are at present some 200 plywood factories in operation.

Korea had three active plywood mills in 1947, with an annual capacity of nearly 420,000 m². Malaya a timber exporting country, started plywood production in 1948 with one modern plywood mill producing tea chests and wall panels. Indochina has one veneer and plywood factory in operation.

Africa

The plywood industry of the Union of South Africa, consisting of two factories which were established in the 1920's, has been dependent on imported veneer logs, such as okoumé from French West Africa and kiaat from the Belgian Congo. The yearly production amounts to about 1.3 million m² (14 million sq. ft.).

During the past few years there has been a strong tendency to develop veneer cutting and plywood manufacturing capacity in tropical territories where different kinds of hardwoods are available.

An interesting postwar development is the establishment of a plywood industry in the French tropical territories. This industry will use local logs of the type previously exported in large quantities to Europe and the United States, and in addition, new species which have not yet been exploited. In French Equatorial Africa, where okoumé is the chief raw material, three plywood plants are now in operation and three additional plants are under construction. The difficulties in obtaining sufficient manpower have been alleviated by an agreement providing for recruitment of labor from Nigeria to Gabon.

Steps are also being taken to develop plywood industries on the Ivory Coast and in the Cameroons.

In order to encourage the partial processing of timber before export, the British have stimulated the setting-up of local veneer and plywood factories in Nigeria and on the Gold Coast.

In addition to French tropical territories, and British Nigeria and the Gold Coast, the Belgian Congo, which produces Korina timber, has recently become a plywood producer. This has come about by the activity of the United States plywood industry, which has also shown interest in the production of veneer products in the African Gold Coast.

Trade

Exports

Before the war, world export trade in plywood was dominated by Finland which exported about 30 percent of the total, by the U.S.S.R. which exported about 25 percent, and by Poland and the Baltic countries, each of which exported roughly 15 percent of the total. So far, only Finland has regained her position on the plywood export market. Finland's exports have increased during the past few years, partly because of the gradual decline in the volume of war reparation deliveries to the U.S.S.R. There are, however, indications that Poland may, in a few years, also be able to resume plywood exports. The recent trade agreement between the United Kingdom and Poland provides for imports of a total of 1,200 m³ of Polish plywood to the United Kingdom during the years 1949-1951.

Since 1940, western European requirements of ply wood have been met to a great extent by supplies from Canada, the United States, and Brazil. Exports from the United States and Canada amount to a considerable volume, but it is interesting to note that in 1948 only 0.8 percent of the total fir plywood production of the United States was exported, whereas for the same period Canadian plywood exports corresponded to 29 percent of production. Under normal conditions, Brazil exports 60 to 70 percent of production, and Finland about 95 percent, although domestic consumption of plywood in Finland during the last few years has amounted to about 10 percent.

For countries listed in Table 2, exports rose about a third between 1946 and 1947. As in prewar years, Finland again is seen to be the major exporter. Exports from the United States were subject to considerable fluctuations and in 1948 appear to have declined even below prewar levels. Japan has disappeared from the rank of exporters, but Brazil has entered the picture and exports from Canada have become of increasing importance.

TABLE 2. - PLYWOOD EXPORTS

Exporting Country	Prewar Level	1945	1946	1947	1948
	Thousand cubic meters
U.S.S.R	175	...	...	...	...
Baltic countries	115	-	-	-	-
Finland	200	72	136	173	187
Sweden	12	20	21	17	18
Poland	100	-	-	-	-
U.S.A.	23	114	57	111	13
Canada	...	73	64	64	83
Brazil	-	31	38	45	...
Japan	50	-	-	-	-
TOTAL	675	310	316	426	...

... Not available.
- None or small.

Imports

The United Kingdom has traditionally been the greatest plywood importer by a large margin, followed by the Netherlands, Belgium, and Argentina. These countries, with the United States and Denmark, in recent years have purchased the bulk of the plywood launched on international markets.

It is obvious that the international plywood market has not yet attained any form of lasting stability For example, whereas up to 1947 the major part of plywood imports of the United Kingdom was furnished by Canada and the United States (about 23 percent and 35 percent respectively in 1947), the acute shortage of dollar currency prevailing in the United Kingdom forced it to limit drastically purchases of plywood from the United States during 1948 and to reduce imports from Canada. At the same time, the United Kingdom discontinued plywood purchases from Brazil, which had previously supplied considerable quantities (15,000 m³ in 1947).

The United States has increased its imports of plywood from Canada. The United Kingdom, as well as other importers, is looking for supplies from new sources, such as Central Africa and Japan.

The main importing countries and the respective volume of imports are shown in the following table:

TABLE 3. - PLYWOOD IMPORTS

Importing Country	Prewar Level	1945	1946	1947	1948
	Thousand cubic meters
United Kingdom	335	238	217	261	175
Netherlands	43	...	10	26	31
Belgium	35	2	18	20	22
Denmark	20	8	17	13	5
United States	...	1	21	33	33
Argentina	20	23	35	...	...
TOTAL	453	272	318	1383	1301

... Not available.
¹ Estimated total.

Prices

Prices of plywood have increased throughout the whole world during the last decade. In most producing countries, they are about three times higher on the domestic market than they were before the war. Plywood prices in the United States declined during 1948 but are reported to have stabilized towards the end of the year. In Finland, on the other hand, plywood production costs have steadily risen during recent years and at some mills have exceeded the prices obtained on the market.

Plywood prices have also risen on the international market. According to official British sources, the average c.i.f. import values of plywood (including laminboard, blackboard, and batten board) received by the United Kingdom have risen by 305 percent between 1938 and 1948. The average values of birch plywood increased 398 percent, and the average values of other plywood, 198 percent.

Lately, however, there have been indications of a break in the rising trend of plywood prices. Comparison between average c.i.f. values paid by importers in the United Kingdom in 1947 and 1948 shows an average decline of nearly 4 percent during this period. The slight drop in prices of plywood imported from Canada and the United States offsets the rising trend in the average import values of plywood of Finnish, Swedish, French, and other origin.

Future Trends

"Supplies of veneer-quality timber are limited in the Northern Hemisphere, especially as regards the clear, virgin softwoods that are contributing too heavily to the volume of cheap plywood being manufactured" and, therefore, the trends probably will be:

a) pruning of trees for the production of veneer logs,
b) new methods of producing satisfactory veneer from small logs, and
c) utilization of tropical hardwoods for plywood.¹

¹ J. Alfred Hall, Director of the Pacific Northwest Forest and Range Experiment Station, U. S. Forest Service, "Forest Utilization," Unasylva, Vol. I, No. 1.

In the United States, where, in 1944, 58 percent of the timber used for veneer and plywood was hardwood, there are current or imminent shortages of logs suitable for face veneer, but there are still sufficient hardwood logs in the country for container veneer which does not have to meet such high standards. On the other hand, the U. S. Department of Agriculture has come to the conclusion that the U. S. softwood plywood industry does not presently own enough timber lands to maintain its output and has to purchase its additional log requirements. The Douglas fir industry, in particular, will have to adapt itself to new conditions by using raw material of poorer quality than heretofore, causing more direct competition between plywood and lumber mills for log supplies.²

² Forests and National Prosperity, U. S. Department of Agriculture 1948, pp. 57, 58.

There are still some possibilities of increasing softwood plywood production in the United States.

The northern European countries, which use pine, birch, spruce, and, to a minor extent, aspen, alder, beech, and oak, etc., for veneer and plywood, are suffering from difficulties in maintaining the quality of birch veneers on a satisfactory level. In Sweden there is a shortage of birch logs suitable for plywood; consequently, home production has to be supplemented by the import of considerable quantities of birch plywood from Finland. On the other hand, there are possibilities of extending the output of softwood plywood in Sweden. The Swedish plywood industry, consisting at present of seven plants, will be enlarged by a new factory producing plywood for export, which is expected to enter into operation during the current year. In Finland the possibilities of increasing the output much beyond the present level are considered to be very limited-because of the shortage of suitable raw material.

In central Europe, Czechoslovakia and Austria are the countries where the plywood industry can be developed further. Austria, in particular, has great natural resources and it is estimated that by establishing a few big plants the Austrian plywood output (about 8,000 m³ in 1948) could be increased ten to fifteen times in the course of four years. If this is accomplished, exports could reach 100,000 m³ per annum.

Eastern European countries have launched plans providing for development of their woodworking industries. According to the Yugoslavian plans for 1947 to 1951, the country's plywood production in 1951 ought to reach a volume of 48,000 m³, an increase of more than 250 percent compared with production in 1939. The current Bulgarian five-year plan aims at an output of 700,000 m³ of veneer in 1953. The actual projects of the Ministry of Forestry in Poland involve the establishment of eight plywood factories. In the U.S.S.R. the five-year plan provides for construction of new veneer mills in the Karelian-Finnish S.S. Republic, the Komi S.S. Republic, Krasnoiarsk district, and Novgorod, Molotov, and Timmen regions, with a total capacity of 300,000 m³, as well as for restoration or expansion of a number of existing plants and for construction of 53 new glue presses.³

³ The Finnish-Soviet agreement on war reparation deliveries, signed in December 1944, provides for the delivery to U.S.S.R., during the indemnity period which has been prolonged until 1952, of 6 completely equipped plywood plants, including power plants, with an annual capacity of 12,000 to 15,000 m³ each.

The possibility for a considerable increase of a competitive plywood industry in the western countries of Europe is small. For example, a committee appointed by the British Board of Trade to consider the United Kingdom's probable requirements and supplies of timber and plywood during the period of the next five years has, in its recently published report, assumed that whereas the plywood supplies of the United Kingdom were estimated to increase from 65.2 million m² (702 million sq. ft.) to 99.5 million m² (1 071 million sq. ft.) from 1949 to 1953, the domestic plywood production will be maintained at 6.7 million m² (72 million sq. ft.) luring the same period. It is estimated that the output of the existing plywood factories in France (about 30) can be increased to approximately 120,000 m³ per annum, which would satisfy domestic requirements and leave a certain amount for exports also.

To obtain large supplies of plywood, Europe is looking to other areas and is particularly interested in the development of veneer and plywood cutting in tropical territories. For French interests, an American company is building at Port Gentil, French Equatorial Africa, a most modern plywood mill which, with its estimated monthly capacity of 930,000 m² (10 million sq. ft.), will probably become the largest hardwood plywood plant in the world. According to French sources, the program for plywood output from French tropical territories has been drafted as follows:

Ivory coast	30,000 m³ per annum
Cameroons	50,000 m³ per annum
French Equatorial Africa	75,000 m³ per annum

It is believed that these figures can easily be exceeded in the future.

The second largest plywood factory in the whole of Africa will be the one erected in Elisabethville, Belgian Congo. This plant will supply the entire domestic requirements and will also produce for export.

It is expected that considerable efforts will be made in the near future for development of the plywood industry in Latin-American countries, a subject to which much attention was paid by the FAO Latin-American Conference on Forestry and Forest Products, at Teresopolis in April 1948. The Paraná pine and other timber reserves in Brazil constitute a valuable basis for the extension of the country's plywood industry, which at present is in need of modernization and is hampered by an inadequate transportation system. A Swedish plywood company is setting up a modern subsidiary plant near Buenos Aires, Argentina, to be ready to start production soon. There are plans for the construction of a factory for the production of high-quality hardwood plywood in Guatemala.

In India, the Philippine Republic, Australia, and New Zealand, there are plans to increase plywood production, and it is believed that Japan will soon be in a position to resume her role as an exporter of great importance.