Wood and Wooden Furniture Industry
Thai economic conditions in 2004 show a continual growth rate ingovernment investment and export in the international trade. Despite negative factors such as rising oil prices, outbreak of bird flu disease in the region, unrest in the 3 southern provinces of Thailand, Tsunami in the 6 southern provinces and slowdown in global economy, it is expected that Thai economy in 2004 would expand no less than 6 % (National Economic and Social Development Board, December 7, 2004).
Overall wood and wooden furniture industry in 2004 is still expanding as compared to the previous year, particularly in export value of products to foreign market which continues to increase from the previous year because of domestic entrepreneurs’ potentials development, new market identification and expansion into markets of trading partners, particularly from government support in establishment of FTA(Free Trade Area) with new important tradingpartners including India, Middle East countries, China and Australia. This results in higher export value of products in the wood and wooden furniture industry. Besides, the domestic factors are also helpful in strengthening the domestic wood and wooden furniture industry, as seen from the expansionofdomestic real estate and construction businesses which have the continual growth rate this year, also causing the continual growthof wood and wooden furniture industry in 2004.
1.Production
Production volume of wood and wooden furniture industry in 2004 is 25.56 million pieces decreased by 5.56 %as compared to last year because entrepreneurs have focused more on quality-oriented production with the attempt to develop from “Mass Products” production to customized production in order to meetspecific customer demand or more branding features that focus on high quality and standard production. This is reflected in export value of products in this industry in 2004 that continues to increase, as compared to the previous year,with demand and popularity of Thai wood and wooden furniture in foreign market, especially wooden products and furniture made of para rubber tree.
Table 1:Production of Wooden Furniture
Unit: million pieces
Production / 2002 / 2003 / 2004 / Growth Rate (%)Q1 / Q2 / Q3 / Q4 / Q1 / Q2 / Q3 / Q4 / Q1 / Q2 / Q3 / Q4* / 2003/2004
Wooden furniture / 8.81 / 9.01 / 8.87 / 7.08 / 6.48 / 6.24 / 7.27 / 7.19 / 6.88 / 5.56 / 6.71 / 6.41 / -5.96
Source:IndustrialEconomicsInformationCenter, Office of Industrial Economics
2.Export and Import
2.1Export
Export conditionsin wood and wooden furniture industry in 2004 have expanded up to 21 %as compared to the previous year, with a value ofUS$ 1,980.3 million. Product category in wood and wooden furniture industry can be classified into 3 following categories.
(1)Furniture and parts (Group 1 in Table) are 50 %of total export value of all products in wood and wooden furniture industry. In 2004, the export value is US$ 1,082.3 millionincreased by 18 % from year 2003. Products in this category having the highest export growth rate are furniture and parts representing 24 %of total export as compared to last year. Major export markets for this product category areU.S., Japan and European Union countries.
(2)Woodenproducts (Group 2 in Table) are 20 % of total export value of all products in wood and wooden furniture industry. Wooden products consist of wooden utensil, wooden construction equipment, wooden photo frame, wooden sculptureand ornaments. In 2004, the export value is US$ 380.07 millionincreasedby 8 % from year 2003. Major export markets for this product category areU.S., Japan and UK, respectively.
(3)Processed lumber and board (Group 3 in Table) is 3 % of total export value of all products in wood and wooden furniture industry. Products in this category consist of processed lumber products, veneer board, plywood, fiberboard and other wooden products.In 2004, the export value is about US$ 693.66 millionincreased by 89 % from the previous year, which is relatively high, with processed lumber productsand plywood having the relatively high growth rate. Major export markets for this product category areChina, U.S. and Japan.
Table 2:Export Value of Wood and Wooden Furniture
Unit: US$ million
Products / 2002 / 2003 / 2004 / Growth Rate (%)Q1 / Q2 / Q3 / Q4 / Q1 / Q2 / Q3 / Q4 / Q1 / Q2 / Q3 / Q4* / 2003/
2004
1. Furniture and parts / 188.4 / 182.9 / 236.6 / 218.1 / 227.3 / 209 / 222.6 / 258.5 / 256.9 / 258.1 / 272.6 / 294.7 / 18
1.1 Wooden furniture* / 130 / 122.9 / 165.5 / 142.4 / 154.5 / 129.7 / 142.1 / 161.5 / 163.3 / 163.9 / 172.3 / 188.7 / 17
1.2 Other furniture* / 42.6 / 42.5 / 51 / 55 / 50.8 / 55.5 / 55 / 63.7 / 63.1 / 62.1 / 67.7 / 71.75 / 18
1.3 Furniture parts / 15.8 / 17.5 / 20.1 / 20.7 / 22 / 23.8 / 25.5 / 33.3 / 30.5 / 32.1 / 32.6 / 34.18 / 24
2. Wooden products / 77 / 83.60 / 96.30 / 93.40 / 87.20 / 80.70 / 91.10 / 91.80 / 87.00 / 88.60 / 103.10 / 101.37 / 8
2.1 Wooden utensil / 24.7 / 28.10 / 31.00 / 30.8 / 26.4 / 26.2 / 30.9 / 27.8 / 25.3 / 25.9 / 30.1 / 27.79 / -2
2.2 Wooden construction equipment / 24 / 23.7 / 27.8 / 26.9 / 27.7 / 26.7 / 25.6 / 28.8 / 28 / 28.8 / 31.3 / 32.45 / 11
2.3 Wooden photoframe / 20.8 / 25.2 / 29.1 / 27.5 / 24.1 / 19.8 / 24.7 / 25.4 / 24 / 21.9 / 30.9 / 29.13 / 13
2.4 Wooden sculpture / 7.5 / 6.6 / 8.4 / 8.2 / 9 / 8 / 9.9 / 9.8 / 9.7 / 12 / 10.8 / 12.01 / 21
3. Wood and boards / 71.2 / 88.4 / 87.2 / 79.6 / 90.3 / 93.2 / 93.2 / 90.2 / 109.7 / 309.7 / 129.4 / 144.86 / 89
3.1 Processed wood / 21.3 / 26.1 / 24.4 / 27.2 / 38.7 / 38 / 35 / 34.1 / 43.7 / 59.8 / 49 / 57.39 / 44
3.2 Veneer boards / 1.9 / 2.1 / 2.2 / 2 / 2.4 / 1.3 / 2 / 2.4 / 2.5 / 2.5 / 2.1 / 2.17 / 14
3.3 Plywood / 12.2 / 14.4 / 15.5 / 11.8 / 10.4 / 12.7 / 13.3 / 14.8 / 14.3 / 22.0 / 32.5 / 34.95 / 103
3.4 Fiber board / 22.6 / 22.1 / 23.8 / 22 / 22.2 / 25.1 / 22.7 / 23.8 / 24.8 / 31.8 / 28.3 / 29.65 / 22
3.5 Other wooden products / 13.2 / 23.7 / 21.3 / 16.6 / 16.6 / 16.1 / 20.2 / 15.1 / 24.4 / 17.9 / 17.5 / 20.71 / 18
Total / 336.6 / 354.9 / 420.1 / 391.1 / 404.8 / 382.9 / 406.9 / 440.5 / 453.6 / 480.7 / 505.1 / 540.9 / 21
Source:Department of Trade Negotiations, Ministry of Commerce
2.2Import
Wood and wooden products import conditionsare mostly focused on an import of hard-contented timber raw materials thatare lumber and different types of processed wooden products. In 2004, the total import value is US$ 661.96 millionincreased by 32.02 % from 2003. Major imported product in this category is lumber fromBurma and Malaysia. Wooden products or different types of processed woods are mostly imported from Malaysia, Lao and U.S.
Table 3:Import Value of Wood and Wooden Furniture
Unit: US$ million
Products / 2002 / 2003 / 2004 / Growth Rate (%)Q1 / Q2 / Q3 / Q4 / Q1 / Q2 / Q3 / Q4 / Q1 / Q2 / Q3 / Q4* / 2003/2004
1. Other processed lumbers / 83.1 / 100.8 / 96.6 / 97.8 / 97.3 / 104.2 / 114 / 104.4 / 132.7 / 142.7 / 130.8 / 136.9 / 29.34
2. Wooden products / 12.7 / 14.2 / 13.1 / 18.3 / 17 / 23.2 / 19.8 / 21.5 / 26.4 / 28.4 / 29.1 / 34.9 / 45.76
Total / 95.8 / 115 / 109.7 / 116.1 / 114.3 / 127.4 / 133.8 / 125.9 / 159.1 / 171.1 / 159.9 / 171.86 / 32.02
Source:Department of Trade Negotiations, Ministry of Commerce
3.Summary and Trend in 2005
In 2004, overall Thai wood and wooden furniture industry conditions continue to improve because of domestic market demand and demand for export of Thai wooden products to foreign market. Thaifurniture made of para rubber wood have been greatly demanded in foreign markets, especially in Japan. Thailand also has an advantage in raw materials source availability, domestically, without any concern for raw materials shortage. However, due toan increasing demand for para rubber wood fromboth domestic entrepreneurs and competitors especially China and Malaysia, it results in higher price of para rubber wood as raw materials, raising the production cost of these products. This can affect the industry in the future which domestic entrepreneurs need to adjust themselves. In addition, product development and new market identification are the important factors in strengthening Thai wood and wooden furniture industry in the future.
In 2005, it is expected that the world economy and Thailand’s economic conditions would slow down as a result of rising oil prices,increasing interest rate and effect of Tsunami that directly affected Thailand and other Southeast Asian countries. These would result in decreasein growth rate of overall economic conditions which would slightly slow downthe domestic wood and wooden furniture industry in line with overall economic conditions. But, the rehabilitation from such catastrophe and improvement of real estate and construction businesses would induce demand for the industry, but only for the first half of year 2005.