The European technological level is as a whole high. Birch, spruce, certain pine species and poplar are the major raw materials. The produced plywood is primarily marketed in Europe, but special products are also exported to the US and East Asiat. The spruce LVL markets are worldwide. Finland is the most significant LVL-producing country in Europe.
Raute is the largest player in Europe, competing with the Italian company Cremona in poplar plywood region and with the German supplier Grenzebach globally in drying technology.
The challenges of the wood products industry will lie in developing the production capacity in the coming years. Later the recovery of European construction may bring need also for new capacity, expecially what becomes to LV, in the market.
Raute's strengths are being a highly recognizable company and having a reputation as a long-term partner. Raute is seeking growth by intensifying customer cooperation and by expanding the service offering towards long-term development to improve quality, efficiency and competitiveness.
Raute is the market leader in Russia. Raute's competitors are also interested in Russia, and the Japanese machine suppliers are particularly active. Local competitors are improving their know-how and the technical level of their products and strengthening their competitive position. Foreign players need to be prepared for fast changes in the trade policies and other business risks typical for Russia.
The exportation of and domestic demand for plywood are expected to rise and the plywood industry is on the lookout for new innovative products and markets. The growing demand and increasing exploitation of forest resources are activating new mill investments. The Russian government strives to promote the development of the national plywood industry through its own actions e.g. by granting financial support for infrastructure development to local governments.
Raute's strengths in Russia are its long-term experience of the local operating practices, customer service in Russian and a large installed machine base. Reliable state-of-the-art technology, good long-term customer relationships and a solid track record of successes are important references for new investors as well.
Australia and New Zealand are developed, high-technology areas where plywood production is growing slowly. The availability of raw materials is based on well-managed plantation forests. There is a relatively small number of medium-sized and large plywood manufacturers in the area. Raute is one of the leading machine suppliers. Raute's competitors in the area are Japanese and American companies and local engineering shops. Efforts to develop and streamline the exploitation of plantation wood will continue in the area also in the future.
The South-East Asian plywood production (Malaysia, Indonesia and Papua New Guinea) has declined in the 2000s as a result of the depletion of the natural raw material and the scarcity of logging rights. This development has been strengthened by environmental awareness and actions to protect the environment. The use of plantation wood is expected to improve the situation and increase plywood production during the next 2 to 5 years. The Japanese machinery suppliers hold a strong position. Raute's business opportunities stem from the conversion of existing production facilities for new plantation wood species and the construction of new mills to exploit the plantation wood resources. Further processing of plywood plays an important role in building competitiveness and reorganizing the markets after the economic crisis. Raute capitalizes on its position as a forerunner in handling small-diameter wood.
The world's largest plywood producing country, China, is an emerging market where plywood industry enjoyed strong growth throughout the 2000s. The local raw material reserves have not traditionally had the required quantity or quality to cater to the needs of the country's growing plywood industry, which means that a large part of the higher-quality raw material is based on imported wood from, among others, Russia and the Pacific area. However, the situation is changing thanks to plantation forests.The plywood production machinery is simple and the manufacturing methods are labor-intensive. The Chinese plywood production will develop gradually, driven by the quality requirements placed on plywood. Raute's competitors in China are local engineering shops and equipment manufacturers. Raute's strategic goal is to become a major player in renewing the Chinese plywood industry.
Raute's major competitors in South America are Brazilian equipment manufacturers. European and American competitors are also present in the area.
The volumes of wood produced by the plantation forests continue to increase, creating business opportunities for Raute. Even smaller mills are shifting their investment focus to increasingly modern production technology. The plywood manufacturers in the area will develop their production and increase their production capacity. Raute's objective is to maintain its leading position in constructing new capacity and to acquire new customers within the modernization and development projects of small and medium-sized plywood manufacturers.
The economic recession and financial crisis have greatly affected North America, and construction activity plunged by more than 70 percent in 2008 - 2010. Although a turn to a better direction has already taken place, we are still far from the pre-recession level. The investment activity has been very low and nearly exclusively focused on production machinery modernizations. The recovery of construction is expected to continue and have a positive effect on the demand for wood products in 2013 and some years to follow.
Raute's most significant competitor and market leader in equipment deliveries in North America is the American company Coe Manufacturing belonging to the USNR Group. A number of small local equipment manufacturers and companies concentrating on streamlining plywood production processes operate in the area. Raute aims at improving and establishing its position in North America by capitalizing on its automation know-how, together with Raute's high-capacity, state-of-the-art technology and modernization expertise.