Use of Plywood for Construction Is Booming

Use of Plywood for Construction Is Booming

The awakening economic growth in Europe is expected to also boost the plywood market. Mika Sillanpää, the Executive Vice President of UPM Plywood, believes that the plywood market will grow even faster than at present after the economic growth in Europe has started. More than 90 per cent of UPM Plywood’s production is exported.

“New construction has been at a standstill for a long time, and its restart will mean an increase also in plywood consumption. From the point of view of our end user areas, consumption in Europe is about to start growing. This is evident, for example, in Spain where a new economic beginning has started after several bleak years. Great Britain is also doing well and Germany moderately, but France is still waiting for a positive change,” Sillanpää concludes.

“Although construction volumes have been low throughout Europe, plywood consumption is not as dependent on new construction as sawn timber is. Renovations are happening all the time and that has kept plywood sales going.”

Sillanpää points out that despite the European recession in construction, UPM has increased its export of plywood. “This positive growth is based on high-quality products, service that emphasises supply chain performance and customers of demanding end user products who value good service and high quality. Finland will not be able to compete in the area of the cheapest end user products; instead, the entire Finnish wood product industry needs to specialise in quality and service.” 

The low, mid and high-end products that are based on quality and the end user product are easy to identify in the plywood market. UPM does not work at all with the lowest quality products, but offers some mid-range ones and focuses particularly on high-quality end products. “We are concentrating on our chosen end user areas. We want to increase people’s knowledge of them and be the leader in this market,” Sillanpää says.

Big expectations for growth in the transport field

UPM Plywood has three main end user areas: construction, floor construction for transport equipment and LNG carriers. It also produces plywood for the furniture industry, interior decoration and parquet construction. “What these end user areas have in common is the fact that they use high-quality plywood that falls into the more expensive price range,” Sillanpää explains.

Plywood construction products are sold as off-the-shelf products for the distribution chain and special products are sold to industrial end users, such as manufacturers of truck trailers. “Our customers include the largest European manufacturers in the field. Transport is a growing area whose potential people have a lot of faith in, although the general hard economic times in Europe right now are evident in all construction areas. After construction, the second largest end user area is truck floors, followed by LNG carriers.”

For UPM, the construction of LNG carriers is a steady and strong business area whose success is especially based on the insulating characteristics of birch plywood at extremely cold temperatures. During the transport of liquefied natural gas, the temperature in the carrier is -162 °C, and birch plywood has been found to retain its strength well in these conditions.

“LNG carriers are large and you need huge volumes of material for building them. One carrier requires from one to three thousand cubic metres of plywood, depending on the special technology used. This is a growing business with a bright future,” Sillanpää sums up.

The increase of ecological values in construction is also evident in the plywood market. Plywood is made from a renewable material and is considerably lighter than steel. “Light weight is especially important for transport. The fact that the large markets in Europe, the USA and China still use a lot of steel in transport means that we still have a great deal of potential for growth,” says Sillanpää.

Sillanpää reminds us that Finland has an excellent reputation as a supplier and exporter of wood and wood products. “We use certified wood in processing and we have no ethical problems in our production.”

UPM is implementing a new investment worth MEUR 40 for its plywood plant in Otepää, Estonia, which will double the factory’s capacity.

Article Service Markku Laukkanen

For more information contact: Mika Sillanpää, +358 20 415113, mika.sillanpaa@upm.com