As construction projects gather pace across the GCC, demand for timber is reaching new heights. Whether it is softwood lumber and plywood for concrete forming and general building works or hardwood lumber and wood-based panels for interiors and furniture, the region’s appetite for wood products is certainly growing. The GCC, and most particularly, the United Arab Emirates and Saudi Arabia, have now become key destinations for many supplier countries and feature among the top ten or even five export trade partners.
Not too many years ago, timber exporters to the GCC were limited to a handful of pioneering companies from a few countries. The range of products sold in to the market was far from expansive and their availability was sporadic. Today, however, the region attracts wood product suppliers from every corner of the globe and just about every conceivable wood or wood-based product is represented on the ground and is readily available. Additionally, numerous partnerships have been formed between GCC-based agents and importers and overseas suppliers. Some of these have since developed in to large-scale enterprises with representation across the Middle East and beyond. Various national wood promotion and marketing bodies have also now become very active in the region – some with many years of representation in the Gulf already chalked up, such as the Malaysian Timber Council and the American Hardwood Export Council. Their recognition of the GCC as a major and developing destination for their products has driven them to include the region as a key part of their global promotional strategies.
Although reliable complete trade data is unavailable, it can be estimated that imports of all wood products by the six GCC member states reached a total value of USD 1.7 billion during the first nine months of 2012, rising by around 16 percent from the same period in the previous year. The leading suppliers of wood products were China, Malaysia, Romania, Germany, Indonesia and the United States and shipments from these six nations accounted for around two thirds of all exports to the GCC. The main product shipped to the region was softwood lumber, which accounted for as much as 17 to 20 percent of total imports by value. Hardwood plywood, medium density fibreboard (MDF) and other wood-based panels and hardwood lumber made up the bulk of the remainder, while other products included flooring, doors and door sets, semi-finished panels and components and hardwood veneers.
Just taking figures from the top six suppliers to the GCC – China, Malaysia, Romania, Germany, Indonesia and the United States – wood product imports reached a total value of USD 1.3 billion during the January to September period of last year, rising by 16.2 percent from the same three quarters of 2011. Saudi Arabia stood out as the leading destination for exports from these six supplying countries, with total shipments reaching USD 574.3 million and increasing by 18.2 percent from the same period in the previous year. At the same time, the UAE’s imports from these six countries reached USD 496.4 million, rising from USD 439.9 million during the first nine months of 2011.
China’s exports of all wood products to the GCC member states grew by 17.5 percent year-on-year in January to September of 2012 and reached a total value of USD 568.5 million. A significant proportion was accounted for by hardwood plywood, but many other items also made up the product mix. The number two supplier to the region was Indonesia, with shipments of all wood products attaining a value of USD 217.3 million during the period and rising by 18.6 percent on the same nine months of 2011. Plywood and MDF were the key products imported from Indonesia, while these also came from Malaysia, in addition to large volumes of hardwood lumber. Total shipments from Malaysia during the first three quarters of 2012 reached USD 186.6 million, rising by 21.2 percent from the same period in the previous year.
Not only has the GCC become an important destination for wood products, but it has also become a vital trading hub for a wider region. This is particularly true for the UAE, where re-exports of wood products account for as much as 30 percent of total imports. Some of this is intra-GCC trade, but major destination markets also include Iran, Somalia, Rwanda and India.
The construction sector in the GCC looks set to continue its recovery through this year from the downturn seen in 2009 and, as a result, it is widely anticipated that demand for wood products will continue to rise across the region. More suppliers from even more countries will choose the Gulf as a key destination for their products over the next twelve months and competition is likely to be tough. However, with declining wood consumption in many European markets and just the beginnings of an uncertain recovery being seen in the United States, the battle for market share is likely to be worth the effort.
