The Japanese tsunami had a major negative effect on the industry's exports
Melbourne, Australia (PRWEB) July 18, 2012
In 2011-12, the Australian Wood Chipping industry is estimated to generate revenue of $971.6 million, down 8.7% from the previous year due to exports to Japan dropping from March 2011. According to IBISWorld industry analyst Alen Allday, “the March 2011 Japanese tsunami had a major negative effect on the industry's exports for the later months of 2010-11 and 2011-12”. This follows export declines to Japan in 2008-09 and 2009-10 due to Japanese papermaking companies sourcing woodchips from other countries and reducing overall demand. As demand from Japan decreased in most of the five years through 2011-12, industry revenue declined an annualised 6.7% for this period.
Despite recent industry declines, the Wood Chipping industry is forecast to grow steadily in the five years through 2016-17. Strong growth should come from Japanese demand returning to growth. “As the Japanese economy recovers from the 2011 tsunami, the country's paper manufacturing industries are expected to expand strongly and drive woodchip demand”, Allday says.
The industry has a medium level of market share concentration. The concentration level has increased in recent years due to industry exits, such as Timbercorp, and due to lower industry revenue since 2008-09. However, regulatory requirements to be involved in the industry may hinder concentration increases and limit new companies entering the industry in the future. Due to stringent regulations, the Wood Chipping industry comprises a small number of forestry-associated companies producing woodchips mostly for export, and other smaller firms that operate next to saw millers and use their residue for conversion into woodchips. Major players are either integrated forest companies or plantation managers that have expanded into logging and wood chipping. The two major players in the industry are Gunns Limited and South East Fibre Exports Pty Ltd.
For more information, visit IBISWorld’s Wood Chipping report in Australia industry page.
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IBISWorld industry Report Key Topics
Firms in this industry produce softwood and hardwood woodchips. The majority of these woodchips is exported to Japan, with a smaller proportion used in Australia's paper and paper products manufacturing industries.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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