Prices of wood veneers have grown rapidly from historical lows thanks to increased demand from a recovering construction market.
Los Angeles, California (PRWEB) February 19, 2014
Buyers of wood veneers have a buyer power score of 3.4 out of 5.0, which is representative of the modest buyer negotiating power in the wood veneers market. “Buyers have a wide variety of vendors to choose from because the market lacks dominant companies due to low profit and low product specialization,” says IBISWorld procurement analyst Jesse Chiang. Switching costs, however, can be substantial due to financial and quality risks that come with switching suppliers. Overall, recent increases in demand from construction are expected to drive the market's strong price growth, which is estimated to continue throughout the three years to 2013.
The market share concentration for the wood veneers market is low. In the absence of a dominating major company, buyers can freely choose between multiple competitors, increasing their leverage. Furthermore, wood veneers require low specialization because they can easily be made with a bandsaw; this low specialization boosts buyer leverage. However, buyer choice is somewhat limited by significant financial risks among suppliers and wide ranges in quality. “The average wood veneer vendor carries significant financial risk because companies must invest heavily in machinery to participate in the market,” says Chiang. Volatile demand during the recession and the market's low average profit margin worsened this risk. Furthermore, there is no standardized measure of quality in the market, so buyers must be careful to inspect quality when choosing suppliers. Major suppliers in this market include Besse Forest Products Group, Columbia Forest Products Inc., M. Bohlke Veneer Corporation and Timper Products Company.
Market prices have also been increasing rapidly in the three years to 2013. Since the peak of the recession, construction industries have been rebounding, driving demand for wood veneers. These products are used on various items used in buildings, such as doors and furniture; therefore, increased construction activity has raised demand for wood veneers. Unfortunately for buyers, however, increased demand has also driven price growth, and it is expected to continue to drive price growth in the three years to 2016. Consequently, buyers should seek volume-based discounts and contracts now in order to avoid growing prices.
For more information, visit IBISWorld’s wood veneers procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of wood veneers. Wood veneers are slim slices of wood that are used as an external layer for another piece of wood or they are glued together to form the core material for various wood projects. Typically, wood veneers are attached to a core panel, usually composed of a low-quality wood. Core panels, which make up the primary structure of a wooden item, are covered with veneers for protective and aesthetic qualities. Veneers are also glued together to form plywood, a type of core panel. This report, however, does not include plywood or veneers made strictly for the use of plywood.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.