Major industry players are either integrated forest companies or plantation managers that have expanded into logging and woodchipping.
Melbourne, Australia (PRWEB) December 13, 2014
Hardwood woodchip exports to Japan's paper manufacturers are the main source of revenue for the operators in the Wood Chipping industry in Australia. Despite declines in Japan's economic health in the past five years, these large paper producers are the industry's largest clients. According to IBISWorld industry analyst Alen Allday, “Japan has invested heavily in forestry plantations in Australia and controls a large proportion of domestic plantation areas.” The March 2011 Japanese tsunami and Fukushima nuclear disaster had major negative effects on the Australian Wood Chipping industry's exports for the later months of 2010-11 and throughout 2011-12. This followed declines in exports to Japan in 2008-09 and 2009-10, due to Japanese papermaking companies sourcing woodchips from other countries and reducing their overall demand. As demand from Japan has decreased in most of the five years through 2014-15, industry revenue is expected to decline by an annualised 2.9%. Total exports as a proportion of industry revenue have increased from 81.7% in 2009-10 to an estimated 85.0% in 2014-15 as exports to China have increased strongly and industry revenue has declined at a faster rate than exports.
In 2014-15, the industry is forecast to generate revenue of $596.9 million, up 10.6% from the previous year as a result of some export growth to Japan and higher domestic demand. “Due to stringent regulations, the industry comprises a small number of forestry-associated companies that produce woodchips mostly for export,” says Allday. It also includes smaller firms that operate next to sawmills and use their residue for conversion into woodchips. The major players are either integrated forest companies or plantation managers that have expanded into logging and woodchipping. The industry exhibits a high level of market share concentration. Major players include Mitsui Bussan Woodchip Oceania Pty Ltd, Midway Limited, South East Fibre Exports Pty Ltd and WA Plantation Resources Pty Ltd.
Despite its recent struggles, the Wood Chipping industry is forecast to return to growth in the five years through 2019-20 as demand from Japan increases again. As the Japanese economy continues to recover from the 2011 tsunami, the country's paper manufacturing industries are expected to expand strongly, driving growth in demand for woodchips.
For more information, visit IBISWorld’s Wood Chipping industry in Australia report page.
Firms in the industry produce softwood and hardwood woodchips. The majority of these woodchips are exported to Japan, with a smaller proportion used in Australia's paper and paper products manufacturing industries.
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