Market environment

Raute’s customers in the veneer, plywood and LVL (Laminated Veneer Lumber) industries are engaged in the manufacture of wood products used in investment projects and are thus highly affected by fluctuations in construction, housing-related consumption, international trade, and transportation.

Increasing uncertainty in key customers' markets

Raute has a significant position as a supplier of technology and services in its key markets in Europe, Russia, North America and parts of South America. We believe that our renewable technology offering and global service capacity will strengthen our position in our other target markets. 

Demand for wood products is driven by the construction industry and the demand for investment goods. Project deliveries as well as modernizations are treated as investments by our customers, which makes our business very sensitive for economic fluctuations. The global economy is very unpredictable in the short term due to political and other crises. 

In traditional markets, performance-driven thinking and lifecycle management of business operations gain importance. Demand for advanced services will increase in the future. 

In emerging markets, the market characteristics and competitive landscape are quite different: low-cost products, new raw materials and low labor costs are typical for emerging markets. In these markets, there is also demand for a new type of “low cost – easy to use” solution offering.

 

Plywood, LVL and veneer industries

The market for plywood and LVL is some EUR 45 billion a year. Investments in production technology are some EUR 650 (-800) million a year in "normal" market and economic situation. There is unlimited market potential for Raute in after sales services.

 

 

DEMAND

  • Global growth will continue in both plywood and LVL products.
  • Developed ecnomies will have only modest growth and slowing economies are a concern
  • Emerging economies in Asia and Africa will continue to create strong demand growth especially in plywood
  • Trends in wood construction in developed countries will support especially LVL growth, but also plywood

SUPPLY

  • Supply growth will be increasingly based on plantation timber
  • Natural timber-based growth expected in Russia and parts of Europe
  • In addition to raw material availability, labor availability is becoming a global problem, which leads to the increase of automation