The pandemic has significantly impacted everyone’s pace of life and has brought both short-term and long-term changes in many sectors. Birch plywood industry has been no exception and in recent years it had to manoeuvre between rapid increase in raw material costs, high market demand for plywood products, and adjustment of finished product prices.

Demand for birch plywood in construction industry remains stable

By assessing the sales figures it can be concluded that the construction sector has remained stable. One explanation is the active development of various types of large-scale projects around the world, often funded by local or regional authorities. There is also a positive change in the demand for birch plywood for interior use, which can be explained by a change in people’s habits, with a greater focus on renovation work as a result of the pandemic. In addition, birch plywood is gaining increasing popularity as a material for interior fittings, as it is friendly to the environment and human health.

Rapid growth in commercial transport industry

Commercial transport industry is one where the demand for birch plywood products has always been stable. As Valdis Kulpe, Head of Sales of Latvijas Finieris, explains, this year has demonstrated a sharp increase in demand, for example, in the heavy commercial vehicle industry. Compared to the figures of the previous year, the increase in sales volume of Latvijas Finieris in this industry has already exceeded the figures of 2020.

Also, positive changes in demand can be experienced in the light commercial vehicle industry, due to both a change in people’s shopping habits by using more opportunities provided by the internet, and an increase in goods traffic, where a high level of service and fast delivery is important. In addition, the growing number of supporters of the green lifestyle and various policy decisions have led to the introduction of new light vehicles suitable for transporting goods, such as environmentally friendly hybrid cars and electric cars. Sales volumes in this industry in 2021 are already higher than the annual figures presented in 2018, 2019 and 2020.

Demand for birch plywood and increasing raw material prices

This year, like the previous one, we’ll spend following and adjusting ourselves to fluctuations in raw material prices on world markets and the demand development for birch plywood in various industries. Prices for raw materials for birch plywood, including wood, glue, finishing materials, various plywood overlays and packaging materials, as well as costs for production and transportation, have risen sharply. Unfortunately it has not been possible to compensate this by increasing the prices for finished products.

In some market segments, prices went down last year and increased again sharply this year due to a significant imbalance in supply and demand.

“After a rapid recovery from the economic uncertainty caused by the pandemic, low stocks of goods and materials along the supply chain were rapidly restored, thus calming down the overheated demand. A period of stabilisation of prices and demand has now begun, but we shall have to be prepared for new fluctuations in raw material prices. We expect the high demand in all industry sectors to continue next year, especially in the transport industry. Many countries are anticipating economic growth, which is also likely to have a further positive effect on market demand for birch plywood. But whether it materialises – time will tell.”

Valdis Kulpe, Head of Sales of Latvijas Finieris.

Despite the challenges of the pandemic, it has also given valuable experience for both producers and consumers to adapt to changes in the business environment. This will well reflect as our future ability to rapidly respond to new price and demand fluctuations, using them in our advantage.