Poland's wood industry is currently facing a significant drop in profitability. In the third quarter of 2023, the sawmill industry recorded a negative net profit rate, and the profitability of producers of wood products, pulp and paper, and wood-based panels also decreased.<\/p>\n
\"The wood industry is currently facing the greatest drop in profitability - Q3 2023 brought a negative net profit rate in the sawmill industry, and the sales profitability of the group of wood products producers dropped to a level of 3% that has not been seen for a long time. <\/span>Strong declines in profitability were recorded by pulp producers. and paper (ROS sales profitability index was 2.6% in Q3 2023) and wood-based boards (ROS 1.7% in Q3 2023), which is related to the high energy consumption of production,\" a report of the Polish PKO BP bank devoted to the situation of the wood industry said.<\/p>\n Wood industry margins<\/strong><\/p>\n The report's authors believe that the margins of Polish companies, especially those in the wood and paper industries, may be \"under pressure for the next few quarters, at least until Q2 2024.\" In their opinion, this will be the result of expected further declines in the prices of finished products in these industries, \"with limited opportunities to reduce costs, among others due to the increase in the minimum wage from January 2024 and still high energy prices.\" It was also added that the \" strongly export-oriented \" producers of furniture, pulp and paper are also not favored by the strengthening of the zloty exchange rate against the euro.<\/p>\n However, the report stated, the furniture and paper industries are already seeing signs of improvement, as indicated by the growing leading economic indicators in recent months , which exceed the average values \u200b\u200bin industrial processing.<\/p>\n \"The reversal of negative trends will be supported by the increase in private consumption expected in 2024 on the domestic market , as well as, although on a smaller scale, on the markets of our main export partners. However, the sentiment in the wood industry is still negative, which is largely due to the limited activity in the construction industry. and lower demand for industry products, among others, from furniture manufacturers. In our opinion, the return to the growth path in the wood industry will occur in the second half of 2024 at the earliest.\" \u2013 assessed in the report.<\/p>\n Improving the situation in the industry<\/strong><\/p>\n Other factors that can improve the situation in the industry include: demand for joinery in connection with thermal modernization works (Renovation Wave), or the growing popularity of wooden construction. Processors are also supported by the long-term trend of replacing products with a high carbon footprint with products of natural origin, which also benefits paper packaging producers.<\/p>\n \"The demand for furniture and many wooden products depends to a large extent on the situation on the housing market, which is currently supported by the 2% Safe Credit. The possible expiration of this program combined with the low number of new apartment construction starts in 2022 and 2023 may, however, have an impact on negatively on the domestic demand for furniture and wooden elements of home furnishings in the 2024-2025 perspective,\" it added.<\/p>\n Profitability of selected producers<\/strong><\/p>\n It is indicated that the profitability of paper products producers has increased (the sales profitability index in the third quarter of 2023 was 10.7%), and the average profitability of the furniture industry has also improved (ROS 5.9% in the third quarter of 2023). ).<\/p>\n \"However, what is disturbing is the decreasing percentage of profitable enterprises in all analyzed industries . In the sawmill industry, every third company was in the red in Q3 2023 - such a large share of unprofitable units was recorded in this industry over 10 years ago (apart from the pandemic Q1 2020). In the case of the furniture industry, this indicator dropped to 74.1% in the third quarter of 2023 (-4.7 pp y\/y), which means that every fourth furniture manufacturer recorded a loss in the third quarter of this year. net\" \u2013 indicated in the report.<\/p>\n According to the authors, this \"shows, compared to the increase in average profitability in the industry, how different the situation of individual companies can be in an unfavorable market environment.\" \" Companies that are less efficient or highly exposed to the German market , which is currently facing a significant reduction in economic activity, are in a worse situation, \" it added.<\/p>\n Poland as a wood producer<\/strong><\/p>\n The authors of the report referred to FAO data, which show that Poland is the 5th producer of wood in the EU, after Germany, Sweden, Finland and France. Wood harvesting in Poland has been growing for several decades , just like in most European countries that are the leading producers of this raw material.<\/p>\n \"According to FAO, 45.1 million cubic meters of roundwood were harvested in Poland in 2022 (...), i.e. 4.6% more than in 2021 (according to the Central Statistical Office, the harvest in 2022 amounted to 44.6 million cubic meters). . The vast majority of the raw material obtained in Poland meets the needs of domestic processors. According to FAO, exports of roundwood from Poland in 2022 amounted to 3.8 million cubic meters (-7.8% y\/y), which represented 7.9% of the national supply wood (i.e. harvesting plus import),\" the report stated.<\/p>\n Wood export<\/strong><\/p>\n It was added that the ratio of exports to supply has been systematically decreasing since 2018 . Last year, domestic supply increased significantly, but exports increased even more due to the large amount of wood harvested after wind quarries in 2017.<\/p>\n \" Poland is a net exporter of unprocessed wood . Eurostat reports that wood exports from Poland in the period January-August 2023 amounted to 2.7 million cubic meters and were clearly lower than in the same period a year earlier (3.7 million cubic meters) and throughout 2022 (5 million cubic meters). Germany dominates the geographical structure of exports, with a share of nearly 40 percent. A total of 24 percent of wood exported from Poland went to the Czech Republic and Slovakia, and 16 percent to China (vs. 45 percent in 2020 ; from 2021, wood exports from Poland to China are decreasing ),\" we read in the report.<\/p>\n The authors of the report added that the wood processing industries - furniture, wood and paper - accounted for 11.8% in 2022. gross value added of industrial processing. They indicated that the importance of these industries in the Polish industry is strengthening in the long term , as evidenced by the increasing value of this indicator over recent years (9.2 percent of gross value added in processing in 2010; 11.3 percent in 2015).<\/p>\n \" Poland is the largest export of furniture in the EU and the second largest exporter of wood products after Germany. Poland's importance in the EU export of paper industry products is also growing (6th place in the period Q1-Q3 2023), especially in the production of paper packaging (3rd place),\" it added.<\/p>","protected":false},"excerpt":{"rendered":" Poland’s wood industry is currently facing a significant drop in profitability. In the third quarter of 2023, the sawmill industry recorded a negative net profit rate, and the profitability of producers of wood products, pulp and paper, and wood-based panels … Continue reading