The Russian birch plywood industry : production, market and future prospects

Abstract: It is expected that the Russian birch plywood capacity will increase in the near future. Thus, there is a strong competition for the birch raw material in Russia. The questions that arise and are clarified in the thesis are as follows: - Which birch plywood producing companies are the current market leaders in Russia? - How will the supply of plywood logs (raw material) develop in the future? - How competitive are the other materials that can substitute plywood, e.g., OSB and what will be the dominating material on the Russian market in the next 10 years? - What potential does the birch plywood industry have in Russia and what are the main future opportunities and threats? The objective of the thesis is to carry out a market research of the current and possible future birch plywood capacity in Russia. The purpose is to analyze the business situation for both birch plywood producers and consumers. Empirical data was collected using a qualitative research method, involving personal interviews. The participants in the study are Russian birch plywood producers (accounting for approximately 40% of the total production volume) and consumers in both Russia and Sweden. The scope of the thesis is to investigate the entire Russian birch plywood industry. The results show that the there is a strong domestic demand in Russia for birch plywood. The plywood industry will continue to expand and new market entrants will establish by means of specialization and customized production. The production of large-sized birch plywood is increasing and will be demanded by the growing construction industry. The raw material supply has improved due to the implementation of higher export taxes. However, insufficient infrastructure remains a problem. The main threat in the future is OSB, which will substitute low quality birch plywood. It is expected that OSB production facilities will establish in Russia in the next 2-5 years. The price for Russian plywood is expected to increase and Swedish consumers are forced to revise their strategies by considering cheaper substitutes or new plywood suppliers in other countries.