OPPORTUNITIES FOR CANADIAN WOOD PRODUCERS TO
EXPAND THEIR MARKET SHARE IN TURKEY
Prepared for
September 29, 2014
IBS
R e s e a r c h &
C o n s u lta n cy
Table of contents
IBS
R e s e a r c h &
C o n s u lta n cy
Introduction
Economy
GDP forecasts
Politics
Exports
1. Forestry in Turkey
Forests in Turkey
Wood supply
2. Wood products in Turkey
3. Opportunities
4. Trends
5. Regulatory issues
6 Recommendations
Annex A – Wood products
A.1 Fibreboard
A.2 Particle board
A.3 Veneer
A.4 Plywood
A.5 Sawn wood
A.6 Flooring
A.7 Furniture
A.8 Others
Annex B – Industry value chain
Annex C – Trade with Canada
2
Project schedule and interviews
This market research was conducted between February and April 2014.
IBS carried out 42 in-depth interviews during
Industry
IBS
R e s e a r c h &
C o n s u lta n cy
Number of
interviews
Wood products manufacturers/traders
25
Sectoral associations
6
Furniture manufacturers
4
Governmental bodies
4
Prefabricated building company
1
Certification company
1
Customs clearance company
1
TOTAL
42
3
Introduction
i Economy
Today, growth slowing amid evidence of overheating
• In 2013, growth was 4% and in Q1 2014 4.3%. The
government medium-term programme is for 4% in 2014 and
5% in 2015-2016.
GDP growth, quarterly, 2008-2014
• The current account deficit was $65 Bn in 2013, equivalent to
7.9% of GDP.
Medium-term
programme
15%
10%
• The IMF expresses concern at this and Turkey’s need for
$220 Bn inflows each year to finance the deficit and roll over
short-term debt.
5%
0%
-5%
1 2008 5 2009 9 2010 13 2011 17 2012 21 2013 252014
‘000
• Warnings from IMF and leading rating agencies suggests
that future growth is unlikely to be as strong as the recent
average
-10%
-15%
Net foreign exchange reserves, 2010-2014
Net Foreign Exchange Reserves, 2010-2014
120,000,000
100,000,000
80,000,000
60,000,000
TL '000
40,000,000
US$ '000
20,000,000
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1/1/14
1/7/13
1/1/13
1/7/12
1/1/12
1/7/11
1/1/11
1/7/10
1/1/10
-
Introduction
ii GDP forecasts
International forecasts for GDP now much below official Turkish figures
Selected forecasts for growth of Turkish GDP
Forecasting Body
Forecast Date
Period
Annual GDP Growth
International
Turkish official
2014
State Planning Organisation for
Ministry of Energy
2016
June 2004
2004-20
October 2013
2014-16
Tenth Development Plan
July 2013
2014-18
IMF World Economic Outlook
April 2014
2014-19
2.3%
3.1%
3.5%
Fitch Ratings
April 2014
2014, 2015
2.5%
3.2%
na
OECD Turkey economic forecast
May 2014
2014, 2015
2.8%
4.0%
na
World Bank Global Economic
Prospects
May 2014
2014
2.4%
3.5%
3.9%
January 2014
2014
2.9%
na
na
2.4%
3.5%
4.0%
Government Medium-Term
Program (2014-2016)
BGC Istanbul
IBS
2015
IBS Base Case
June 2014
6.0%
4.0%
5.0%
5.0%
5.5%
2013-20
3.6% (4.3% before)
2021-35
3.7% (4%)
Source: IBS, June 2014 GDP growth figures are in volume terms.
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Introduction
iii Politics
Erdogan kicks off hard as President; general elections due by mid-2015
• On August 28, Recep Tayyip Erdogan, the Prime Minister, was sworn in as 12th President of Turkey. It
is a 5-year term and the Constitution allows him to be re-elected once.
• To date, the Presidency has been ceremonial. Even without amendments to the Constitution,
Erdogan is expected to change that. The President may convene the Council of Ministers under
his chairmanship and issue decrees having the force of law. He also presides over the National
Security Council.
• He says he wishes to strengthen the Council and has been persistently confrontational in his
stand toward his opponents. Turkey now has an authoritarian President.
• The governing AK Party held a congress on August 27, electing as its new leader Prof Ahmet
Davutoğlu, previously Minister of Foreign Affairs. Davutoğlu took over as Prime Minister, keeping most
of the former cabinet, including Taner Yildiz, Minister of Energy and Natural Resources.
• Erdogan had obtained 51.8% of the popular vote, compared with 38.4% for the opposition candidate,
Ekmeleddin İhsanoğlu, and 9.8% for the (Kurdish) Selahattin Demirtas. This was less than he wanted,
despite his being allowed to retain the Prime Ministry while he campaigned; his domination of access to
TV and radio; the formidable crowd-mobilizing resources of the AK Party; the half-hearted campaigning
for İhsanoğlu; and his massively greater election resources. The AK Party will look for a leader who
can win votes in the general elections due before June 2015 – and that may mean the former
President, Abdullah Gül.
• Gül has announced his intention to return to the party. Erdogan has said that it is natural Gül
should do this after his term finished, but leaving it open for the party to have a further congress
before the general elections.
• It will be a less stable period, with major changes expected in the economy team in 2015, a factor of
concern to the international financial community.
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Introduction
iv Southern borders
Key recent issues – A threatening world south of Turkey
Borders rubbed off the map
• From June 5, the Islamic State of Iraq and the Levant
(Isis) has advanced to control or operate with impunity
from near Baghdad to north west Syria - the most
powerful extreme jihadi group in the world.
• In September, its drive against the Kurds in northern
Syria caused 130,000 refugees to flee to Turkey.
• On September 20, Turkey recovered 49 hostages held
by ISIS since June. The release “raises fresh questions
about the relationship between the Turkish government
and Isis,” writes Patrick Cockburn in The Independent.
Erdogan is accused of supporting Isıs in 2012-13.
• Turkey initially refused to join western strikes on Isis,
but on September 23 Erdogan told NTV "We will give
the necessary support to the operation. The support
could be military or logistics,"
• Syria’s fragmentation has left Turkey with a lawless
area to its south – and 1.2 mn refugees to look after.
ISIS-dominated areas. September 22, 2014
• The whole Middle East has taken a step towards Shia-Sunni confrontation.
New alliances
• Iran has moved into the picture, being wooed by the US as negotiations continue on sanctions and nuclear controls.
• Syrian bombing near the Iraqi border welcomed by Baghdad
• The failure of the Iraqi army has brought the Shiite cleric Muqtadā al-Ṣadr and his military wing, the Jaysh al-Mahdi or
Mahdi Army, back on the stage.
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Introduction
v Exports
Exports to Middle East held up surprisingly well to June



In 2013, Turkish exports to the Near &
Mid East totalled $35.6 bn, accounting
for 23% of Turkey total. Main
countries were:
• Iraq $11.9 bn
• UAE $5.0
• Iran $4.2
In the first six months of 2014, the
total has hardly fallen – though there
was a drop in exports to Iran, possibly
because of a drop in golden exports.
Exports to Iraq are mainly to the
Kurdish region. They appear to have
started falling in July. Exports to Iraq
decreased 45% in July 2014 compare
to July 2013.
$ Bn
Turkish Exports to Near & Middle East,
January-July 2013-2014, $ Bn
20.0
Others, 2.0
15.0
Syria, 0.5
Israel, 1.5
S. Arabia, 2.1
Others, 2.3
Syria, 1.0
Israel, 1.8
S. Arabia, 1.8
Iran, 2.9
Iran, 1.8
10.0
UAE, 3.0
UAE, 2.9
Iraq, 6.6
Iraq, 6.4
2013 Jan-July
2014 Jan-July
5.0
0.0
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Fall in exports
to Iraq reported
in July
1. Forestry in Turkey
i Forests in Turkey
Forested area, being 27% of the land, remained slightly changed


Forest land in Turkey, 1999-2012 (Mn
hectares)
21 Mn hectares (27% of the land), which remained
slightly unchanged in the last 14 years
Slightly all forests are administered by the General
Directorate of Forestry (GDF), only 0.1% is private
forests
21.6
21.7
2010
2012
21.2
20.8
1999
2005
Broadleaved,
35%
Coniferous,
65%
Source: General Directorate of Forestry
Source: General Directorate of Forestry
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1. Forestry in Turkey
ii Wood supply
Roundwood consumption decreased to 14.4 Mn3, imports decreased by 32%
Industrial roundwood supply, Mn m3 2008-2013




18.0
Turkey used 15.4 Mn m3 of roundwood for
industrial purposes in 2012, of which only 1 Mn m3
was imported.
Industrial wood is mainly produced from coniferous
wood.
Imports, accounted for $150 Mn in 2012, are
dominated by the Ukraine.
Canada has not recently exported roundwood to
Turkey.
16.0
14.0
12.0
1.2
1.1
1.0
1.2
0.9
13.6
13.7
11.5
12.6
14.4
11.5
2008
2009
2010
2011
2012
2013
10.0
8.0
6.0
4.0
2.0
0.0
Total roundwood production
Turkey roundwood imports, 2008-2012, (000 m3)
Ukraine
Romania
Bulgaria
USA
Cameroon
Russia
Total
2008
593
61
6
11
14
425
1,239
2009
683
41
13
4
18
114
929
2010
905
40
32
6
30
115
1,174
2011
830
59
47
6
38
76
1,108
2012
766
63
47
42
13
15
1,008
Share
CAGR
2012 2008-12
76%
5.2%
6%
0.6%
5%
51.5%
4%
32.1%
1%
-1.9%
1% -49.1%
-4.1%
R e s e a r c h &
C o n s u lta n cy
Import
Source: General Directorate of Forestry, 2013, FAO,
TURKSTAT, 2014


Coniferous logs accounts for 85% of
roundwood imports.
In 2013, Turkish imports of round wood
has dramatically decreased to 686,000 m3
Source: Trademap, TURKSTAT, 2014
IBS
0.7
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2. Wood products in Turkey
i Introduction
$6 Bn market (excluding furniture) grew larger than the GDP
Wood products market size, 2008-2013 ($ Mn)
7,000
6,000
5,000
4,946
4,158
4,000
3,000
3,914
4,009
3,421
3,217
2,852
-
653
2008
Production
369
328
2009
2010
Imports
1,017
995
900
664
398
359
4,886
4,624
3,339
2,000
1,000
5,998
5,671
414
2011
Exports
424
2012
417
2013
Consumption
Source: IBS analysis based on FAO, TURKSTAT, 2014





IBS
R e s e a r c h &
C o n s u lta n cy
Sales of wood products (excluding furniture) reached $6 Bn in 2013, up from $4.2 Bn in 2008,
Apart from a drop in 2008 due to the global economic downturn, the sector has been growing
strongly.
Between 2008 and 2013, consumption of wood and wood products grew at an average 7.6% per
year.
This growth has been driven by developments in construction and the furniture industry.
Imports amounted to $1 Bn in 2012 - a figure which represents 17% by value of Turkish
consumption.
11
2. Wood products in Turkey
ii Growth forecast
Markets expected to grow higher than Turkish economy; driven by furniture and
construction
Market segmentation, 2012 (in value terms)
Others, 6%
Flooring, 3%
Fibreboard,
33%
Particle
board, 15%


 Other industries include solid flooring, builders’
carpentry and joinery, and accounted for 8% of
consumption in 2012.
Veneer, 2%
Source: IBS analysis based on FAO, TURKSTAT, 2014

 Fibreboard output grew by 12% annually between
2008 and 2012, reaching $1.9 billion in 2012.
 The high growth in laminated parquet production
was driven by the construction sector.
Sawn wood,
35%
Plywood,
7%
 Turkey is the third biggest producer of fibreboard in
the world and is also a significant producer of
particle board.
The market for wood and wood products is
forecast to grow at 6.7% per year to 2017
Fibreboard industry is expected to grow
slightly less than 9%
Plywood follows fibreboard with 8.4%
growth expectation due its wide range of
application areas
The markets for wood products in Turkey, 2013-2017 ($ Mn)
Consumption
Fibreboard
Particle board
Veneer
Plywood
Sawn wood
Flooring
Others
Total wood and wood products
Furniture
2013
2014
2,007 2,182
890
936
120
126
407
441
2,062 2,167
150 154.5
362
387
5,998 6,393
16,660 18,244
2015
2,372
985
133
477
2,278
159.1
414
6,818
19,983
2016
2,579
1,037
140
518
2,395
163.9
442
7,275
21,895
Source: IBS forecasts, 2014
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2017
2,804
1,093
148
563
2,519
168.8
473
7,769
23,995
CAGR
2013-17
8.7%
5.3%
5.4%
8.4%
5.1%
3.0%
6.9%
6.7%
9.5%
2. Wood products in Turkey
iv Geographical clustering
Industry concentrates in eastern Marmara and western Black Sea regions
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2. Wood products in Turkey
v Canada’s presence
Canada has an increasing share, still limited
Source: IBS analysis based on Trademap, TURKSTAT, 2014
 In 2013, Canada had a limited presence in the sector, being a supplier of wood chips, with exports to
Turkey of $34 Mn in 2013, and of sawn wood, with exports of $1.3 Mn.
 Wood chip exports to Turkey by Canada had been $50 million in 2012
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3 Opportunities
i
Sawn wood and round wood are of the highest opportunity followed by particle board,
veneer and wood furniture
Product name
Fibreboard
Particle board
Veneer
Plywood
Sawn wood
Flooring
Wood furniture
Other products
Potential
*
* * *
* **
* *
* * * *
* *
* **
Product name
Builder’s joinery and carpentry
Wood in the rough
Packaging materials
Other articles of wood
Builder’s joinery and carpentry
Potential
* *
* * * *
* *
* * *
* *
***** highest potential, * least potential
Product
Current situation
Case
Recomendation
Fibreboard
Turkish fibreboard imports
amounted to $302 million in 2013.
Of this total, only $73,000 were
imported from Canada
European companies have a
strong penetration of the
Turkish market
Cheaper transportation options
Particle
board
Turkish imports of OSB from
Canada amounted to $557,000 in
2012 which was less than one tenth
of the previous year. (0$ in 2013)
Turkey’s anti-dumping levy on
US and Canadian OSB
imports
Canadian companies to spend more
effort on lobbying the Turkish
Government to ease this trade barrier
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3 Opportunities
Product
ii
Current situation
Case
Recomendation
Turkey’s veneer imports from Canada in
2013 amounted to only $21,000.
Canadian red cedar is
highly appreciated due to
its resistance to water and
easy application
Offer alternative styles of veneer
(rustic, textured, glossy etc.)
Plywood
Turkey imported $56,000 of plywood
from Canada in 2012 (0$ in 2013)
Turkish plywood imports in
2013 totalled $326 million
the market appears open
to more Canadian
products.
There is demand for high-quality North
American (USA and Canadian origin)
plywood (cherry, walnut, and red and
white oak species)
Sawn wood
There were very limited exports of
Canadian sawn wood to Turkey in 2013
amounting to only 1,278 tonnes
Demand for high-quality North American (USA and Canada) oak
lumber, particularly in the furniture industry. Maple from Canada is a
preferred species for various areas
Wood
based
flooring
Flooring imports totalled $18 million in
2013.
IBS expects that the demand for higher quality flooring will increase
Wooden
furniture
A particular niche market for wooden kitchen cabinets and nursery furniture as areas which Canadians could
explore
Doors and
frames
Doors and door frames were other
important import items of Turkey with
$29 millionin 2013.
Veneer
IBS
R e s e a r c h &
C o n s u lta n cy
Canada’s share in these items has been limited; Canada exported
only joinery and carpentry products, as well limited quantities of
shingles and shakes.
16
4 Trends
Engineered sawn wood primarily for construction purposes is the future trend
There are opportunities for Canadian suppliers of value-added wood products such as prefabricated
housing, packaging and components for the joinery sector.
 Sawn wood has potential in specific areas such as western red cedar for facade siding as well as
veneer.
 Heat-processed sawn wood products (e.g. ThermoWood®*) will be more widespread
 Composite products
 Structural wood products
 There is increasing demand for decorative products
 Wood based toys are a growing area.
*
Thermowood is a thermal modification process developed in Finland using steam and high heat treatment to increase the durability of
wood. As a result of the high temperature, the substances which reduce the life of the wood, such as glucose, citric acid and resin are
removed or crystallized. This process improves the physical properties of the timber, the durability, and the colour. Only members of
the International ThermoWood Association may use the brandname ThermoWood with thermally modified timber.
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5 Regulatory issues
Anti-dumping on Canadian OSB imports hinders a huge opportunity
List of anti-dumping measures, 2014
Date of entry
into force
Expiry date
Duty
31.01.2012
31.01.2017
35%
Indonesia
31.01.2012
31.01.2017
25%
4410.12
4410.12
USA
Canada
18.12.2008
18.12.2008
18.12.2013*
18.12.2013*
24.10%
14.93%
Laminated flooring
4411.13.90; 4411.14.90
4411.92.90; 4411.93.90
China
30.07.2008
30.07.2013*
1.60 - 2.40
$/m2
Plywood
4412.10; 4412.31;
4412.32; 4412.39
China
10.07.2012
10.07.2017
240 $/M3
Product name
Pre-finished engineered laminated flooring
HS code
4418.72.00.00.00
Target
country
China
Pre-finished engineered laminated flooring
4418.72.00.00.00
Oriented Strand Board (OSB)
Oriented Strand Board (OSB)
Source: Ministry of Economy, 2014 * Extended pending investigation of further complaint
 For particle board and OSB products, US and
Canadian exports are subject to an anti-dumping
duty of 24% and 15% respectively.
 Original expiry date of the anti-dumping levy on
OSB imports from Canada and the USA was the
end of 2013 (under investigation)
Current anti-dumping investigations, 2014
Target
Investigation
Product name
HS code
country
start date
4411.13.90
4411.14.90
Laminated flooring
Germany
18.12.2013
4411.92.90
4411.93.90
Oriented strand board (OSB) 4410.12
USA
13.12.2013
Oriented strand board (OSB) 4410.12
Canada
13.12.2013
4411.13.90
4411.14.90
Laminated flooring
China
25.07.2013
4411.92.90
4411.93.90
Source: Ministry of Economy, 2014
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6 Recommendations
Canada’s good image needs to be strengtened collaboratively
 Canada has a good market image; shares in the market could be increased
Measure
Government
Sector associations
Manufacturers
Lobbying for trade barriers &
procurement opportunities
***
**
*
Trade facilitation tools
***
**
*
Product differentiation
*
**
***
**
***
***
Promotion
*** most responsibility, * least responsibility
By Canadian Government
Challenge claims for the extension of anti-dumping
measures currently in force against OSB.
Enhance trade facilitation measures to promote
Turkish imports from Canadian companies
by trade associations and manufacturers
Participate in wood promotion campaigns in Turkey
Set up joint transportation activities
Stay ahead of technological changes in the industry
Initiate trade missions and visits, e.g “Team Finland”
Allocate funds for inviting Turkish companies
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A.1 Fibreboard
i Overview
Turkey, 3rd largest fibreboard producer in the world
Overview
• Third largest producer in the world
• In 2012 Turkey produced 2 million m3 fibreboard, having a 12% share in total world output.
• Growth in the last five years was 15% per year
Production
• 20 production facilities with an annual capacity of 5.7 Mn m3.
• MDF production accounted for 99% of fibreboard production in 2012
Raw
material
• Woodchip is the main raw material for the fibreboard industry.
• Major woodchip supplier of Turkey is the USA, having 40% of all imports. Canada has 16% share in
value
Imports
• In 2013, import amounted to $302 Mn. Germany, Romania and Italy constituted 82% of such imports
in value.
• Imports from Canada were only $100,000
Fibreboard products distribution chain
IBS
R e s e a r c h &
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Fibreboard domestic sales prices, 2008-2013, $/m3
Source: IBS estimates
20
A.1 Fibreboard
ii Forecast & opportunities/threats
Forecast to grow 8.7% per year, driven by laminate parquet
Fibreboard industry forecasts, 2013-2017
CAGR
2017f 2013-17
5,631
7.0%
2,703
8.0%
2013e
4,296
1,987
2014f
4,597
2,146
2015f
4,919
2,318
2016f
5,263
2,503
Exports (000 m3)
Exports ($’000’)
584
282
613
298
644
314
676
331
710
350
5.0%
5.5%
Imports (m3)
Imports ($’000)
602
302
662
334
728
369
801
407
881
450
10.0%
10.5%
4,314
2,007
4,646
2,182
5,003
2,372
5,388
2,579
5,803
2,804
7.7%
8.7%
Production (000 m3)
Production ($’000)
Consumption (000 m3)
Consumption ($’000)
(e) estimate (f) forecast
Source: IBS forecasts based on interviews with market players
Opportunities
Developments of furniture and construction
Preference of laminate parquet by Turkish
contractors and end-users for building
renovation
Export markets in the Middle East
Threats
Health and environmental concerns on
laminate parquet
Higher raw material price in Turkey
Cheap imports from Germany, Romania and
Switzerland
 IBS forecasts that fibreboard demand will increase to $2.8 Bn by 2017
 Exports too are expected to grow relatively slowly due to a decline in prices in Turkey’s target export
markets, economic uncertainties in Europe, and possible political turmoil in the Arab region.
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A.1 Fibreboard
iii Canadian presence
Market is open only to high quality Canadian MDF panels and laminate parquet
Turkish fibreboard imports from Canada, 2008-2013 (quantity and value)
Code
Product name
441114
441192
441194
MDF of wood thickness > 9 mm
Fibreboard of wood or other ligneous materials, whether or not agglom.
Fibreboard of wood or other ligneous materials, whether or not agglom.
441114
441192
441194
MDF of wood thickness > 9 mm
Fibreboard of wood or other ligneous materials, whether or not agglom.
Fibreboard of wood or other ligneous materials, whether or not agglom.
2008 2009 2010 2011 2012 2013
Tonnes
47
235
67
-
88
-
1
263
-
-
3
44
-
55
237
77
-
119
-
17
426
-
5
-
7
66
-
$’000
Source: Trademap, TURKSTAT, 2014 Note: nes – not elsewhere specified
 In 2013, fibreboard imports amounted to $302 Mn of which only $73,000 was sourced from Canada
 European companies, in general, have built up a strong position in the Turkish market.
 Geographical proximity and relatively competitive pricing are the main challenges
 The Canadians could think about cheaper transportation options: “Turkey is open to high quality
products.”
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A.2 Particle board
i Overview
Particleboard imports dominated by Oriented Strand Board (OSB)
Overview
• Seventh largest producer in the world
• In 2012, Turkey produced 4 million m3 particleboard, having a 6% share in total world output.
• Growth in the last five years was 6% per year
Production
• 21 production facilities with an annual capacity of 5.5 Mn m3.
• Two relatively small Turkish producers have the ability to produce OSB
Raw
material
• The main raw materials for production of fibre board and particle board are similar
• Ongoing researches for alternative raw materials, e.g. using soy-based resins
Imports
• Imports are mostly oriented strand board (OSB) supplied from Romania and Bulgaria - 85%
Particle board distribution chain
Particle board domestic sales prices, 2008-2013, $/m3
Source: IBS field research
IBS
R e s e a r c h &
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A.2 Particle board
ii Forecast & opportunities/threats
Particleboard imports dominated by OSB
Opportunities
Wide range of usage areas
New developments in production technology
would introduce newer uses
Cement-based particle board will also be
particularly popular
OSB is expected to become a substitute for
plywood.
Threats
The industry is vulnerable to imports due to the
cost advantage of imports from Eastern
European countries
 Overall consumption will reach $1.1 Bn in
2017, with a CAGR of 5.3% during the period.
 No significant capacity increase is excpected.
 Canadian OSB exports to Turkey amounted
to $6.4 Mn in 2011.
IBS
R e s e a r c h &
C o n s u lta n cy
24
A.3 Veneer
i Overview
Veneer imports growing larger than local production
Overview
• Turkey is a minor producer of veneer, with production in 2012 of 85,000 m3
Production
• Production has been declining slightly, by 2% per year during the last five years.
• There are 20 companies in the veneer industry in Turkey with a total capacity of 178,000 m3
per year.
Species
• Beech, chestnut, mahogany, birch, various oaks (American, red, milling and European),
rosewood, American cherry, Canadian maple (often referred to as North American maple in
Turkey)
• Canadian maple is largely preferred due its technical specialties and color options
Imports
• Turkish imports of veneer totalled $41.2 Mn and 41,400 tonnes in 2013.
Veneer distribution chain
IBS
R e s e a r c h &
C o n s u lta n cy
Veneer domestic sales prices, 2008-2013, $/m3
25
A.3 Veneer
ii Forecast & opportunities/threats
Local veneer production does not respond to furniture industry’s expectations
Opportunities
Veneer industry forecasts, 2013-2017
CAGR
2017f 2013-17
89
1.0%
107
0.9%
2013e
86
103
2014f
87
104
2015f
88
105
2016f
88
106
Exports (000 m3)
Exports ($ Mn)
29
24
29
24
29
24
29
25
30
25
1.0%
1.0%
Imports (m3)
Imports ($ Mn)
72
41
80
46
89
52
99
59
111
66
11.6%
12.7%
129
120
138
126
147
133
158
140
170
148
7.3%
5.4%
Production (000 m3)
Production ($ Mn)
Consumption (000 m3)
Consumption ($ Mn)
(e) estimate (f) forecast
Source: IBS forecasts based on interviews with market players
High-definition textured laminates have
begun to be more popular in the market.
Veneers from ash and oak area highly
demanded by their industry.
The demand for retro designed furniture is
currently increasing
Increasing demand for high-quality American
species such as cherry, walnut, and red and
white oak, and Canadian maple
Turkish veneer manufacturers can not
respond to expectations of the furniture
industry.
 Companies in the sector and experts forecast that the sector will grow in parallel with the Turkish
furniture industry.
 IBS expects domestic consumption to reach $148 Mn by 2017, with a CAGR of 5.4% in value and of
7.3% in volume terms.
IBS
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C o n s u lta n cy
26
A.3 Veneer
iii Canadian presence
Turkish market is open to high quality and innovative Canadian veneer species
Turkish veneer imports from Canada, 2008-2013 (quantity and value)
Code
440810
440890
440810
440890
Product name
Tonnes
Veneer, coniferous (softwood) less than 6 mm thick
Veneer, non-coniferous nes, less than 6 mm thick
$’000
Veneer, coniferous (softwood) less than 6 mm thick
Veneer, non-coniferous nes, less than 6 mm thick
2008
2009
2010
2011
2012 2013
0
105
0
38
0
18
1
5
0
0
4
0
0
449
0
118
0
22
13
21
0
0
21
0
Source: Trademap, TURKSTAT, 2014 Note: nes – not elsewhere specified
 Canada’s veneer exports to Turkey are a minimal share of its overall exports to the world of $250 Mn
and of Turkish veneer imports of $41 Mn. By contrast, the USA is Turkey’s second largest veneer
supplier in value terms, selling $8.1 Mn in 2013.
 The main product that Canada exported to Turkey was non-coniferous wood veneer, mostly of maple.
 The profile of Canada is limited in contrast with the high reputation of Canadian supplies.
 The more rapid growth of imports than of production indicates that consumers are looking for new and
alternative products in this area.
IBS
R e s e a r c h &
C o n s u lta n cy
27
A.4 Plywood
i Overview
73% of local plywood demand is met through imports
Overview
• Turkey had a plywood market of $382 Mn (369,000 m3) in 2012.
• Domestic production contributed $97 Mn (116,000 m3) of this, while 73% of demand was met
by imports.
Production
• Production of plywood was 116,000 m3 in 2012 (0.9% in world production).
• 55 companies manufacture plywood and have a total capacity of 250,000 m3/year,
Raw
material
• The plywood manufactured in Turkey is produced from poplar, beech, pine, eucalyptus and
redwood
Imports
• In 2012, Turkey imported 189,000 tonnes of plywood. Russia and Ukraine were the top two
exporters to Turkey
Plywood distribution chain
IBS
R e s e a r c h &
C o n s u lta n cy
Plywood domestic sales prices, 2008-2013, $/m3
28
A.4 Plywood
ii Forecast & opportunities/threats
Plywood consumption to grow 9% annually fed by mainly imports
 In 2013, plywood exports reached $17 Mn and imports
were $326 Mn.
 Domestic consumption is forecast to reach $563 Mn in
2017
 Demandwill rise from industries such as construction,
transportation vehicles, packaging, and furniture.
 There has been virtually no plywood trade between Turkey
and Canada.
 There is demand for specialty high quality North American
(US and Canadian origin) plywood
Opportunities
The industry will continue to have a positive
growth in the next five years, forecasted at 9%
annually
Local producers supply only 20-25% of total
domestic demand
Threats
OSB will be an important substitute for plywood,
particularly in the construction
IBS
R e s e a r c h &
C o n s u lta n cy
29
A.5 Sawn wood
i Overview
Sawn wood continues to be huge market for import ~$200-250 Mn
Overview
• Turkey is an important user of sawn wood, using about 7.6 Mn m3 of wood each year.
• Consumption has increased significantly in recent years, reflecting the growth in construction
Production
• Turkey was the world’s 14th largest producer of sawn wood in 2012, with 6.7 Mn m3 total
production, and 1.6% of total world output according to the FAO.
• +600 companies (saw mills) in the industry, capacity is 13.6 million m3
Raw
material
• 65% of the sawn wood produced in Turkey is from coniferous trees.
• Main domestic species are softwood species like pine (Scotch pine, Calabrian pine, Black
pine), spruce, fir and poplar.
• Oak and iroko are the preferred imported hardwood species in Turkey
Imports
• Imported 632,046 tonnes of sawn wood in 2013, a 47% increase on imports in 2008 (8% per
year)
• Sawn wood imports from the United States and Canada are increasing
Sawn wood distribution chain
IBS
R e s e a r c h &
C o n s u lta n cy
Sawn wood domestic sales prices, 2008-2013, $/m3
30
A.5 Sawn wood
ii Forecast & opportunities/threats
Sawn wood consumption goes with slightly parallel to Turkish economy
 Consumption was some $2 Bn and is estimated to
be be $2.5 Bn by 2017 with 5.1% growth annually.
 Canadian sawn wood exports to Turkey amounted to
only 1,278 tonnes in 2013.
 One apparent opportunity is in sawn oak lumber. In
2013, Turkey imported 18,300 tonnes of this. Only
31 tonnes of sawn oak lumber came from Canada,
while 5,500 tonnes came from the USA.
Opportunities
Industry sources state that production is
expected to increase by 4%
Construction will continue to be the main
driver of sawn wood demand.
Threats
Sawn wood competes with alternative
building materials, for example, concrete and
steel.
IBS
R e s e a r c h &
C o n s u lta n cy
31
A.6 Flooring
i Overview
Limited growth is expected for flooring
Overview
• Relatively slow growth due to increasing usage of cheaper alternative flooring options
• The market was estimated at $150 Mn in 2013 and is forecast to be $170 Mn in 2017
Production
• 90% of flooring producers are manufacturing it using sawn wood.
• The leading manufacturers of wood products in Turkey are also active in flooring
production.
Raw
material
• Home-grown species used in local manufacturing include oak, European beech and red
pine.
• Sapele and iroko are the main tropical species used.
Imports
• Turkey imported 11,270 tonnes of flooring in 2013 valued at $17.8 Mn.
Flooring industry distribution chain
Flooring industry growth forecast 2013-2017, $ Mn
Production
Exports
Imports
Consumption
2013e
153.0
20.9
17.8
150.0
2014f
157.1
21.3
18.6
154.5
2015f
161.4
21.7
19.5
159.1
CAGR
2017f 2013-17
170.1
2.7%
22.6
2.0%
21.3
4.6%
168.8
3.0%
2016f
165.7
22.1
20.3
163.9
(e) estimate (f) forecast
Source: IBS forecasts based on interviews with market players
IBS
R e s e a r c h &
C o n s u lta n cy
32
A.6 Flooring
ii Canadian presence
High end flooring market is open to high quality Canadian oak and maple
Turkish wood-based flooring imports from Canada, 2008-2013 (quantity and value)
Code
440910
440929
440910
440929
Product name
Tonnes
Wood (lumber) continuously shaped coniferous (softwood)
Wood, incl. strips and friezes for parquet flooring
$’000
Wood (lumber) continuously shaped coniferous (softwood)
Wood, incl. strips and friezes for parquet flooring
2008
2009
2010
2011
2012 2013
21
0
3
0
21
0
51
5
0
0
0
0
48
0
10
0
41
0
51
41
0
0
0
0
Source: Trademap, TURKSTAT, 2014 Note: nes – not elsewhere specified
 The main product that Canada exported to Turkey was coniferous wood lumber for flooring.
 Turkey’s flooring imports from Canada reached $51,000 in 2011. In the same year Canada made $159 Mn
worth of global flooring sales in which Turkey’s share was negligible.
 Given that Turkish flooring imports in 2011 were $16 Mn, this is an open market for Canadian manufacturers,
particularly in high quality flooring products.
 Flooring parquet from Canadian oak in particular is considered as high quality in the market.
 Given Turkey’s hardwood flooring imports increased to $10.6 Mn in 2013, maple from Canada also
represents another opportunity to Canadian wood industry.
IBS
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C o n s u lta n cy
33
2.7 Furniture
ii Canadian presence
Furniture will continue to be catalyser for various wood industries
Overview
• Industry production performed a stable growth of 16% CAGR in value terms, reaching $16.3
Bn
Imports
• In the last 10 years, the value of Turkey’s furniture imports has been at a decreasing rate. In
2012, Turkish imports amounted to $817 Mn – equivalent to 43% of exports.
• Wooden furniture and parts constitute nearly one-third of total furniture import in value.
• Kitchen furniture has had the largest decrease in the same period from $45 Mn to $21 Mn
• Germany and Italy are the major suppliers of office and kitchen furniture,.
Furniture industry distribution chain
Furniture industry growth forecast 2013-2017, $ Mn
Production
Exports
Imports
Consumption
CAGR
2013e 2014f 2015f 2016f 2017f 2013-17
17,897 19,651 21,577 23,692 26,014
9.8%
2,066 2,248 2,446 2,661 2,895
8.8%
829
840
852
864
876
1.4%
16,660 18,244 19,983 21,895 23,995
9.5%
(e) estimate (f) forecast
Source: IBS forecasts based on interviews with market players
IBS
R e s e a r c h &
C o n s u lta n cy
34
A.7 Furniture
ii Canadian presence
An open space to Canadian wooden furniture nanufacturers, ~$200-250 Mn import
Wood furniture imports from Canada ($’000)
Code
'940161
'940169
'940360
'940350
'940340
'940330
Product name
Seats with wooden frames, upholstered nes
Seats with wooden frames, nes
Furniture, wooden, nes
Bedroom furniture, wooden, nes
Kitchen furniture, wooden, nes
Office furniture, wooden, nes
TOTAL
2008
28
0
1
0
0
0
29
2009
1
5
2
2
0
0
6
2010
0
0
64
0
0
0
66
2011 2012
0
0
25
0
625 373
11
0
0
0
2
0
643 373
2013
35
0
126
1
0
0
161
Source: Trademap, TURKSTAT, 2014 Note: nes – not elsewhere specified
 There is an increasing trend of Canadian wood furniture exports to Turkey until 2011.
 In 2013, USA wooden furniture imports to Turkey amounted to $3.6 Mn, USA products imported in
2013 were:
o $1.9 Mn for seats with wooden frames, upholstered (HS code 940161)
o $203,000 for seats with wooden frames (HS code 940169)
o $115,000 for wooden office furniture (HS code 940330)
o $326,000 for wooden bedroom furniture (HS code 940350)
o $1.1 Mn for other wooden furniture (HS code 940360)
IBS
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35
A.8 Other Industries
Joinery and carpentry is open, being still competitive
 Sector is fragmented and the size
of this sector is around $175 Mn
 Doors and door frames, as well as
other joinery and carpentry
products, were also important
import items of Turkey with $29
Mn and $12 Mn import value
respectively in 2013 and 2012
 While Turkey imported $15 Mn in
joinery and carpentry products,
Canada’s share in this item was
2%
 In 2012, Turkey imported $62,000
in value of shingles and shakes,
with Canada’s share being 90%.
IBS
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C o n s u lta n cy
36
B. Value chain
Panel industry dominates the market
Source: IBS analysis based on field research and secondary data
IBS
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37
C. Trade with Canada
Wood chip: Almost the only material coming from Canada, 97% of all import
Bilateral trade between Turkey and Canada, 2013, $ Mn
Product
HS code
'4412
'4411
'4407
'4401
'4410
'4403
'4418
'4408
'4402
'4421
'4409
'4419
'4420
'4413
'4415
'4414
'4417
'4405
'4416
'4406
'4404
Product name
Plywood
Fibreboard of wood or other ligneous materials
Wood sawn/chipped lengthwise, sliced/peeled
Wood in chips or particles;
Particle board and similar board of wood
Wood in the rough
Builders' joinery & carpentry of wood
Veneer sheets
Wood charcoal (including shell or nut charcoal)
Articles of wood, nes
Wood continuously shaped along any edges
Tableware and kitchenware of wood
Wood marquetry & inlaid wood; caskets &
Densified wood, in blocks, plates, strips or profile shapes
Packaging materials of wood
Wooden frames for paintings, photographs, mirrors etc
Tools, tool & broom bodies & handles,
Wood wool; wood flour
Casks,barrels,vats,tubs etc. of wood
Railway or tramway sleepers (cross-ties) of wood
Hoopwood; split poles; piles, pickets, stakes;chipwood
Total
Canadian
exports
to the
world
222.6
237.0
7,443.6
342.9
1,472.6
886.5
901.0
246.4
1.5
343.6
125.4
3.6
10.3
0.5
87.4
6.6
2.7
0.7
4.5
3.2
5.6
12,348.4
Imports
of Turkey
from the
world
325.8
301.9
238.4
207.6
110.4
107.6
97.5
41.2
33.0
30.1
17.8
11.6
10.4
9.9
9.3
3.9
2.3
2.2
1.4
0.9
0.8
1,563.6
Imports of
Turkey
from
Canada
Share of
Turkish
imports from
Canada
0.0%
0.0%
0.6%
16.4%
0.0%
0.0%
0.3%
0.1%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.3%
0.1
1.3
34.0
0.0
0.3
0.0
0.0
0.0
35.8
Source: IBS analysis based on Trademap, TURKSTAT
IBS
R e s e a r c h &
C o n s u lta n cy
38
Questions & answers session
Fatih ALTUNKAYNAK, Project Manager, [email protected]
Hüseyin CELEBI, Research Director, [email protected]
+90 212 252 2460
IBS
R e s e a r c h &
C o n s u lta n cy
39
Copyright & legal status
1.
•
•
2.
•
3.
•
4.
•
5.
•
IBS
R e s e a r c h &
C o n s u lta n cy
The Purpose of This Report
This Report has been prepared by IBS Beynelmilel İş Hizmetleri AŞ, trading as IBS Research & Consultancy
(“IBS”), as a general outline of certain aspects of the business environment in Turkey as of the date of this Report.
Notwithstanding anything contained herein, this Report is not intended to provide the basis of any investment, credit,
legal, regulatory, accounting, taxation or other evaluation or decision and should not be considered as
(i) a recommendation by IBS that any person enter into any relationship or transaction with IBS or any other person
or (ii) advice by IBS with respect to any matter whatsoever.
Status of Information
Nothing outlined in this Report is, or should be relied upon as, a promise or forecast of the future. The information
contained herein is provided on a best-endeavour basis and, IBS believes, is drawn from the best sources available.
IBS indicates where it is making estimates. IBS is under no obligation to update material provided in this report.
Disclaimer
Notwithstanding anything contained in this Report, IBS is not nor holds itself out to be, an advisor as to legal,
taxation, accounting, regulatory, investment or credit matters. IBS further recommend that each recipient of this
Report takes its own independent advice with respect to all of the matters referred to in this Report. Accordingly,
neither IBS nor any of its directors, officers, employees or representatives shall incur any responsibility or liability
with respect to any action, omission, statement, recommendation or comment made in this Report or made by any
of them in connection with any matter referred to in this Report.
Other Relationships
IBS may have business relationships with one or more persons or companies referred to in this Report and it may
that by reason IBS may have information bearing on this Report and the facts and transaction(s) described herein
which IBS is unable to disclose.
Reproduction and Reprinting
Usage of the report is subject to the Service Agreement between Natural Resporces Canada and IBS of October 31,
2013. The Client is free to use this report within its own organization and to its member organizations and/or
stakeholders, provided that any material extracted from this report is clearly attributed to IBS and is not more widely
published.
40