India’s wood company sets new unit in Africa begins commercial production

India’s top wood furniture company has recently announced that its subsidiary has newly set up veneer manufacturing unit in Africa and has started its commercial production. The newly set up veneer manufacturing unit of the company's wholly-owned subsidiary at Gabon in Africa, has successfully started its commercial production, stated top company official.

The company further mentioned that the unit has an operating capacity of peeling 200 cubic meters of timber per day and will be initially manufacturing face veneer and core veneer.

Shares of the said company were trading 3.47% higher at Rs 283.15 apiece on BSE.

In East Africa, the chief use of wood is in carpentry for the manufacture of furniture such as chairs, tables, cupboards, doors, window frames, etc.

The wood panel industry stands as an important place and is experiencing a progressively important development in East Africa.

Recent reports proposes that Africa will increasingly become a large net importer of wood products, as opposed to a net exporter. Africa had now commenced to experience a wood supply crisis, particularly near population centres close to the coast. Further adding to the implications for Africa itself, this advancement will have substantial ramifications for wood markets elsewhere, including trade flows and pricing.

There are 2 major mechanisms to wood consumption in Africa, one is fuel wood and the other industrial round wood. At Present, the overall consumption of wood in Africa is about 700 million cubic meters (m3) per year, with around 75 million m3 consumed for industrial wood products and the remaining 625 million m3 consumed for fuel wood. In fact, Africa accounts for more than 1/5 of the total 3.5 billion m3 annual global demand for wood.

Among the diverse industrial wood products, the growth in demand for paper, packaging and panels in Africa has been even robust than the demand for sawn wood. African demand for forest products has been predominantly strong during the last 12 years when its economies grew at a primarily strong rate.

A fresh global study by the consulting group Indufor projects demand for industrial wood in Africa to grow from 75 million m3 in 2010 to 300 million m3 by 2030, with a compounded annual growth rate of 7.1%.

The African middle class is mounting speedily, as Goldman Sachs recently reported in detail that this rise in incomes will cause mandate for numerous wood products, such as housing and furniture. McKinsey has mentioned that Africa is experiencing high urbanization rates and this in turn will also increase demand for housing, furniture and infrastructure, with wood being an important structural component. Based on the reports, a continued high growth rate for industrial wood in Africa is highly anticipated.

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