4.

RUBBERWOOD UTILIZATION Before rubberwood found a use in timber and timber products, felled trees were almost exclusively used as fuelwood and charcoal in many countries. A significant share of rubberwood production is still used for these purposes - almost 20 percent during the early 1990s in Malaysia (see Figure 8). Rubberwood charcoal was used extensively in the steel industry, rubber processing, tobacco curing and brick manufacturing.

Figure 8 Flow of rubberwood logs and primary products in Malaysia in 1992 All figures are in `000 m3. Source: Kollert & Zana, 1994; source of figures: Malaysia Timber Industry Board (1993) and calculations by Kollert & Zana. Since the 1980's, however, rubberwood has gradually established itself as a major wood product in several countries, particularly for the production of furniture, furniture components and wood panels. Rubberwood plywood is used for both construction and decorative end uses. More recently, medium density fibreboard (MDF), particleboard and oriented strand board (OSB) have also joined the list of products derived from rubberwood and sawmill waste. Figure 8 illustrates the flow of rubberwood logs and primary products in Malaysia in 1992 (Kollert & Zana, 1994). It illustrates that of the total log supply, sawmills took up almost 60 percent of the volume, followed by 40 percent consumed in the market for small diameter logs. The authors add a word of caution concerning the high recovery rate (47 percent) in the production of sawnwood from sawlogs. In an earlier study, Sim (1989) had found recovery rates ranging from 21 to 32 percent. In a 1987 study on rubberwood utilization in Thailand, the authors found that 40.04 percent of total rubberwood utilization was for wood products (furniture and furniture parts, cable reels, pallets, wooden boxes, picture frames, tooth picks, ice cream sticks, household utensils, wooden toys and some miscellaneous products); 30.43 percent for fuelwood; 16.68 percent for particle board; 11.02 percent for charcoal; and 1.83 percent for poles and piles (mostly for construction purposes).

4.1 Industrial processing of rubberwood

4.1.1 Primary industrial processing Rubberwood logs are mostly used in the sawmilling sector. Out of a total of 4.6 million m3 sawlogs produced in 1991, sawmills took around 80% of total log production (3.5 million m3) and the wood based panel industry took the remainder. However, use in the wood based panel sector is rapidly expanding, although chipboard, cement board, MDF and OSB rely primarily on small diameter logs. Some statistics showing are given in Table 18 that show the scale of rubberwood sawnwood exports from Malaysia. Table 18 Malaysian export of rubberwood sawnwood to major countries* 1984 Country of Destination Taiwan Japan USA Belgium Singapore Netherlands China S. Korea Others Total Volume (m3) Value 1991 Volume Value 1992 Volume Value 1993 Volume Value 1994 Volume Value

(RM (RM (RM (RM (RM (m3) (m3) (m3) (m3) million) million) million) million) million) 19,735 6.0 45,463 29.4 20,332 11.8 17,735 11.4 32,059 24.7 13,137 167 61,994 239 254 98 140 95,764 4.0 0.1 18.8 0.1 0.1 ** ** 29.1 7,689 226 619 14,904 0 0 1,542 818 71,261 5.9 0.2 0.5 5.5 0.0 0.0 0.6 0.6 42.7 6,936 606 405 9,284 461 161 648 38,833 5.1 0.4 0.3 4.6 0.4 0.1 0.4 23.1 4,552 1,533 1,128 1,195 128 35 1,314 27,620 3.5 1.2 0.9 0.8 0.1 ** 0.8 18.7 3,667 1,305 463 2,381 442 4,980 45,297 3.6 1.3 0.4 1.5 0.4 4.0 35.9

* In order to encourage downstream processing, an export quota was introduced in 1990 and the export of sawnwood was completely banned in January 1994; the year before the introduction of the export restrictions in 1990, the export volume was 221,367 m3 (anonymous quoted in Kollert & Zana, 1994) ** Less than 0.1 million m3 Source: Malaysian Rubber Board. When logs are delivered to the sawmill, long transport distances have to be avoided because of the high possibility of insect and fungal attacks. For this reason, Indufor in 1993 estimated that only 80 percent of total rubberwood are economically available in Thailand in Malaysia, 45 percent in Indonesia and 90 percent in India and Sri Lanka, the latter due to the general scarcity of wood raw material, well-functioning smallholder organizations and effective replanting systems. Sawing and chemical treatment is often carried out immediately after harvesting. A typical rubberwood sawmill is small, with a sawnwood recovery rate of 15-35 percent; it is estimated that the average recovery rate is around 25 percent. In general these low recovery rates are the result of the use of inappropriate technology to process small dimension logs such as those produced by the rubber tree. Portable sawmills are common, especially in Malaysia, but are less common in Thailand where their use is restricted to deter illegal harvesting. Rubberwood mills are labor intensive and logs are often loaded manually and fed through saws by hand. Sawmills integrated with drying facilities are more capital intensive and produce most of the sawnwood used for export or by the mills producing export products such as furniture, parquet flooring and other wooden articles.

In the wood based panel industry, rubberwood plywood has proved to be a potential high value end use, provided that appropriate technology is used. The rubber tree is also extremely well suited as a raw material for the production of particleboard and MDF. In 1998, the Forest Research Institute of Malaysia successfully carried out laboratory scale trials to produce Heveawood OSB.1 Strands were sliced from small diameter rubberwood logs and bonded together under heat and pressure using phenol formaldehyde and isocyanate as exterior grade adhesives. The amount of adhesives was found to be about half of what is necessary for particleboard. Rubberwood in the form of small logs, off-cuts, edges, slabs and branches is used for particleboard manufacture. Some particleboards are laminated with overlays of a wide range of colors and patterns. This product is sought after by the furniture manufacturers for making wardrobes, cabinets, tables, chairs, partitions and kitchen cabinets. The properties of a series of particleboard samples from rubberwood are given in Table 19. The results indicate that particleboards of 19 mm thickness using 8 percent resin and 1 percent wax possess properties exceeding the specifications of the British Standard (Yusoff, 1994). Table 19 Properties of single-layer particleboards made from rubberwood flakes Sample A B C BS Type 1 Density (kg/m3) 552 626 682 MOR (MPa) 14.2 19.8 25.8 13.8 (min.) Internal bond Screw withdrawal Thickness swelling (MPa) (N) (%) 0.38 0.65 0.68 0.34 (min.) 853 960 1303 360 (min.) 6.0 4.8 3.3 12.0 (max.)

Note: MOR: modulus of rupture or bending strength; pressing temperature: 140C; pressing time: 10 minutes. Source: Wong & Ong, 1979. Since rubberwood is readily attacked by fungi and insects, wood chips are easily discolored during storage. The manufacture of MDF with urea formaldehyde resin requires that chips be used within four weeks, preferably fresh, in order to maintain the expected strength properties of MDF (Razali & Diong, 1992). Boards made from fresh chips and urea formaldehyde have been found to attain the minimum bending strength (MOR) requirement of JIS A-5906-1983 type 200. However, the internal bond in MDF tests was exceptionally high at about 16 kg/cm2. The color of the boards varied from yellowish-cream to dark gray depending on the age of the raw material. MDF of acceptable quality could be made from rubberwood that has been stored up to three months with different treatments of fungicide and insecticide (Khoo et al., 1991). Past concerns about the rubber tree's latex content, which is an undesirable substance when producing MDF board, have been alleviated with the fine-tuning of processing technology that allows the separation of latex clumps from wood fibers before pressing. The results of some tests on rubberwood MDF are given in Table 20. Table 20 Properties of rubberwood MDF Cook number 1 Density (g/cm3) 0.513 0.602 0.703 MOR MOE x 1000 IB (kg/cm 2 (kg/cm2) (kg /cm2) ) 88 9.6 4.1 148 216 17.1 20.7 5.7 10.9 TS (%) 13.2 14.7 14.3

0.501 0.608 0.707

95 189 276 103 180 274

9.4 17.6 23.2 10.7 17.7 24.8

5.1 5.8 10.2 5.1 6.6 11.2

10.5 10.9 11.1 9.3 10.4 10.3

0.506 0.598 0.710

JIS A-59061983 150type 200type 0.4-0.8 150 200 3.0 4.0 12.0 (max.) "

Note: MOR = modulus of rupture, MOE = modulus of elasticity, IB= internal bond, TS = thickness swelling after 24 h water soak. Source: Tomimura et al (1990). The particleboard industry in Southeast Asia, which comprised 16 mills in 1995, uses off-cuts, trimmings, slabs and small logs of rubberwood and therefore provides an outlet for the less marketable part of the tree. Rubberwood particleboard is usually overlaid with a laminate and is used extensively by the furniture industry. The number of MDF plants using rubberwood has increased rapidly since 1992 (see Table 21). MDF plants in Thailand, Malaysia and Indonesia consumed some 0.7 million m3 of rubberwood logs in 1994, but it is expected that this demand will rise to 1.5 million m3 in 1997. This rapid increase in demand may result in greater competition for rubberwood trees and upward pressure on prices. Some statistics for rubberwood processing in China are given in Table 22. Table 21 Existing and projected capacity of MDF plants in 1996 Country Current Number Volume of wood of mills fibre used (m3) Thailand All MDF mills Rubberwood MDF mills Malaysia All MDF mills* Rubberwood MDF mills Indonesia All MDF mills Rubberwood MDF mills 6 1 531,200 83,000 9 3 1,261,600 538,000 Projected until 1997 Number of mills Volume of wood fibre used (m3)

5 5

597,600 597,600

6 2

913,000 182,600

1 0

162,000 0

7 1

1,131,000 185,000

* As of 1999, Malaysia had added a seventh MDF plant. Source: M.M.F. Table 22 Secondary rubberwood processing and utilization in China in 1994

Item Log production (m3) Sawnwood production (m3) No. of sawnwood plants Plywood production (m3) No. of plywood plants Particle board production (m3) No. of particle board plants No. of model product plants Source: ITTO (1995).

Hainan 180,000

Yunnan 20,000-30,000

Guangdong /

62,185

7,000

15

23,151

5,000

3,000

10

28,000

4.1.2 Secondary industrial processing Rubberwood's good working qualities for machining, acceptable durability, light natural color and adaptability in accepting paints and other finishes, makes it an ideal wood for furniture. The advantages of rubberwood in furniture making are believed to compensate for the recognized problems of variations in color and density but the need remains for preservation and drying treatment in order to avoid problems of discoloration or bowing and twisting of the wood when the moisture content of the wood rises above 10-12 percent. The rubberwood processing industry of Malaysia is recognized to be a world leader because of the strength of its secondary-processing sector. Rubberwood in Malaysia is the main wood used by the furniture industry. It is estimated that exports of rubberwood furniture from Peninsular Malaysia accounted for 70 percent of all wooden furniture exported in 1994. Malaysia's exports of wooden and rattan furniture have increased from RM45.6 million in 1986 to RM2.61 billion in 1997 and RM4.36 billion in 1998 (Bani, 1999). (See Figure 9 for more details of Malaysia's furniture exports over the period 1988 to 1995). Figure 9 Malaysian exports of furniture in 1988-1995

Source: Malaysian Furniture Industry Council

The percentage of rubberwood entering secondary processing has also been rising in Thailand, where some 200 out of a total of 1,400 furniture manufacturers using rubberwood as a raw material. The quality of rubberwood furniture is high enough to be accepted in world markets and compares favorably with rubberwood furniture produced in Malaysia. Thai Rubberwood furniture accounts for 60 percent of total production of wooden furniture. In 1999, production of rubberwood furniture for 2000-01 was predicted to increase as a result of more liquidity and demand from foreign markets. A short-term problem was low supply of rubberwood because wood traders chose to export processed wood to China and Taiwan, where they could fetch higher prices. However, production capacity utilization was expected to increase to over 50 percent, because the local wood supply could last at least 10 years if the resource is managed efficiently. Domestic market value for 1997-99 decreased 30-40 percent to Baht 4-5 billion (Bangkok Bank, 1999). Approximately 70 percent of rubberwood furniture is exported to foreign countries (mainly Japan and U.S.A., accounting for 80 percent of the total) and in the form of knockdown furniture. Exports during 1997-99 were Baht 10 billion. Other minor producers of rubberwood furniture are India, Indonesia and Sri Lanka. The state of development of the furniture industry in India is still behind that of Malaysia and Thailand and production is mainly geared toward the domestic market. It is estimated that only 5 to 8 percent of rubberwood is utilized in downstream processing in India. In Indonesia, despite the large area of rubber plantations, the use of rubberwood in furniture is still limited to some 20 plants. The level of quality in the industry is also considered to be lower than in the main producing countries. The rubberwood processing industry in Sri Lanka is probably the oldest of all the countries. However, this industry has not developed significantly either in volume production or in the level of technology used in processing plants. 4.1.3 4.1.3. Other uses Some tests have been carried out to evaluate the potential of rubberwood for pulping. These tests have shown that rubberwood could be used for the production of semi-chemical pulp. One Malaysian company is exporting rubberwood chips to Japan for the production of corrugated paper medium. However, apart from this small amount of trade, there is no other recorded use of rubberwood for pulping.

Good quality rubberwood charcoal and briquettes can be produced from rubberwood waste. Rubberwood charcoal has been commercially produced in Malaysia for many years. In addition to fixed charcoal kilns, transportable metal kilns have been introduced in the last decade which produce a quality of charcoal that is comparable to the quality produced by fixed kilns. Another market for rubberwood is fuelwood and charcoal. Unprocessed rubberwood is also sold in local markets for household use.

4.2 Rubberwood cost and prices

As already noted, the physical characteristics of rubberwood enable it to be used extensively in the manufacture of chairs, stools, benches, tables and bed legs. It is also suitable for flooring and tableware. The greatest potential for substitution lies in the replacement of Asian timber species, such as Lauan, Meranti, Nyatoh, mixed light hardwoods and especially Ramin. Its potential to substitute for temperate species is more limited. Rubberwood has the potential to compete with beech, which is used for chairs and table legs. Because the light color of rubberwood allows it to be stained, it has begun to make inroads in traditional domains, including oak and cherry in cheap furniture ranges in the United States of America and Japan. However, a major factor which will influence the extent to which rubberwood utilization becomes a success will be the price of the raw material itself. 4.2.1 Stumpage prices Little information on rubberwood stumpage prices can be found. The latest data available were collected by ITC in the third quarter of 1992 and are shown in Table 23. Table 23 Rubberwood stumpage prices in selected countries in the third quarter of 1992 Country US$ per ha All wood China India Indonesia Malaysia Sri Lanka Thailand Vietnam Source : ITC (1993). As Table 23 shows, there was a very wide range of stumpage prices, which is likely to still exist. The highest prices were found in the Thai Province of Chantaburi where there is extensive rubberwood utilization. By contrast, the price in Southern Thailand, where there is much less rubberwood utilization, was lowest (US$770/ha). The situation in Malaysia was similar. The highest prices were paid in Peninsular Malaysia (US$1,200/ha or US$34/m3), where most wood industries are located. In regions where rubberwood supply was decreasing (e.g. Peninsular Malaysia), stumpage prices were also reported to have been rising. In other parts of Malaysia, where rubberwood had not yet been commercialized on large scales, stumpage rates were still low or even negative (i.e. plantation owners have to pay for felling and clearing). Stumpage prices were low in India (US$400/ha or US$8/m3) and in Indonesia, which has the largest plantation area but a low utilization Average 2,267 400 299 459 1,417 2,312 1,593 50- 400 0-1,200 675-1,710 770-7,600 13 9 4-40 Range Average 13 8 8 9 20 34 0-34 12-30 Range US$ per m3 Logs Average 27 Range

rate. The other main reason for these differences in stumpage prices is that some of those countries still have large supplies of other types of timber. Various reasons explain the price differences. In Thailand. rubberwood prices at the farm gate vary from plantation to plantation depending on the following factors (Paechana and Sinthurahat, 1997): 1. Number of stands per unit area - Higher rubber tree numbers/unit area yield higher wood totals. Rubber stands are usually 375 - 400 trees per ha, in line with past recommendations, but have been found as high as 800 for LTCs. 2. Age and size of rubber trees - The size of rubber trees depends not only on age but also on clone, soil and climatic conditions. Larger-sized trees achieve higher prices. 3. Location of the plantation - Due to rubberwood's susceptibility to mould and weevil infection, timber from rubber plantations close to factories and/or transportation routes gains higher prices than wood from more remote areas. 4. Seasonal price variation - Rubberwood supply is insufficient in the rainy season due to transportation difficulties and prices therefore higher than in the dry season. 5. Middleman activities - Many farmers ignore the rubberwood price since they receive funding from ORRAF. When middlemen propose even a low price it is accepted without hesitation because it used to cost money for old rubberwood clearance in the past. Some middlemen use small trucks and local routes to travel from plantation to plantation, looking for fallen and leaning rubber trees that obstruct tapper work. They bid for such timber at a low price or even for free and subsequently fell them using chainsaws. Rubberwood logs in Malaysia have been valued cheaply compared to logs from natural forests. It has been argued that while plantation owners do not obtain prices for the logs that are equivalent to the value of the raw material, sawmillers are able to achieve high profits (Kollert, 1994). The sales price of sawnwood is close to that of light hardwood species from natural forests. Rubberwood logs would have to cost around RM 120 per m3 (ex-sawmill) to reduce the sawmillers' profit to a level that is comparable to sawnwood production with light red Meranti. During the early 1990s, this log price was almost three times the prevailing market price. The low market price of rubberwood logs in Malaysia - and elsewhere - may be explained by the specific circumstances under which rubberwood is produced, namely as a by-product in agricultural plantations. The business objective of a plantation owner is not to supply logs for the timber market, but to replace old rubber trees at the end of the crop rotation. This in turn produced a market failure whereby high demand of wood processing industries does not translate into high raw material prices. As long as rubber farmers continue their operations a continuous supply of undervalued rubberwood logs from obsolete plantations is ensured. What is clear is that the 60-fold increase in Malaysia's rubberwood log production between the mid-1980s and mid-1990s was mainly due to the successful efforts of estates to fully utilize rubberwood. The poor quality of logs from smallholdings and the remoteness of their location limit the chances of smallholders to find buyers for their timber. On the other hand they also appear to be reluctant to sell their timber for the given low prices. Both conditions render the access of rubberwood to the timber market difficult (Kollert, 1994). Given these dynamics of rubberwood production, it is difficult to foresee sharp price increases. Local variations may occur, due to climate-induced gluts or shortages, the refusal of farmers or estate managers to replant trees at prevailing rubber prices or if rubber tree plantations come to be managed for wood, rather than latex, as was suggested in parts of Thailand and may be the case in areas of Peninsular Malaysia. Some increases may also occur where established processing capacities that use both rubberwood and other species have to cope with the increased shortage of the latter or where the vicinity of newly established

processing centers sharply increases demand beyond what rubber growers are able to supply. Where raw rubberwood prices increase sufficiently, some smallholder resources may enter the market. 4.2.2 Log and sawnwood prices Rubberwood log and sawnwood prices are given in Table 24 and Table 25. Table 24 indicates the price of rubberwood logs and sawnwood (for domestic and export markets) in Peninsular Malaysia in the month of May 1992. Similar data for November 1996 is given in Table 25 (unfortunately data for other countries are not available, so it is difficult to ascertain whether the changes indicated in these tables have also taken place in Thailand and Indonesia). Table 24 Comparative prices of logs and sawnwood in May 1992 Species Logs (US$/m3) Domestic (green) (US$/m3) Rubberwood Nyatoh Ramin Jelutong Light Red Meranti Dark Red Meranti Source : ITC. Table 25 Comparative prices of logs and sawnwood in November 1996 Species Logs (US$/m3) Rubberwood Meranti Merbau Kempas Keruing Source : ITTO. These two tables demonstrate that rubberwood is a low priced raw material in log form but its price differential narrows when processed. They also show several interesting aspects of recent rubberwood price developments, including: low rubberwood log prices reflect the low recovery rate of sawnwood; higher prices achieved when sawnwood is graded and kiln dried for export; 32-34 260-265 200-205 150-155 190-195 Sawnwood (US$/m3) 280-290 350-360 n.a. 230-245 n.a. 15.9 125.9 n.a. 118.8 150.0 152.6 89.0 260.0 n.a. 245.0 277.7 322.2 Sawnwood Export (export graded and kiln dried) (US$/m3) 220 358 389 406 406 482

 a sharp increase over four years of rubberwood log prices (+107 percent) and sawnwood (+220 percent); and an increasing divergence between rubberwood log prices and sawnwood prices (450 percent in 1992 but 760 percent in 1996). The historical increase in the demand for rubberwood in Malaysia and this sharp increase in price suggest that any future increase in demand might result in increased prices for rubberwood in the future. However, a further escalation of rubberwood prices could pose serious problems to the further development of the rubberwood furniture industry which, at present, is only competing in the low and medium end of the furniture market. In Thailand, the rubberwood price at the factory is not much different between factories whilst the yearround prices are more or less the same. The following prices could be obtained from each factory (Paechana & Sinthurahat, 1997): Timber with a diameter of more than 20 cm is used primarily in the veneer industry. The timber must be taken to the factory immediately after being felled and fetched US$50 per ton. Timber with a diameter of 15-20 cm is used mainly for sawnwood. It has to be sent to the factory within one week of felling. The price is US$32 per ton. Timber with a diameter less than 15 cm is used for particle board. It should be sent to the factory within 3 weeks. This kind of timber is bought at US$10-15 per ton. The price is more or less the same as for fuelwood. Table 26 indicates the relative price of rubberwood sawnwood in the highly competitive market of Taiwan Province of China. Table 26 Prices of Sawnwood in Taiwan province of China in October 1996 Product Rubberwood 25 mm. boards Rubberwood 50-75 mm. squares Rubberwood 75100 mm. squares Sepetir GMS ( AD ) Ramin Oak 25 mm. boards Maple Cherry Source: ITTO. Rubberwood sold in this market probably comes from Thailand. In this table it appears that the price for rubberwood sawnwood (50-75 mm) is some 15 percent above Sepetir (another popular furniture species which can be substituted by rubberwood). However, it is notable that the price of rubberwood is 25 percent less than the price of Ramin, the species that has been identified as closest to rubberwood in terms of properties. Price (US$/m3) 365-370 415-420 440-450 360-370 545-565 580-585 835-850 1150-1200

In most studies previously conducted, it appeared that many users utilized rubberwood because of its lower price. It appeared also that relative price increases would affect consumption but it was not clear to what level rubberwood prices must rise before consumers switch to other woods. The effect of price elasticity is rather dependent upon where on the demand curve rubberwood is currently perceived and the extent to which suitable alternative species and materials are available. Rubberwood is particularly successful in the low-to-middle priced wooden furniture sector, such as used in tables and shelving systems. Such low prices can only be maintained with a low-to-medium cost raw material. If rubberwood prices enter a medium-tohigh range, the marketing advantage of being a species from a renewable resource may not be sufficient. It is the additional processing, wastage and need to stain/finish, which determines the need for a price differential for rubberwood. One further development, which would suggest an upward trend in rubberwood prices, is the development of new mills. Table 21 indicated that six new MDF mills based on rubberwood should start operation by the end of 1997. It is not known where these new mills will be located in Thailand, Malaysia and the Philippines but it is expected that they will be located in areas where industrial processing is already advanced. The problems of transporting rubberwood over long distances limits the possibility of utilizing the resource from a less industrialized area with lower prices.

4.3 Current consumption in producing countries

4.3.1 Consumption by the primary processing industries As indicated previously, consumption of rubberwood was estimated to be around 4.6 million m3 in 1991, out of which 3.5 m3 was used by the sawmilling industry and some 1.1 million m3 by the wood-based panel industry. Thailand and Malaysia together accounted for 65 percent of total log production and these two countries have developed the most extensive export industries based on rubberwood. Assuming growth of rubberwood processing by 8 percent/year for Thailand and Malaysia and no growth for the other countries using rubberwood, it can be estimated that around 6.0 million m3 of rubberwood logs might have been produced/consumed in 1996. This total accounts for some 5 percent of production of non-coniferous sawlogs, but this percentage varies markedly among countries. For example, it is low in timber rich countries, such as Malaysia and Indonesia, or in large countries, such as China and India, but high in others such as Thailand and Sri Lanka. 4.3.2 Consumption by the secondary processing industries Producing countrys' secondary processing industries using rubberwood cover a large spectrum from pallet manufacturing to the most advanced export-oriented furniture and joinery manufacturers in Malaysia and Thailand. There are no recorded statistics on the amount of rubberwood logs used by the furniture industry or on the production of rubberwood furniture in the main rubberwood producing countries. However, it is estimated that in 1992 some 85 percent of rubberwood sawnwood produced in Malaysia was processed further into furniture. A tentative estimate, based on previous studies, indicates a figure of 1.6 million m3 of rubberwood logs were used for sawnwood production in Malaysia in 1995. Assuming a 33 percent average sawnwood yield, this would give 520,000 m3 of rubberwood sawnwood production (6 percent of total sawnwood production in Malaysia) and, using a yield of 50 percent for sawnwood to finished products, some 220,000 m3 of secondary products production from rubberwood.

4.4 Current world demand for rubberwood

Since the 1993 in-depth study carried out under the auspices of the International Trade Centre, no equivalent work has been done. The estimated world consumption of rubberwood in 1991 amounted to 238,000 m3 (product volume). Table 27 shows the importance of the main import markets and the sawnwood equivalent of rubberwood product consumption for these markets. The same study indicated rubberwood consumption by main importing markets and product type (Table 28). Table 27 Consumption of rubberwood in 1991

Importer (`000 m3) United States of America Japan Europe Taiwan Province of China Republic of Korea Singapore Total 92.4

Actual (percent) 39

Sawnwood equivalent (`000 m3) 184.6 (percent) 41

75.0 30.2 27.4

31 13 11

135.4 59.2 46.3

30 13 10

9.2 3.8 238.0

4 2 100

16.9 5.4 447.8

4 1 100

Note: product volumes were converted to sawnwood equivalents assuming a 50% recovery rate. Source : ITC (1993). Table 28 Use of rubberwood by country and product type in 1991 Country or region Lumber (`000 m3) Furniture Furniture Builders' finished (`000 m3) United States of America Japan Europe Taiwan Province of China Republic of Korea Singapore Total Percent Source: ITC (1993). In Table 27 and Table 28, total use is somewhat underestimated because imports from Indonesia, Vietnam and China are not included. Nevertheless, data shows that furniture accounts for the largest share of rubberwood consumption, highlighting the advanced development of these industries in Southeast Asia. By contrast, rubberwood sawnwood consumption was relatively small and declining, confined mainly to Japan and Taiwan. This reflects problems, such as the lack of suitable dimensions, twisting, staining and the lack of a standard grading system. Based on the above consumption tables, ITC also produced projections of rubberwood product consumption in 1996 and (Table 29). 0.2 14.6 1.4 8.5 65.0 31.5 16.4 16.0 parts (`000 m3) 12.0 21.9 n.a. 0.9 Other Total (`000 m3)

woodwork (`000 m3) (`000 m3) 2.3 2.0 8.0 <0.1 12.9 5.0 4.4 2.0

92.4 75.0 30.2 27.4

1.5 2.3 28.5 12

0.8 0.5 130.2 55

3.9 0.6 39.3 16

1.7 0.2 14.2 6

1.3 0.2 25.8 11

9.2 3.8 238.0 100

Table 29 Estimated rubberwood consumption in 1991 and 1996 Product Consumption in 1991 (000 m3) 28.5 130.2 39.3 14.2 25.8 238.0 28.9 38.5 349.4 57.8 71.0 674.3 15.2 8.3 8.0 Actual (000 m ) 28.5 253.5
3

1996 Sawnwood equivalent (000 m ) 28.5 507.0

3

Change 1991 - 1996 (% per annum) n.a. 8.3

Lumber Furniture (Furniture parts) Builders' woodwork Other wooden items Total Source : ITC (1993).

1 Since its development and rapid expansion, OSB in general has threatened to replace the more traditional plywood in many
applications including uses where structural strength is required. While it can be produced with strength properties comparable to plywood, OSB is significantly cheaper to produce as small diameter and low quality logs can be used. Until 1998, OSB was 3 largely a North-American phenomenon, with production reaching almost 12 million m . OSB has also spread to Europe and is gaining popularity in Japan, but as of 1998 remained to be introduced to Southeast Asia. Mills in Indonesia were at the planning stage and some OSB imports for packaging was reported.