Market trends in the MENA-region - Ulf Gabrielsson Uni4 Marketing AB Uni4 Marketing AB
Is Sweden still a market leader in the MENA-region?
Is this the market situation at the moment? Uni4 Marketing AB
The Swedish export of sawn softwood 2017 to the biggest markets 2016: 570 m3 20% of the total Swedish export goes to the MENA-region 46% of the total pine export goes to the MENA-region
Shares of the softwood import to the MENA-countries, (jan-aug 2018 6,7 million m3 ) Tunisia 3% Other 10% Saudiarabia 10% Iraq 3% UAE 5% Morocco 7% Egypt 37% Iran 8% Algeria 17% Abt 70% of total import Uni4 Marketing AB (source: Woodstat)
Softwood import to North Africa 2016/2017 Libya Sudan 76 32 70 103 Tunisia 348 307 Morocco Algeria 780 754 913 1 710 50% decrease of Algerian import 2017 due to importlicenses Egypt 3 965 4 401 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 1000 m3 2016 2017 Uni4 Marketing AB (source: Woodstat)
Softwood import to Middle East 2016/2017 Yemen 82 146 Syria Jordan Lebanon 73 111 216 185 205 194 Gulf countries imports mainly spruce from central Europe Iraq Gulf countries Iran 245 266 714 795 887 1016 Iran imports mainly spruce from Russia Saudiarabia 1 132 1 430 0 200 400 600 800 1 000 1 200 1 400 1 600 2016 2017 Uni4 Marketing AB (source: Woodstat)
Share of softwood deliveries to North Africa (jan-sep 2018) Central Europa 14% Baltic states 4% Finland 33% Russia 19% Sweden 30% Russian export to Egypt has decreased since 2015 but has increased again during 2018 Finland and Sweden more or less on same level Austrian export consists of spruce, used mainly for construction Uni4 Marketing AB (source: Woodstat)
90% of the Russsian export to Middle East goes to Iran (spruce), Iraq and Syria Share of softwood deliveries to Middle East (Jan-Sep 2018) Austria 10% Finland 7% Others 8% Russia 34% Sweden 10% Germany 14% Romania 17% Romanian export is only spruce to mainly Gulf countries, Saudi and Lebanon Swedish export is mainly pine to Saudiarabia Finnish export is mainly to Saudi and consists of 50% pine and 50% Spruce Uni4 Marketing AB (source: Woodstat)
EGYPT Softwood import to Egypt from main suppliers Jan - sep 2018 Jan - sep 2017 2018/2017 Finland 970 904 7% Russia 937 735 27% Sweden 654 840-22% Latvia 165 136 21% Others 68 42 162% Summa 2 794 2 657 5% Uni4 Marketing AB (source: Woodstat)
oktober 2016 november 2016 december 2016 januari 2017 Current Egyptian Softwood market in a nutshell februari 2017 mars 2017 april 2017 maj 2017 juni 2017 juli 2017 augusti 2017 september 2017 oktober 2017 november 2017 december 2017 januari 2018 februari 2018 Prices on local market for redwood has increased with over 250% from Nov 2016 to summer 2018 due to devaluation of EGP, high inflation and increased importprices. Rumours says that government are holding back payments on projects. 16% interest rate at EGP bankaccounts and only 1,5% for USD to keep inflation down but repressive for investments and consumption. 20,0 19,0 18,0 17,0 16,0 15,0 14,0 13,0 12,0 11,0 10,0 9,0 8,0 7,0 6,0 5,0 USD/EGP Result; Lower consumption and demand, price drop on local market with increased stocks on importerlevel as a consequence. Cash-flow problem at importer level due to lower sales.
At the same time higher output from main exporting countries Result. But what happens around the corner? Uni4 Marketing AB
+ Political and security situation more likely will remain stable. + After devaluation of the EGP the black market has dispappeared and the availability of USD has become better + Due to a young and growing population is the need for housing increasing. + A number of bigger buildingprojects are running and in pipeline + Joinery/furniture sector is the biggest in the MENA-region. Estimation is that about 2,5-3 million m3 softwood is consumed in this sector per year. - The growth of Egyptian economy is dependent of external financing - Risk for tough competition among exporting countries if the alternative markets for low grade pine is limited. - Egyptian timber market will always be a volatile market due to its position as solution for low grades Uni4 Marketing AB
ALGERIA Softwood import to Algeria 2016/2017 (1000 m3) Sweden and Finland deliver only pine and Austria/Germany only spruce Germany Finland Austria Sweden 26 86 273 490 300 563 312 566 0 100 200 300 400 500 600 2016 1 710 000 m3 2017 913 000 m3-47% Jan - sep 2018 Jan - sep 2017 2018/2017 Market has recovered since the importstop 2017 Austria 403 158 +155 % Sweden 400 160 +150 % Finland 391 151 +159 % Germany 40 17 +135 % Sum 1 238 487 +154 % Uni4 Marketing AB (source: Woodstat)
Uni4 Marketing AB Temporary slowdown because of too fast recovery on importerlevel
Algerian Softwood market in a nutshell + A strong need to modernize Algeria is supported by the government. + Due to a young and growing population is the need for housing increasing. + Big building program for the common people continues + Industrialization (slow) of the wooden sector - Administrative burden and lack of visibility has a negative impact on the foreign trade? Risk for higher inflation and devaluation of the Dinar. Uni4 Marketing AB
Morocco Germany Austria Finland Sweden Softwood import to Morocco 2016/2017 (1000 m3) 34 45 42 57 261 255 428 392 0 100 200 300 400 500 Jan - sep 2018 Jan - sep 2017 2018/2017 Sweden 287 290-1 % Finland 166 190-13 % Austria 65 39 +67 % Germany 36 29 +24 % Others 5 5 - Sum 559 553 +1 % 2016 780 000 m3 2017 754 000 m3 Stable market dominated by pine from Sweden and Finland Morocco Softwood market in a nutshell Austria/Germany s (spruce) share of softwood import has increased with 6% this year + Need for 1 million housing units until 2021 + Tourism increasing, vision2020: 20 million visitors/year +/- Demand of low grades increases - Substitute material such MDF and plywood gaining market shares - Construction sector has slowed down since 2012 Uni4 Marketing AB (source: Woodstat)
Saudi Arabia Jan - sep 2018 Jan - sep 2017 2018/2017 Sweden 222 219 +1 % Finland 156 306-49 % Germany 100 77 +30 % Romania 81 97-16 % Austria 60 57 +5 % Baltic States 53 41 +29 % Canada 35 53-34 % Russia 13 23-43 % Sum 720 873-18 % Baltic States Germany Romania Sweden Softwood import to Saudi Arabia 2016/2017 (1000 m3) Russia Canada Austria Finland 41 29 67 61 91 66 105 84 109 179 163 121 334 288 372 448 0 100 200 300 400 500 2016 1 430 000 m3 2017 1 132 000 m3-21% Uni4 Marketing AB (source: Woodstat)
Saudi Softwood market in a nutshell + Furniture industry is expected to grow abt 10% annually +/- Vision 2030 includes a number of building projects but many of them are postponed +/- Oil price has a significant impact on the willingness to invest - Saudization is a big challenge in the construction sector since 80-90% of the workers are foreigners. +/- War in Yemen has a signicant impact on the softwood export to Saudi. - More demand on Vith grade due to export from Saudi to Yemen? Political situation Uni4 Marketing AB
Summary and Future, short and long term EGYPT Short term: Unsure situation in Egypt at the moment Long-term: Looks promising with growth of 5-6% the coming years ALGERIA Short term: Market has recovered after the last year import stop Long-term: The economy will continue to grow with about 3% the coming years MOROCCO Short term/long-term: Morocco has a stable economy and steady growth SAUDI-ARABIA Short term: Unsure political situation which together with the oilprice has a huge impact on the growth. Long-term: Liberalisation and peace in the region will be a base for growth Uni4 Marketing AB
Is Sweden still a market leader in the MENA-region? We are at least on the podium THANK YOU Uni4 Marketing AB