Pöyry advises panels sector on surviving double dip

The company predicts that a double dip is "very likely to become a reality" and that wood-based panel demand will inevitably be hit. The majority of producers are forecast to lose volume in 2012, due to continuing depressed demand for housing and furniture.

Overall European demand will fall 2%, while eastern European growth will continue, though more slowly. Between 2012 and 2016 the latter is projected to grow by an average 7.5% a year, compared to 1.5% for western European producers.

Jaako Pöyry says that pre-tax earnings in the market have already been impacted strongly by the downturn. Capital turnover has been relatively stable, but that reflects "significant capacity closures and divestments".

Among the ways that the consultancy puts forward for the industry to come through a double dip are consolidation, through plant closure, mergers and acquisitions.
Another route is capacity rationalisation. This has already been widespread across Europe, with Pfleiderer and Kronospan alone shedding 1.6 million m3 of capacity between 2010 and 2011.

More positively, Jaako Pöyry says the sector can become more resilient and profitable through product innovation, diversification into new market and product areas and through cost optimisation.