Aiming to throw the spotlight on the potential and importance of Egypt as a market for U.S. softwoods, the Southern Forest Products Association (SFPA) and Southeastern Lumber Manufacturer's Association (SLMA) recently concluded a market study - Emerging Markets Program Assessment: The Egyptian Market for U.S. Softwoods. This is one of several Emerging Market Program (EMP) projects that the U.S. forest products industry undertakes to reach potentially new emerging markets. Each project is led by a team of experienced researchers backed by the organizational and administrative support of forest products co-operators with decades of experience administering FAS-funded market development programs.
Numerous indicators show strong potential for growth in U.S. wood product exports to Egypt, including overall economic growth, and strong demand in the country’s furniture manufacturing industry. According to American Softwoods (AMSO), the promotional partnership formed by three major U.S. softwood trade associations, American softwood lumber exports to Egypt nearly doubled to USD 8.3 million, yet the United States holds a very small share of this market, estimated at less than 1 percent.
Commenting on the growth potential, Charles Trevor, Consultant to American Softwood, said: “One of the sectors which shows potential for U.S. exports is the furniture industry centred around the triangle of Damietta, Alexandria, and Cairo. The furniture industry consumes huge volumes of solid wood, importing substantial volumes of beech and Spruce-Pine-Fir from Romania as well as oak from the Balkan states. The U.S. industry is convinced that American softwoods could rapidly gain a share of Egypt’s furniture production industry, as well as in the construction sector, given the large construction projects being planned over the coming years.”
Egypt is the largest market for softwood lumber in the Middle East and North Africa. Lumber demand is set to rise sharply over the coming years as its economy improves and several large-scale urban development projects are planned in the near future. The country relies entirely on imported softwoods and buyers are seeking alternative sources owing to the rising cost of imported hardwoods. U.S. softwoods are the ideal alternative and interest among buyers is rising. However, the timber trade and furniture and joinery manufacturers are accustomed to working with European and Russian material and are unfamiliar with U.S. lumber species, grades and sizes.
While economic problems remain, the long-term outlook for Egypt - and demand for imported softwood lumber - is bright. Egypt’s growing, young population will bolster economic growth over the coming years, the construction market is recovering from the floatation of the Egyptian Pound, tourism is slowly recovering, and the Egyptian government is investing heavily in infrastructure. A government initiative to build one million housing units as well as a multi-billion-dollar initiative for a new administrative capital to seat the national government is expected to drive growing demand for softwood lumber.
Egypt imported 4.4 million cubic meters of softwood lumber in 2016, but imports fell in 2017 owing to the devaluation of the Egyptian Pound, which has lost nearly 50 percent of its value against the dollar since 2011. Imports are expected to climb to 4 million cubic meters in 2018. U.S. softwood lumber exports to Egypt grew steadily in value over the past five years - rising from USD 4.3 million in 2012 to USD 8.3 million in 2016, but declined sharply 2017 in line with the country’s overall imports. While wood is rarely used structurally in Egypt, wood demand is expected to rise sharply for interior applications such as flooring, doors and windows.
Demand in the furniture production sector is also expected to rise over the coming years as the country seeks to become more competitive in that sector. Low-priced European redwood is used for construction - primarily for concrete forming - while U.S. Southern Yellow Pine (SYP) is used for interior joinery, panelling, doors, windows, and flooring. Interviews with a major importer holds that SYP from the United States is viewed as a hardwood owing to its density, and increasingly a less expensive substitute for oak. SYP is also priced between hardwoods (especially oak) and European and Russian pine, and is preferred for its grain pattern and is typically lightly stained to expose the grain.
“Looking ahead, importers believe that the market is ripe for development and technical assistance is needed as buyers turn to alternative material imported from Europe. U.S. softwoods are priced competitively and we have an excellent opportunity to grow imports if we can provide importers and end users with the technical assistance and training that will enable them to specify U.S. softwoods with confidence. Overall, interest in U.S. softwoods is increasing but much work is needed to accustom buyers to working with U.S. grades, sizes, and characteristics in a market used to buying European and Russian material,” concluded Trevor.
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About American Softwoods:
American Softwoods (AMSO) is a promotional partnership formed by three major U.S. softwood trade associations, the Southern Forest Products Association (SFPA), the Softwood Export Council (SEC) and APA - The Engineered Wood products Association (APA). The campaign encourages the use of American softwoods for both internal and external projects and increase awareness of its commercially available species. AMSO also works with the timber industry, providing technical information and assistance to develop the market for American softwoods.
Renowned for their strength, flexibility, versatility and beauty, American softwoods have been exported for almost 200 years. Harvested from sustainably managed forests in the USA, the success of forest management and conservation in the USA means that forested land is now greater than it was 75 years ago, and is increasing year on year. For more information, please visit: www.americansoftwoods.com.
© Press Release 2018
