TheMarketforBio‐compositesinthePhilippines

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THEMARKETFORBIO‐COMPOSITESINTHEPHILIPPINES

1.0 INTRODUCTION

Among the group ofwood products collectively known as bio‐composites,plywood is perhaps the Philippines’ most enduring secondary processedwoodproduct. ThePhilippines took theearly lead inveneerandplywoodproduction inAsia and upuntil the 80s, continued to be amajor industryplayer in the region. From the 1950s up to the early 60s the industryexhibitedaremarkableandsteadygrowth,largelyduetothedemandfromtheUnitedStateswhichabsorbedabout97%ofthecountry'stotalplywoodexports.Then,in1974,thePhilippines’shareofthemarketdroppedto15%(Sanvictores,1975).

Sincethenmajorrealignmentshaveoccurred.Decliningavailabilityoflocaltimber and drastic reduction in logging quotas have resulted to thecontractionofthelocalindustry,furtherresultingtothegradualerosionofthe country’s share of themarket bymore competitive countries, notablyChina,which in2003,becamethe largestveneerandplywoodproducer inthe region, overtaking Ghana, Brazil, the Philippines and Malaysia(INFOCOM,2007).

Overthepastfourdecadesthewoodprocessingindustryintheregionandin thePhilippineshasbeenconstantlychallengedbynewtechnologiesandproducts, changing demand, shifting environmental issues and economicupheavals. But initiatives to re‐examine the industry are not wanting. Arecent ITTOproject ledby Indonesia looksat the futureofbio‐compositesandengineeredwoodproductsintheregion.ThisstudyisacomponentofthecountryprogramforthePhilippinesandingeneral,aimstoreviewthemarket for bio‐composite products in the country and to determine thepotentialforfuturegrowthofbio‐compositeproducts.

DATASOURCES

Information used in this study were obtained from responses to mailedquestionnaires, interviews of key informants in the industry, from officialstatistics published by the Forest Management Bureau (FMB) of theDepartment of Environment and Natural Resources (DENR) and frompublishedreportsandpapers.

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Questionnaires were mailed to 17 representatives of the ConstructionIndustry Authority of the Philippines (CIAP), an attached agency of theDepartment of Trade and Industrymandated to “promote, accelerate, andregulatethegrowthanddevelopmentoftheconstructionindustry.” Theserespondentswerecivilengineersandrepresenttheusersofbio‐compositeproducts.Eightquestionnaireswerereturned.

Adifferentsetofquestionnaireswasmailedtobio‐compositeproducers.

Table1.NumberofrespondentsSector Number

ConstructionIndustryAuthorityofthePhilippines(CIAP)

17

Plywoodproducers 8Particleboardproducer 1Cementbondedboardproducer 1

2.0 BIO‐COMPOSITEPRODUCTSINTHEPHILIPPINES

Bio‐composites are a combination of natural fibers such as wood fibers(hardwoodandsoftwood)ornonwoodfibers(e.g.,wheat,kenaf,hemp,jute,sisal, and flax) held together with some type of bondingmaterial such asadhesive (Golbabaie, M. 2006; Rowell, R 1998). Bio‐composites may beadhesives‐basedorcement‐based.Themajortypesofbio‐compositesinthePhilippinesarethemoretraditionaladhesive‐basedbio‐compositessuchasplywood, fiberboard, blockboard and particleboard. Cement‐based bio‐compositesarefiber‐cementboardsandwoodoragri‐basedcement‐bondedboards.

Plywood was the first bio‐composite introduced in the country. Theplywood industrystarted in the1950sandhasremainedaviable industrydespiteeconomicandenvironmental challenges. Particleboardproductionwas introduced in the 70’s but has not gained a strong foothold in theindustry. Thecountryproduceshighdensity fiberboard,butproduction isalsominimal.

There are 40 plywood producers in the country with a total daily ratedcapacity of 2,227 cu m. Presently, however, plywood plants operate onaverage,atlessthan80%ofcapacitybecauseofdifficultiesinthesupplyofwoodrawmaterials.

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Table2.Numberofbio‐compositeproducersanddailyratedcapacity.

Bio‐compositeproducts

No.ofproducers

DailyRatedCapacity

Plywood 40 2,227cumBlockboard 7 NodataFiberboard 1 NodataParticleboard 1 1,000panelsCementbondedboards 2 50panelsperdaySource:PhilippineForestryStatistics2006andpersonalinterviews

3.0 PRODUCTIONANDDISTRIBUTION

3.1 PRODUCTIONOFMAJORBIO‐COMPOSITEPRODUCTS

Plywood is still the major bio‐composite product produced in thecountry.From2001to2006,productionrangedfrom292thousandto 386 thousand cu m, with the highest production in 2004.Fiberboardandblockboardproduction,ontheotherhandwasbelow100thousandcumandwasfairlystablefrom2001to1006.

Figure1.ProductionofPlywood,FiberboardandBlockboard

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3.2 PRODUCTFLOW

TheproductionanddistributionchainofprocessedwoodproductsinthePhilippinesstartsatthenaturalorplantationforest. Falcata,yemane and lauan species are the more common types of localroundwood species used in bio‐composites. The country alsoimports logs. In 2006, the country imported 65,185 cu m ofroundwood, the lowest so far since 1996when imports peaked at877,000cum.

Sawlogsarefurtherprocessedintolumberinsawmills.Veneerlogsmay either go to veneer plants or plywood plants. Plantationthinnings go to particleboard, fiber board or wood wool cementboardplants. Thebulkof fiberboardsused in the localmarketareimported by local distributors whose buyers come from thefurnitureandconstructionsector(Fig2).

Major end‐use markets for bio‐composites are the furniture andconstruction industries and to a smaller extent, builder’swoodworks. More than 80% of the direct buyers of plywood andblockboard are traders and 31% of direct buyers are contractors.About 20%aremore or less equally distributedbetween furnituremakersandbuilderswoodworks(Table3).

Table3.Compositionofdirectbuyersofbio‐compositesTypeofBuyers Plywoodand

BlockboardAve%

ParticleboardAve%

Cementbondedboards

Ave%Traders 87 20 Furnituremakers

11 80

Contractors 31 100Builderswoodworks

10

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Figure 2. Production and distribution flow of bio-composites

Natural or plantation forest, imported logs Roundwood production and imports

Sawlogs

Sawmills

Thinnings pulp logs

Particleboard, Fiberboard, wood wool and fiber cement board plants

Lumber

PARTICLEBOARD

Primary w

ood processing

FIBERBOARD (HDF)

Furniture Producers

Builder’s woodworks

End-use Building construction

Veneer PLYWOOD

Distributors/ traders

Woodchips

WOOD WOOL CEMENT BOARDS

Paper mills

Fuelwood

Veneer logs

Veneer & Plywood plants

Fiberboard imports

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Twenty five percent of the volume of cement bonded boards ischanneled through traders; 65% are bought directly by buildingcontractors. The loneproducerof particleboard shipsdirectly tofurniture producers in Manila and Cebu, the Philippines’ majorfurnitureproductioncenter.

3.3 PRODUCTIONCENTERS

ThePhilippinesisdividedintothreemajorislandgroupings—LuzoninnorthernPhilippines,VisayasintheCentralpartandMindanaointhe south (Fig. 2). The only operating particleboard plant and 29plywoodproducersoutofthecountry’stotalof40,arelocatedintheMindanao region, which is also known as the country’s “timbercorridor.” In 2006, 299 thousand cu meters of plywood wereproduced in this region, representingalmost95%of the country’stotalplywoodproductionof(Table4).

Table4.Plywoodproductionbyregion,2006.Region TotalProduction

(cum)%

Philippines 316,922 100.00Luzon 17,721 5.59NationalCapitalRegion(NCR)

12,293

Region4‐A 5,428Mindanao 299,201 94.41Region9 32,558Region10 91,876Region11 9,097Region13 165,670Source:PhilippineForestryStatistics2006

In2006,thePhilippineForestryStatisticslistedtenplywoodplantsinLuzonandonlyoneintheVisayas. However,sincetherewasnorecordedplywoodproductionintheVisayasin2006,thismayimplycessationofoperations.

Whilemajorityofplywoodplantsarelocatednearthesourcesofrawmaterial,fibercementboardsandwoodwoolcementbondedboardsare produced in Southern Luzon nearer to the larger markets ofMetroManilaandoutlyingprovinces(Fig1).

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4.0 THEMACRO‐ENVIRONMENTOFTHEBIO‐COMPOSITESINDUSTRYINTHEPHILIPPINES

4.1 THECONSTRUCTIONANDFURNITURESECTORSThe demand for bio‐composites is tied primarily to the state ofactivitiesoftheconstructionsectorandthefurnitureindustry.

ConstructionIndustry

Despite the global financial crisis, the local construction sector didnot suffermajor slumps in activity. There has been an increasingtrend in residential and building construction for the past threeyears(Fig2).

MINDANAO 29 plywood plants 1 particleboard plant

LUZON 1 Fiber cement board plant 2 Agri-wood based cement bonded board plants 10 plywood plants

VISAYAS 1 plywood plant

Major demand centers METRO MANILA, Region III CALABARZON

Major demand centers CEBU AND BOHOL

Figure2.Locationanddistributionofwoodbasedbio‐compositeplantsandmajordemandcentersforwoodbio‐composites

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Comparativefiguresforthefirstquarterof2009and2008alsoshowan increase in residentialbuilding constructionwhich roseby21.3percentinthefirstquarterof2009comparedtothesamequarterof2008. Similarly, non‐residential building construction grew to aremarkable42.6percent(Fig3).

Construction is focused on single‐type residential houses, followedby residential condominiums and apartments. There has been anincreaseof around180,000 sqm in total floor area for all typesofbuildings.

Single House Duplex Apartment/Accessoria Residential Condominium Others

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,0001,709,278

49,227

358,960

151,910

3,811

1,601,765

39,292

227,097

131,12293,486

Comparative Construction Statistics by Building Type

(1st Quarter, 2009 and 2008)

4th Quarter 2008 4th Quarter 2007

Flo

or

Are

a (

in S

qu

are

Me

ter)

Sq. m.

Figure 3. Total construction in square meters, 2005-2006

Year

1st Quarter 2009 1st Quarter 2008

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FurnitureIndustry

An estimated 15,000 firms comprise the local furniture industry(DepartmentofTradeandIndustry,2005).Only2%areconsideredlargeventuresandtheremaining98%aresmallandmedium‐sizedfirms.

Woodfurniture,mostlyinsolidwood,isthemostcommonmaterialused in furniture exports, accounting for 59% of total Philippinefurnitureexportstotheworld.

Bio composites such as plywood, medium density fiberboard andparticleboardareused forpanel furnituresuchasoffice tablesandcabinets, most of which go to the domestic market. Domesticfurnitureproductionfillstherequirementsofnewresidential,hotelandofficebuildings. Thus,demand for local furnitureand the rawmaterials used in their manufacture is also fuelled by theconstructionsector.

4.2 INSTITUTIONALMajor institutions that impact on the bio‐composites industry arethe Department of Trade and Industry (DTI), Department ofEnvironmentandNaturalResources(DENR)andtradeassociationssuchasthePhilippineWoodProducersAssociation(PWPA).

TheBureauofProductStandards(BPS)oftheDepartmentofTradeand Industry (DTI) develops, implements and coordinatesstandardization activities. Of the bio‐composite products in thePhilippines, standards have been developed only for plywood.Thirty‐three plywood plants have been granted product standardscertificationandcanthususethePSMarkontheirproducts.

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TheBPSconductsregularandspecialassessmentofmanufacturersof plywood, ensuring that no plywood produced by Non‐PS MarkLicenseholdershallbesoldto,orofferedforsalebyanymarketingoutlets.TheBPScanalsotakeactionandimposefinesandpenaltiesagainst manufacturers, importers, traders, distributors and/ormarketingoutletssellingsubstandardplywoodorplywoodwithoutPSorImportCommodityClearance(ICC)fromtheBPS.

The DENR, on the other hand, may cancel a company’s WoodProcessingPlantPermit(WPP),denytheapplicationforrenewalofWPP,padlocktheplywoodmillandimposefinesorpenaltiesagainstnon‐WPPholdersorviolatorsofthePSmark.ItcanalsocanceltheCertificateofRegistrationforAuthoritytoImportWoodMaterialsofimportersofsubstandardplywoodorplywoodwithoutICCmark.

The PWPAworks togetherwith the DENR and BPS to ensure thatplywood,whetherimportedorlocallymanufactured,conformswiththe specific national standard for the protection of the consumers.The PWPA is an association of lumber, veneer and plywoodproducersandgivesvoicetotheissuescurrentlyfacedbythewoodprocessingindustry.

Policies that impact on the rawmaterial sources of bio‐compositeplantsareshapedbytheDENR.Supplyofwoodrawmaterialshavebeenaffectedbypolicieson “thenon‐renewalof timber leases andlicenses;theprohibitionofcuttingfromold‐growthforests(throughNIPAS Act or RA 7586 & DAO 02, 1992), the cancellation orsuspensionoftimberconcessionactivities insecondary;andtheonandoffpolicyofbanningtimber”(Carandang,2005).

4.3 TECHNOLOGICALNew technologies and processes have given rise to alternativematerials and products that directly compete with the more“traditional”woodbio‐composites. Fibercementboardisseenasadirectcompetitorbyplywoodproducers.

Ontheotherhand,mostplywoodplantswereestablishedinthe70sand some are still operating on vintage equipment. Despite these,theindustryhasmanagedtoadaptandsurvive.

Most advanced technologies for bio‐composites in general, isexternally acquired from the more developed nations which havedeveloped newer technologies on bio‐composites, particularly on

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adhesives and the use of different fiber‐base resources incombinationwithothermaterials.

4.4 ENVIRONMENTALOneof thebig issues facedbythebio‐basedcomposites industry ison the nature of adhesives used, particularly on the volatiles theyrelease when used in bio‐composites products. Most local firmshave yet to shift to non‐formaldehyde based adhesives, partlybecauseofcostconsiderationsandpartly,becausethe localmarketingeneral,isnotasparticularanddemanding.

5.0 BIO‐COMPOSITESDEMANDANDSUPPLY

5.1 PLYWOOD

Plywood is still themost common type of bio‐composite used. Onthe average, about 66% of bio‐composites used in constructionprojects of contractor‐respondents is plywood, which is used asceilingsandinteriorwalls.

Domestic demand for plywood is met by local production andaugmentedby importswhich increased from2001 to2006. Basedon these figures,89%to98%of total supplywent to thedomesticmarket(Table5).

Table5.Production,tradeandconsumptionofplywood. PLYWOOD, cubic meters

Year Production Imports Supply Exports % Available for Domestic Use

%

2001 292,294 8,242 300,536 6,834 2 293,702 98 2002 350,353 24,847 375,200 21,909 6 353,291 94 2003 350,891 48,557 399,442 16,637 4 382,811 96 2004 385,570 42,045 427,615 47,731 11 379,884 89 2005 314,182 78,005 392,187 40,015 10 352,172 90 2006 316,922 75,135 392,057 19,952 5 372,105 95 Source:PhilippineForestryStatistics

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5.2 FIBERBOARD

Compared to plywood, local production of fibreboard is minimalfallingonoraround50thousandcumperyear(Figure1). Locallyproduced fibreboards, also called “lawanit,” are high densityfibreboards (HDF). In construction, they are used as ceilings andinteriorwalls.

The Philippines does not produce medium‐density fibreboards(MDF).DemandforMDFandHDFboardsandfinalproductsisfilledinbyimports.

Importsoffiberboardswerehighestin2004butre‐exportsshowedan increasing trend from 2004 to 2006. Domestic consumption,however,decreasedfrom48millionkg.in2002to30millionkg.in2006.

Table6.Production,tradeandconsumptionoffiberboardsFIBERBOARD

Year Production cu m

Imports ‘000 net kg

Supply* ‘000 net

kg

Exports ‘000 net kg

Domestic Consumption ’000 net kg*

2001 5 44,292 44,292 28 44,264 2002 8 48,478 48,478 113 48,365 2003 0 29,315 29,315 5,367 23,948 2004 7 53,527 53,527 9,791 43,763 2005 4 47,937 47,937 10,226 37,711 2006 5 47,981 47,981 17,981 30,000

*localproductionnotincludedSource:PhilippineForestryStatistics

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5.3 PARTICLEBOARDS

ThePhilippineshas threeparticleboardplantsbutasof2009,onlyoneisoperating. Theplantcanproduce1,000highdensityparticleboardsperdaybutonaverageproducesonly650panelsaday. ItusesGmelinatopsandbranchesasrawmaterialandpridesitselfinusingformaldehyde‐freeglueintheirproducts.

Their boards are shipped direct to furniture makers in Cebu andManila. Twentypercent of theirmarket is inCebu, 70% inManilaand10%goestothelocalmarketintheplant’shometowninOzamiz.

Although the plant is operating below capacity, the country stillimports a sizeable quantity of particleboards. Imports increasedfrom around 3million net kg in 2001 to 8million net kg in 2006.Onlylessthan2percentisexported.

Table7.Production,tradeandconsumptionofparticleboard.PARTICLEBOARD, in ‘000 net kg

Year Production Imports Supply Exports Domestic Consumption

2001 No data 2,948 2,948 - 4 2002 n.d. 3,674 3,674 - 3,674 2003 n.d. 7,162 7,162 - 7,162 2004 n.d. 6,173 6,173 - 6,173 2005 n.d. 4,249 4,249 175 4,074 2006 n.d. 8,478 8,478 140 8,338

Source:PhilippineForestryStatistics

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5.4 CEMENTBONDEDBIO‐COMPOSITES

Other bio‐composites in themarket are agri‐based cement bonded(CBB) boards and fiber cement boards (FCB). There are only twoagri‐based cement board plants in the country and one large fibercementboardplant.ThetwoCBBplantsareownedandoperatedbyarchitects who produce boards which are used in their respectivehousingprojects.About65%ofproductionareboughtbycontrat

Fiber cement (fiber reinforced cement composite) was originallydevelopedbyJamesHardiein1980.Oneofthemainingredientsoffiber cement products is cellulose fibers from wood or non‐woodsources which are added to reinforce the cement composite. Also,smallamountsofchemicaladditivesareutilizedtohelptheprocess,or provide products with particular characteristics (Golbabaie, M2006). There isonlyoneproducerof fiber‐cementboard in thecountry which is traded under the brand Hardiflex. This usesimportedvirginpulpfiber.

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6.0 BIO‐COMPOSITESINCONSTRUCTION

Bio‐composite products have found increasing applications in housingconstructioncompared toother industrial applications. Plywood is stillthemost common typeofbio‐compositeusedbybuilding contractors. Allrespondentshaveusedplywoodand fibercementboards in theirprojects,while50%and25%haveusedparticleboardandblockboard,respectively,in their projects. Thesewereused as ceilings and interiorwalls; but onlyfibercementboardswereusedasexteriorwalls.

Table8.Usesofbio‐compositesinconstructionProduct ApplicationPlywood Ceilings,interiorwalls

Fiber‐cementboard Ceilings,interiorandexteriorwallsBlockboard Interiorwalls

Highdensityfiberboard Ceilings,interiorwallsParticleboard Ceilings

Cement‐bondedboard Ceilings,interiorwalls

Intermsoftheproductmix,anaverageof66%ofthebio‐compositesusedintheir construction projects is plywood. However, fiber cement boards,which were introduced in the country ten years ago have eaten into themarketshareofthemore“traditional”panelproducts. Anaverage23%ofbio‐compositesusedbytherespondentsisfibercementboards.

Table9.Extentofuseofbio‐composites.Product Average%ShareUsedin

ProjectsPlywood 66

Fiber‐cementboard 23Blockboard 15

Highdensityfiberboard 13Particleboard 7

Cement‐bondedboard 2

Suitabilitytothestructurebeingbuilt,durabilityofthematerialandqualityseems to be themost important attributes considered by the respondentswhenchoosing the typeofbio‐compositematerial touse. One implicationhere is the importance of durability as an attribute. Taken in conjunctionwith the findings that fiber cement boards have eaten into the share of

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plywood, this again reflects the perception thatwood is not as durable assay,cement. Price isalsoa less importantconsiderationthandurabilityorsuitabilitytospecificuse.

Table10.Attributesconsideredinchoosingtypeofbio‐compositeused.Attribute Importance

1=mostimportantSuitability 1.6Durability 1.8Quality 2.5Availability 4.0Specification 4.6Price 4.8Appearance 5.6

7.0 GROWTHANDRESOURCESUSTAINABILITY

Bio‐composites will always be acceptable materials for construction andfurniture. However, new bio‐composite products that substitute directlywithanotherbio‐composite, affecthowmarket shares are re‐aligned. Theintroduction of fiber‐cement boards for instance has cut into the marketshare of plywood, although it is still the most popular bio‐compositematerialused inconstruction. Ontheotherhand fibercementboardsandfiberboardshavedifferentapplications. Thus,marketshareof fiberboardsbasicallyremainunaffectedbyfibercementboards.

The growth of the bio‐composites industry will depend on the growth ofindustries dependent on it and on the introduction of new products,technologies and new applications. Fiber‐cement board, introduced tenyearsago,isthelatestbio‐compositetobeintroducedinthemarketandhasmanagedtocarveanicheintheconstructionsector.Eightyninepercentofplywoodproducers and users believe that usage rate for this productwillincrease significantly in the next three years (Table 11). This reflects theperceptionthatfibercementboardsareathreattotheplywoodmarket.Ontheotherhand,only54percentoftherespondentsareoptimisticthattherewillbeasignificantincreaseindemandforplywood;31percentbelievethatdemandwillremainbasicallyunchanged.

Therehasalsobeenasurgeintheuseoffiberboards,asseenintheincreaseoffiberboardimports.About80percentoftherespondentsthinkthatinthenextthreeyears,fiberboardusagewillincrease.

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Table11.Respondents’perceivedtrendindemandforbio‐composites

% of Respondents Product Increase Decrease No change

Sig. Not Sig Sig Not sig Plywood 53.8 7.7 - 7.7 30.8 Fiber cement board 88.9 - - - 11.1 Blockboard 42.8 28.6 - - 28.6 Particleboard 33.3 22.2 11.1 11.1 22.2 MDF 50.0 33.3 - - 16.7 HDF 14.3 14.3 14.3 57.1

Of the bio‐composites in the country, plywood is perhaps the mostchallenged in terms of rawmaterial sustainability. Unlike new compositeproducts which use smaller elements, plywood production still relies onwhole timber. Although these are sourced from plantations rather thanfrom natural forests, very few (30%) bio‐composite producers think thatthere are enough raw materials to sustain production (Table 12). Incontrast,70%oftherespondentsthinkotherwise‐‐therewillnotbeenoughrawmaterialstosustainproduction.

Reasonsgivenbyboth sidesare conflicting. Thosewhobelieve that therewill be enough resources consider falcata as fast‐growing and sustainableandthusseenoreasonwhydifficultiesinsupplyshouldoccur.Ontheotherhand, most producers believe that replanting efforts fall short ofexpectations because of lack of government support. These conflictingperceptionsactuallypoint togeographicaldifferences in thesupplyof rawmaterials. Those who don’t find it difficult to source raw materials areactually located in a region where replanting efforts are relatively strongand their proximity to plantations make it easy for them to acquire rawmaterials.Apparently,thereisnotimbersurplustomeettherequirementsofplywoodproducerslocatedfartheraway.

Supplydifficultieslimitproduction.Onerespondentoperatesforonlythreedaysaweekduetolackofveneerlogs.Often,theyhavetobuyveneerfromveneer plants located in another region in the country, just to sustain thethree‐day‐a‐weekoperation.

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Table12.PerceptionsonrawmaterialsustainabilityYES,

therewillbeenoughrawmaterialstosustainoperations

withinthenextfiveyears

NO,therewillNOTbeenoughrawmaterialstosustainoperations

withinthenextfiveyears30% 70%

“Falcataisasustainableplantationspecies”

“Replantingoffalcataiscontinuous”

“noreforestation;nogovernmentsupport”

“Yearlyconsumptionexceedsreplanting”

“Mostlocalfarmersdonotwanttoreplantduetothemanyrestrictions(regulations)imposed…incuttingtheirowntrees”

“lessattentiongiventoreplanting”

8.0 CONCLUSIONANDRECOMMENDATIONS

Therewillalwaysbedemandforbio‐compositesbecauseofitswiderangeofapplication in the housing and furniture industries. This demand is metthroughlocalproductionandimportations.Althoughthecountryproducesplywood, HDF, blockboard, particleboard, fiber cement boards andwood/agri‐basedcementbondedboards,sizeableimportationsindicatethatlocal production could not satisfy the volume requirements, and mostprobablythequalityrequirementsofthelocalmarket.

Theplywoodindustrywasinitsgrowthstageintheearly60’s.Duringthisperiod,efficiencyandproductivityofplywoodplantsestablishedduringthisperiod was quite high because equipment and machinery were still new.Today, most of the plywood plants have antiquated equipment andproductivity has remained low (Candelaria, C., 2007). This leads touncompetitivepriceandquality,incomparisonwithotherbio‐composites.

Plywood production depends heavily on timber. The two opposingperceptionsonthesustainabilityofwoodresourcesforplywoodstemfromdifferences in the status of plantation development in the locality.Replanting and plantation development efforts of the private andgovernment sector should be doubled to increase the timber supply baseandthusmeetthevolumerequirementsofplywoodproducers.

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Theissueofqualityisamajorconcernofbothproducersandconsumersofbio‐compositeproducts.Onereasonfortheincreasingmarketshareoffibercement boards, aside from the perceived durability, is the substandardqualityofplywood.Buildingcontractorsspecificallycomplainofundersizedpanels. Plywoodproducers,ontheotherhand,recognizethatsubstandardplywood produced by small players can also affect market shares ofproducerswhostrivetopreservetheir“PSMark”ofquality.

Qualitystandardsforplywoodhavebeeninplaceandareconstantlybeingreviewed. The recent agreement forged between PWPA and the BPStowards strengthening product standard implementation for plywood is awelcome development. Strict implementation of quality standards acrosstheplywood industryshouldgivea fightingchance for the industry towinbackthesharelosttonewproducts.

Qualitystandardsshouldnotbelimitedtoplywood.Standardsshouldalsobe developed for wood‐based and agri‐based cement bonded boards toensureconsumerconfidenceontheproduct, improveitsmarketabilityandsales, and encourage private investment in CBB production. FPRDI is thelead institute in the countrywhich has the capability not only to conductresearchonbio‐compositesbutalsotodevelopstandards.

Bio‐composites competewith each other for a share of amarket that hasremained fairly constant. Thus the share of the pie of traditional bio‐composites is affected by the introduction of new products such as fibercement boards, which has a wider range of application, particularly inhousingconstruction. Plywoodproducershave reportedlyexperiencedontheaverage,a25%decreaseinsalesduetotheshiftingpreferencetowardsfibercementboards(Candelaria,C.,2007).

To ease market share competition within the traditional constructionindustry, newmarkets should be developed. This requires exploring newapplications for existing bio‐composites such as in packaging, anddevelopingproductsthatwillservethenon‐traditionalwoodmarkets.Thisalso necessitates that the industry keep pace with developments in bio‐compositeresearchtoensureitsviability.

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REFERENCES

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2. Candelaria,C.(2008)“StatusofthePlywoodPlantsinLuzon”

3. Golbabaie,M.(2006)“ApplicationsofBio‐compositesinBuildingIndustry”DepartmentofPlantAgriculture,UniversityofGuelph,Ontario,Canada,Dec.12,2006.

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