world news - 21.09.2007

Brazilian furniture producers shift focus to flooring

Brazilian news reports have showed that export-oriented, high-quality wood furniture manufacturers have looked for alternatives to compensate the loss of its share in the North American market. The innovations introduced in furniture products, which were used to overcome the negative effect of the exchange rate, have been exhausted. Companies have been feeling the effect of the pressure, with one traditional furniture manufacturer in the Southern state of Rio Grande do Sul closing its solid wood furniture plant oriented to exports and making its first shipment of planted eucalypt flooring to the U.S., which was valued at USD600,000. The exchange of furniture products for flooring occurs for two reasons: (i) limited demand for the company’s high value-added furniture in U.S. markets and (ii) higher demand for Chinese over Brazilian furniture in the American market.

Although the U.S. is still the main destination for Brazilian wooden furniture exports, its relative importance has gradually decreased. In the first seven months of 2002, total exports of wooden furniture were 44% and falling to 40% in 2004. In 2007, wooden furniture exports reached only 26%, resulting in a total value of USD149.7 million from January until July of 2007. In contrast, Argentina has increased its market share in U.S. markets in the last four years, with total market value in 2004 at USD16.7 million and jumping to USD41.1 million in the first seven months of 2007.

• — Canada: Huge drop in timber supply predicted - 21.09.2007
• — Law against illegal logging to be made tougher - 18.09.2007
• — Brazilian wooden furniture exports reduced to $149.7 million in January-July 2007 - 17.09.2007
• — Stora Enso sells out in North-America - 26.09.2007
• — Egger Romania starts buying wood for new plant - 01.10.2007