New EU directive accelerates industry reshuffle leading to rising furniture costs

A few days ago, the European Union passed the "Wood and Wood Products Regulations and New Environmental Design Directive", which will be enforced in March next year. Whether the introduction of the new directive means a new round of trade barriers is still inconclusive, but it will definitely have an impact on furniture exports and will cause the industry to reshuffle.

The new directive is the deepening and refinement of the EU Timber and Wood Products Regulations (eu) 995/2010 formally adopted by the European Parliament and the European Council in October 2010. Wood products imported into the EU market must be obtained from the Forest Management Committee (FSC) The certification is applicable to forest farm enterprises, forest product direct or indirect processing enterprises, forest product trading enterprises, etc.



The implementation of new regulations leads to industry reshuffle

    "Wooden furniture exports of small and medium enterprises will lose some price-sensitive customers, and even forced out of the European market, implementation of new regulations led to the furniture industry reshuffle is inevitable." Foshan City Zhihao Furniture Co., Ltd., chairman of the left Jianhua representation.

     Furniture companies have also begun to explore different outlets for innovation , such as opening up new markets in the Middle East and Russia, establishing furniture raw material supply groups or researching and developing bamboo products. "Bamboo has a strong regenerative ability, and it only takes a year or two to grow, unlike wood that requires a decades-long growth cycle." A person in charge of a furniture company said that although bamboo products also need certification, from the perspective of growth cycle and environmental protection, it will become the future trend.

"Because of the high requirements for raw material purchases, it is now easy to respond to the new order." Mr. Liao, the general manager of Shunde Baotian Furniture Co., Ltd. mentioned that the company had responded to the requirements of some European and American customers a few years ago and implemented in accordance with high environmental protection requirements. Most of the wood used comes from qualified wood agents, and imported New Zealand pine, rubber, beech, etc. all hold legal certificates and can withstand inspection.

Facing new directives , Shunde furniture export enterprises are both challenges and opportunities. Many furniture companies believe that the new regulations will help the furniture industry to reshuffle and raise the threshold to eliminate informal furniture companies, which will promote the regulation of furniture companies.



    New directives cause furniture costs to rise

Illegal logging and other problems currently exist in the log and wood product supplying countries. Most of the "illegal logs" are small and medium-sized furniture companies. The introduction of the directive may cause such furniture companies to abandon the European and American markets. "After all, small and medium-sized furniture companies rely on low prices to attract customers. In the case of reduced labor cost advantages, if the purchase order requires logs with 'identity cards', the competitive advantage will disappear." Ms. Liang, head of Times Furniture Co., Ltd. analyzed, On the one hand, there are relatively few raw materials that have passed FSC forest supply certification. On the other hand, companies have to bear additional certification costs.

     Furniture manufacturers need to adjust some suppliers and re-select raw materials that meet the certification requirements if they are to comply with the new EU directive. This will lead to increased furniture production costs and reduced price advantages, resulting in shrinking furniture sales .

In fact, it is difficult for 100% of the raw materials to achieve legality or obtain FSC certification. About 10% of the certified wood worldwide, less than 1% of the certified wood in the Chinese furniture market . In addition, the standards of the institution and other countries are not mutually recognized, which makes it more difficult to obtain legality.

  

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