Recently, the EU 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 that a new round of trade barriers is still difficult to determine, but it will certainly have an impact on furniture exports, which will reshuffle the industry.
It is understood that the new directive is the deepening and refinement of the European Union's Wood and Wood Products Regulations (eu) 995/2010, which was formally adopted by the European Parliament and the Council of the European Union in October 2010. It is required that the wood products imported into the EU market must obtain the Forest Stewardship Council. (FSC) certification, applicable to forest farm enterprises, forest products direct or indirect processing enterprises, forest products trading enterprises.
New implementation of corporate costs
The implementation of this new regulation has a greater tendency to trade barriers. In order to comply with the new EU directives, relevant furniture manufacturers need to adjust some suppliers and re-select raw materials that meet the certification requirements, which will lead to increased costs and lower price advantages, resulting in shrinking business volume.
At present, there are problems such as illegal logging in the countries where logs and timber products are supplied, and the use of “illegal logs†is mostly for small and medium-sized enterprises. The introduction of directives may cause such enterprises to abandon the European and American markets. “After all, SMEs rely on low prices to attract customers. If the labor cost advantage is reduced, if the procurement order requires logs with 'ID card', the competitive advantage will disappear.†Mr. Liang, the head of Times Furniture Co., Ltd., analyzed In terms of FSC forest supply certification, there are relatively few raw materials, and on the other hand, companies have to bear additional certification fees.
She also believes that some furniture manufacturers in Shunde use rubber wood a large proportion, but some suppliers do not have FSC certification. "Because rubber wood belongs to crops and does not belong to the forest category, these problems need to be gradually solved."
In fact, 100% of the wood used as raw material is legal or difficult to obtain FSC certification. About 10% of the wood is certified globally, and less than 1% of the wood is certified in the Chinese market. In addition, the standards of the institution do not recognize each other's standards, which increases the difficulty of legality.
Environmental protection requires high acceleration industry shuffling
“The implementation of the new regulations will inevitably lead to the reshuffle of the industry, which may cause many small and medium-sized wooden furniture export enterprises to lose some price-sensitive customers and even be forced to withdraw from the European market.†Foshan Zhihao Furniture Co., Ltd. Jianhua said.
The implementation of the new regulations is a challenge and an opportunity for Shunde furniture export enterprises. Many companies believe that the new regulations will help the industry to reshuffle, raise the threshold to eliminate irregular enterprises, and will promote the regulation of furniture enterprises.
“Because of the high demand for raw materials procurement, it is now easy to deal with the new order.†Mr. Liao, the general manager of Shunde Baotian Furniture Co., Ltd., mentioned that the company had requested some European and American customers a few years ago and implemented it according to high environmental protection requirements. Most of the wood used comes from qualified timber agents, and imported New Zealand pine, rubberwood, eucalyptus, etc. all hold legal certificates and can withstand inspection.
At the same time, some innovative companies have begun to explore different ways, such as opening up new markets in the Middle East and Russia, establishing raw material supply groups or developing bamboo products. “Bamboo has a strong ability to regenerate and grows in just one or two years, unlike wood, which requires decades of growth.†A person in charge of a furniture company said that although bamboo products also require certification, they will become the future trend from the perspective of growth cycle and environmental protection.
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