A retrospective look into the Japanese woodworking machinery industry (Part 2

By Szeto Hiu Yan

Masanori Imoto, a respected member who is also the President of IIDA Kogyo Co., Ltd

With less houses built in the future due to depopulation, many companies in Japan’s wood industry, which include wood products manufacturers and woodworking machinery manufacturers, have started to venture overseas in recent years to seek export opportunities.

“For now, most of Japan’s export markets are still in their early stages. Some of the housing and building materials manufacturers as well as loggers are exporting to Asian countries, mainly South Korea, Taiwan and China,” said Imoto.

Furniture manufacturers are also expanding overseas, mostly targeting countries in Europe and the U.S..

In Japan, the plywood sector is currently the strongest sector in the wood industry due to its extensive application in house construction, fl oorings and wood packaging, simultaneously driving up sales of plywood manufacturing machines. With the government’s push for the use of domestically harvested wood, plywood made with local timber has grown by leaps and bounds.

“Plywood plants in Japan are huge and some manufacturers of plywood machinery have even succeeded in exporting some machines,” Imoto said.

Some of the more prominent plywood machinery manufacturing companies in Japan are:

Manufactures the rotary lathe in plywood machines. 50 per cent of their products are exported to Russia, China, Canada, the U.S., Korea and Southeast Asian countries such as Malaysia and Indonesia

Gluing machine manufacturer

Pressing machine manufacturer

Rotary lathe manufacturer and a competitor of Meinan

Sanding machine manufacturer

Pressing machine manufacturer

“ We used to import around 81 per cent of our raw materials from Malaysia, Indonesia and China, but they stopped exporting logs. As there is now an abundance of domestic timber, we are using more Japanese timber – Sugi (Cedar), Hinoki(Cypress) and Karamatsu(Larch),” said Imoto.

For plywood production, the share of domestic wood used by local manufacturers is on the rise, reaching 80 per cent in 2016, according to the 2017 Annual Report on Table 1 Forest and Forestry in Japan released by Japan’s Ministry of Agriculture, Forestry and Fisheries. Total amount of plywood supplied/demanded in Japan saw a generally downward trend since 2000, mirroring total wood consumption in Japan. However, the consumption of domestically produced plywood has surged quite drastically since 2000. Amount of domestically produced plywood has increased from 138,000 m3 in 2000 to 2.49 million m3 in 2010 and 3.87 million m3 in 2016.

Unsurprisingly, given the infl ux of domestic plywood, the amount of imported plywood has plummeted over the past 20 years. Compared to 13.7 million m3 of plywood imported in 2000, there was only 7.06 million m3 of plywood imported in 2010 and 6.37 million m3 of plywood imported in 2016.

The self-suffi ciency rate of plywood supply also soared from a mere 1 per cent in 2000 to 26.1 per cent in 2010 and 37.8 per cent in 2016.

The total value of plywood imports has seen a gradual fall since hitting a peak of 221.94 billion Yen or approximately US$2.06 billion in 2014. Total plywood import value in 2018 was 194.82 billion Yen or approximately US$1.81 billion. As seen in Table 1, the top seven plywood exporting countries to Japan have seen a general slide in plywood exports supply since 2013, with the exception of Vietnam.

As mentioned in part one of this report, Japan’s forests are mature for harvesting in recent years and the Japanese government has been trying to push for more logging activities through taking up a more active role in forest management and structural reform.

Source: Japan Customs

Imoto pointed out that one of the biggest challenges faced by the industry now is the oversupply of Japanese logs, resulting in below market prices which is too cheap for loggers to earn any profi ts. To help ease the oversupply, the government has been supporting the industry through various policies in the past 10 years.

“20 to 30 years ago, we only used 15 to 20 per cent Japanese logs, we have now reached 36 per cent. It will continue to increase. Some logs are also being used for biomass energy as they need big logs to burn. We have huge biomass stations and the main energy used is from wood.”

“The Japanese are becoming less reliant on plywood imported from Southeast Asia. On top of that, a new policy introduced two years ago required for every prefecture to have at least one plywood manufacturer, thereafter boosting the sales of plywood machinery,” said Imoto. On a personal note, Imoto thought that this has now resulted in “too many” plywood manufacturers in the market.

As Japan’s population falls, a prolonged decline in the number of houses built is expected. According to MLIT, there were 942,370 new housing starts across Japan in 2018, a 2.3 per cent drop from 2017 and the second year in a row to see a decline.

“My own prediction is that, in three years’ time, the number of new houses will reduce further to 650,000,” remarked Imoto.

Japan’s total population in 2019 stands at 127.44 million, based on statistics from the internal aff airs ministry. The total population in Japan has been on a decline since reaching a peak of 128.1 million in 2008 and is expected to decrease to 88.08 million people by 2065, according to the 2017 White Paper on Land, Infrastructure, Transport and Tourism in Japan.

As demand for new houses drops, house renovation may become the next trend. MLIT is already promoting house renovations to achieve long-life housing and co-habitation of multiple households, such as three-generation households.

The government has also introduced the Promotion of Wood Use in Public Buildings in 2010, a policy that requires all public buildings of three storeys or lower to have a wood structure.

“The pre-fabrication (or pre-cut in Japan) machinery companies that used to supply machines to house builders in Japan are therefore shifting their businesses from housing to commercial buildings. It is the same for house builders who are now seeking opportunities to export made-in-Japan houses to China, Taiwan, South Korea and Russia. If all goes well, pre-cut machines can be exported as well,” said Imoto.

In particular, Japanese building companies are looking into exporting pre-cuts such as beams, pillars, mouldings, windows, doors, wooden houses.

To top it off, with mass engineered timbers such as cross laminated timber gaining more acceptance and popularity, Imoto shared that grading machines and moisture content grading machines produced by Japanese companies are also expected to gain more interest from export markets.

Industrial grade moisture meters, which use microwave to measure moisture content, usually do not cost more than US$22,000. Industrial grading machines cost around US$10,000 or less, depending on the speed of the production line. The higher the production speed, the faster and costlier the grading system required.

All sawmills and buildings must have their moisture content and beam strength taken for Japanese Agricultural Standard (JAS), in order to obtain building approval.

Japanese Agricultural Standard (JAS) requires all engineered wood’s moisture content to be less than 12 per cent; for laminated beam, grading systems are used to check for the strength of the beams. There are also special earthquake regulations for wooden high-rise building.

According to Imoto, wooden structures are now allowed to be built up to four storeys. New regulations will be issued in 2020, where wooden structures will be permitted to go even higher.

UTILISING AUTOMATION WITH A DIFFERENT SYSTEM Japan’s timber industry has long relied on technology to ease manpower woes. The pre-fabrication industry uses CAD/ CAM software, for example. Due to the modest size of Japan’s woodworking factories, the amount of manpower that can be hired is limited and factories have long depended on automation.

A diff erent kind of system is used in Japan since there are often only three to four workers in a plant. Production volumes of Japanese woodworking factories are also moderate in scale.

Moving forward, the association is exploring new opportunities and markets for its members. Last year, nine companies exhibited at a Russian trade show under a Japanese Pavilion. It was their second time in Russia. “It is our new strategy. We have also invited the Russians to exhibit at our show,” said Imoto. ℗