Wood Composites Market - Forecasts from 2024 to 2029

The wood composites market is anticipated to grow with a compound annual growth rate (CAGR) of 5.88% between the period 2024 and 2029.

Wood composite is a material made from a mix of different ingredients. It included a range of different derivatives. The innovation of wood composites is leading to the development of renewable products with recyclable materials. The use of green production methods that use less energy and save the carbon footprint of the company is an ongoing trend. The major advantages of wood composite materials they can be extruded and and molded into products that can be applied. The wood composite materials are rot-free and have less maintenance than other materials. This makes it desirable for usage in the packaging and transport of the commodities. The wood composites are steady, and highly water resistant. The growing supply chain sector has led to the expansion of the e-commerce market worldwide, and relatively the demand for wood composite-grade crates and boxes is increasing.

Additionally, due to the growing economies of Asia and Africa, the demand from the buildings and construction industry has been expanding. The major application of wood composite material takes place in the building and construction industry, where it is preferred based on its strength, durability, and versatility. The materials are applied in the wall & ceiling cladding, outdoor decking, railings, etc. The flexibility in the design and texture in the building and construction industry leads to wider and more innovative applications.

• In India, the total capital investment outlay for infrastructure for the interim Budget 2024-25 is US$ 133.86 billion, which is an increase of 11.1% from the previous year. This is 3.4 % of the GDP.

WOOD COMPOSITES MARKET DRIVERS:

The growth of the building and construction sector

The growing demand from the building and construction industry is one of the major drivers of wood composites. Wood composites are applied in various places within the construction of the house or a building such as flooring, ceiling, decking, shading, etc. Whether it is interior or exterior the demand for wood composite material application is expanding as cheap, sustainable, hard, and long-lasting material. The recyclability of composite wood is another cause of the increase in the demand. The wood composite are produced by the method uses less energy than the production of traditional lumber, which implies it uses fewer greenhouse gases. Another reason why wood composite has been becoming the preferred choice of construction workers is its ease of installation due to its size, weight, and quality homogeneity.

It can be fit easily with common tools and methods, making it desirable for the construction market. According to the Federal Reserve Bank, the construction spending in the United States in 2023 was US$23.72 trillion. This construction spending was US$22.17 trillion in 2022. This rise in spending suggests the growing demand for construction projects and a relative increase in the construction material demand in the economy. This increases the wood composite market in the construction and building material sector.

Additionally, the demand for sustainable building materials further increases the demand for wood composites to be a more sustainable option for construction, this gives the organization more leverage in controlling their carbon footprint. The new designer portfolio such as decorative surfaces, particleboard, medium-density fiberboard (MDF), etc. further increases the market demand.

The growing demand for wood composite furniture

As the growth of urbanization is taking place the need for more furniture is taking. Wood composite material is rising in demand for the furniture across world as it is an eco-friendly, non-toxic, and odorless material. Additionally, it can be molded and used for different decorative patterns easily. The crucial aspect comes from the surface effect of plastic composite furniture, this is further enhanced using additives during production. The surface can be enhanced by the vibrant array of colors and textures. The sustainability of the material is also an important factor for the growth in demand. 

Growing urbanization is the most important factor in the demand for wood composites. Urbanization not only increases the demand for construction materials but also the demand for furniture for both interior and exterior purposes. The growth of the global economy in many parts of the world led to the growth of housing construction and further the furniture in the houses in fully furnished setups. According to the World Bank, 56% of the world’s population, that is, 4.4 billion inhabitants live in cities. This trend is expected to grow in the coming years. It is estimated that by 2050, nearly 7 of 10 people will live in the cities.??

Additionally, the expansion of urban land consumption outpaces population growth by as much as 50%, which makes it possible the create demand for new furniture and building construction materials. The furniture with modern design, fire resistance, water, termite, and borer-proof, and long-lasting are in demand for the residential and commercial setups.

Asia-Pacific region to dominate the wood composites market during the forecast period.

The major economies like China, Japan, India, and South Korea dominate the Asia-Pacific region. Some of the fastest-growing emerging economies are from this region such as ASEAN countries, such as Indonesia, Malaysia, Thailand, Vietnam, etc. International Monetary Fund estimated the economic growth of 3.9 percent in 2022 to 4.6 percent in 2023. 

The e-commerce industry in India has been on an upward trajectory with the estimated to be worth US$ 188 billion by 2025 and US$ 350 billion by 2030. This is caused by several major reasons, one being the rise of several local players like Flipkart, Nykaa, Zepto, etc. The transfer of goods and commodities needed good wood composites. Crates and pallets are the major wood composite types to be used for the composites. The likelihood of hydrophobic material is demanded for packaging and transportation.

Additionally, the growth of the China real sector further paves the way for the building and construction materials for the houses. The wood composite is a sustainable, cheap, and long-lasting product for the both exterior and interior of the houses. The authorities in China are containing the abrupt growth and making overall changes in sustainable housing for all. Real estate is the prime driver for the Chinese economy, related to the demand for raw materials in the sector.  The growth of the sector is leading to an increase in building materials.

India is developing as the increasing disposable income would lead to one of the world's largest aspirational middle classes, leading to the increased demand for new and creative furniture and its relative demand for these products. According to Lattice, the Indian furniture market is anticipated at US$ 7.92 billion in FY23, and lead to US$ 14.41 billion by FY28. According to the Trade Promotion Council of India (TPCI), India presently ranks 16th in the global market for furniture exports.

The growth of the furniture market in the region is due to driving factors like innovative eRetail, work from home, effective and fast delivery, availability of raw materials, ease of doing business, and cost competitiveness, among others.

Wood composites market challenges:

• Although the wood composites market has shown a tremendous growth possibility, there are a few challenges in the market such as limited development foundations, inadequate funding, and talent shortages. Additionally, the lack of communication and coordination between wood composites and other related industries such as furniture, home decor, building construction, etc. is holding the growth of the market.
• Systematic coordination between industries is crucial not only for standardization but also for innovation for future growth. Designers and manufacturers should come together for the integration and innovative products. This would make the path for creative engineering and advanced processing techniques.

Wood composites market Key Developments:

• In September 2023, UFP Global Holdings Ltd. acquired  80 percent of the equity in UFP Palets y Embalajes SL, for about US$ 52 million. Palets Suller manufactures machine-built wood pallets, for the ceramic tile industry, company is headquartered in Castellón, Spain. UFP Industries operates in the packaging, construction, and retail solutions sector used in many industrial applications worldwide.  
• In August 2023, MoistureShield partnered with Great Southern Wood Preserving, Inc. to expand the distribution of the newly added railing product line in states of United States. The company did want to expand its brand Oldcastle APG. The product portfolio of decking and railing across North America is key to the company's growth. MoistureShield manufactures composite deck boards with differentiated color and surface technologies that give impact and stability.
• In May 2024,  Saint-Gobain partnered with TimberHP, a manufacturer of insulating wood composites. This would allow Saint-Gobain to distribute wood fiber insulation products in North America, especially Canada. TimberHP is a startup company, for making sustainable products from wood fiber and uses residual wood chips and hydroelectricity to manufacture. This coincides with the Saint-Gobain’s sustainability targets. The major goals for these companies included high-performance, cost-competitive designs for usage, and elevating solutions to conserve energy to produce from renewable energy. Their offerings included loose fill, batt, and rigid board insulation products.

The wood composites market is segmented and analyzed as follows:

By Application

• Furniture
• Supply Chain Industry
• Building and Construction
• Automotive Parts
• Other Applications

By Types

• Plywood
• Fibreboard
• Polyethylene
• Polyvinylchloride
• Propylene
• Wood-cement
• Others

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Rest of South America
• Europe
• United Kingdom
• Germany
• France
• Italy
• Spain
• Rest of Europe
• Middle East and Africa
• Saudi Arabia
• UAE
• Rest of the Middle East and Africa
• Asia Pacific
• China
• India
• Japan
• South Korea
• Taiwan
• Thailand
• Indonesia
• Rest of Asia-Pacific