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The original was posted on /r/woodworking by /u/ChangeNarrow5633 on 2024-10-24 12:34:11+00:00.

Russian plywood manufacturers are drowning under war sanctions and have nowhere to hide. That is according to the Russian-based Lesprom, which reports that Russia—until 2022, among the top 3 markets for global plywood production —is now flooding Asia, Latin America, and Africa with an oversupply of cheap wood in response to ‘crippling’ EU sanctions.

“As it stands, (Russian) capacity stands at 5,669 thousand cubic metres, with demand (into these secondary markets) just 3,192 thousand cubic metres,” Lesproom said. “This (77%) imbalance has created a fiercely competitive landscape among lean exporters, crunching profit margins.”

The problem is that manufacturers have relied on a “growth at all costs” strategy for years, hell-bent on increasing capacity to achieve economies of scale. For example, in 2021, Russia’s birch plywood capacity stood at 4,615 thousand cubic metres, projected to grow to 5,225 thousand cubic metres by the end of this year and 5,315 thousand cubic metres next year.