Market environment

Raute’s customers are the producers of veneer, plywood and LVL (Laminated Veneer Lumber). Their products are typically used in construction, housing-related consumption, international trade and transportation. 

Global uncertainty reflected in the demand for Raute’s offering

The global demand for the end-user products of Raute’s customers remained low due to the downturn in the construction markets. This has especially impacted the demand for softwood plywood. Declining interest rates have not yet had a positive impact on the housing market.

The demand for hardwood plywood and LVL (laminated veneer lumber) has remained more stable, and the demand for special applications in niche market segments like LNG (liquid natural gas) vessels has strengthened the demand for birch plywood. The European birch plywood market demand is also supported by the EU sanctions against the entry of Russian birch plywood into the European market.

The presidential election in the USA postponed certain investment decisions of Raute’s North American customers, and that impact is still visible. Public statements regarding new tariffs to be imposed by the US administration have caused additional instability in the market. The war in Ukraine continues to impact the market sentiment in Europe, and the increased geopolitical tension is causing turbulence in the Asia-Pacific region and China.

Overall, the recent developments have had a negative impact on the investment activity of Raute’s customers worldwide. Our customers continue to be in a wait-and-see mode in relation to making firm investment decisions. It now seems that a wider recovery in Raute’s markets is postponed well into 2025.

Plywood, LVL and veneer industries

The annual end-user market for plywood and LVL products is around EUR 50 billion* globally. The development of demand for end products will significantly steer the demand for Raute's products and solutions. The size of the  plywood and LVL machine market relevant to Raute's Wood Processing business is approximately EUR 600 million*, while for the Services business, Raute's market potential is several hundred million* euros, depending on the  definition. Regarding the Analyzers business, the market is currently developing at a rapid pace, and the relevant annual market potential for Raute is estimated to be over EUR 60 million*.

In addition to the plywood and LVL technology markets, Raute also has a strategic goal to grow in other engineered wood product areas, which will significantly increase market potential in the coming years. In addition to economic cycles, market demand is affected by customers' long-term planning prospects and requirements related to sustainability and resource efficiency.

* Management estimate