As the USD 1.6 trillion Saudi construction industry booms, the demand for wood continues to rocket. From plans to construct 1.5 million new homes by 2030, and the growing need for doors, windows, furniture manufacturing, and interior design sectors – the KSA market is extremely promising for the timber industry. Further, with the global wood market set to hit USD 903 billion by 2026, and with the Saudi government’s massive growth plans, rising demand, and rapid technological advancements, the wood and woodworking industry in Saudi Arabia is heading toward unprecedented expansion.
According to Statista, Saudi Arabia’s wood market is projected to amount to USD 2.21 billion in 2023. Aiming to unite the entire wood industry, the inaugural Saudi Wood Expo is set to take place from September 2 – 4, 2024 in Riyadh. Showcasing the full spectrum of industry expertise and innovation, the show is a platform to access the growth opportunity in this thriving industry and help drive vital business and leads.
Ahead of the show, we talk to key industry experts – Roderick Wiles, Regional Director, American Hardwood Export Council (AHEC); Anton Svetsov, Area Sales Manager / Category Manager – Decking, hermory; Sarah Johnson – Consultant, American Softwoods; Noraihan Abdul Rahman, CEO, Malaysian Timber Council (MTC); and Sven Gustavsson, Manager, Softwood and Value-Added Softwood Lumber, Quebec Wood Export Bureau (QWEB) – who share their views on the timber industry in the MENA region.
RW: AHEC has been actively involved in promoting American hardwoods in the Middle East for 25 years. It has long been an important region for American hardwood lumber and veneers and for red oak lumber exports, in particular.
AS: Thermory has been actively working in the Middle East for over 10 years. The region is of significant strategic importance to us due to its rapid development and growing demand for high-quality timber products. The Middle East’s emphasis on innovative construction and sustainable materials aligns perfectly with Thermory’s offerings, making it a key market for our expansion and growth.
SJ: American Softwood members have been exporting to the Middle East for many decades. It is a very important region, one that is seeing continuous growth and demand for US softwoods.
NAR: MTC’s Regional office in Dubai was established in 1999 to promote and develop the Middle Eastern market for Malaysian timber and timber products. The Dubai office covers the Middle East and Northern Africa (MENA), the Gulf and Africa regions. Through this office, MTC keeps abreast of developments in these regions and closely monitors the ever-changing market landscape to facilitate trade opportunities for Malaysian timber-based industry members. The Middle East has been a traditional market for Malaysian timber and timber products especially sawntimber, plywood and fibreboard. These products are mainly used in the construction sector in the Middle East region.
SG: QWEB has been active in the Middle East region for the last 25 years. Our member companies have been selling for even longer than that. The Middle East is a priority overseas market for us. At this moment hardwood shipments are steady while softwood volumes are below our long-term average.
RW: It is a large region and extremely varied in market characteristics, comprising three distinct sub-regions of North Africa, Levant and Arabian Gulf. The Gulf region has seen solid growth in demand for American hardwoods for many years. The construction boom in Saudi Arabia is now driving up demand rapidly and we anticipate that this will continue for years to come. American hardwoods are in high demand for furniture, joinery and flooring and the boom in hotel and private residence construction in the UAE and Saudi Arabia has led to demand for key American species, such as oak and walnut.
AS: The Middle East, and Saudi Arabia in particular, is a dynamic and evolving market with substantial opportunities. Saudi Arabia’s Vision 2030 is a key driver for global construction industry and sustainable development. We view Saudi Arabia as a critical partner in our efforts to provide sustainable and durable timber products, contributing to the region’s architectural and environmental goals.
SJ: Obviously there is a lot of opportunity in Saudi Arabia, and it is developing at a fast pace. The Vision 2030 outlined a plan for construction investment worth trillions of dollars, and we are keen to develop more contacts in the region that provide opportunities for continued growth in American softwood exports.
NAR: The Middle East is a significant player in global trade due to its strategic location at the intersection of three continents: Europe, Asia, and Africa. Two of the leading countries in the region are the UAE and the Kingdom of Saudi Arabia (KSA). These countries account for about half of the region’s imports and exports. The region’s growth of the building and construction sector in recent years has led to an increase in the use of timber and timber products as construction materials.
It has become a global economic powerhouse due to its vast oil and gas reserves and is gradually diversifying towards a more resilient economy. Governments have taken an active role in supporting the construction industry through strategic planning and investment in infrastructure.
Saudi Vision 2030 is one example of ambitious national development plans that prioritize investments in the construction sector as a key driver of economic growth and diversification. Current and upcoming construction projects such as The Red Sea are significant drivers of demand for timber and timber products and represent a significant market for Malaysian suppliers to provide high-quality
timber and related products to meet the growing demand of the construction and infrastructure development sectors in KSA.
SG: Middle East and Saudi Arabia is an important market for our hardwoods in upscale projects while softwoods are mainly destined to concrete formwork and packaging. We believe the Saudi market holds an important potential to increase our sales.
RW: In Egypt and Morocco, there has been a distinct shift towards red oak from white oak, while demand for all American hardwood species in the Gulf region has grown over the years. Overall, the value of U.S. hardwood lumber shipments to the region has double in the past twenty years.
AS: In recent years, we have observed a marked increase in the demand for timber products in the Middle East. This shift is driven by a growing awareness of environmental sustainability and a preference for premium materials in both residential and commercial projects. The market is increasingly seeking out durable, aesthetically pleasing, and eco-friendly timber solutions.
SJ: The region is always seeing fluctuation in demand driven by economic influences. We are seeing a greater awareness of using timber in the construction of buildings as more architects are focused on reducing carbon emissions. For this reason the versatility of and aesthetic of softwood lumber is highly in demand. On the one hand it is a resilient reliable building material, ideal for structural applications but also has the aesthetic to be popular and durable for interior designs and projects.
NAR: The demand and consumption of timber in the region, especially in the UAE and KSA, has been on the rise. While concrete, steel, and other conventional building materials are commonly used for general construction in the region, timber is mostly applied for architectural heritage. Global environmental issues have led the region to prioritize sustainability and environmental awareness in construction with the aim of reducing carbon footprints.
This has led the industry to seek more eco-friendly alternatives, and timber, as a renewable resource, has been the primary choice. It is worth noting that the market is shifting towards woodbased construction, transitioning towards sustainability, which is in line with Saudi Arabia’s commitment to achieving netzero carbon emissions by 2060. The availability of its national timber certification scheme – the Malaysian Timber Certification Scheme (MTCS) which is endorsed by the Programme for the Endorsement of Forest Certification (PEFC), makes Malaysia well-positioned to supply both legal and certified timber and timber products that suit the needs of the region.
SG: Large residential and commercial projects create demand for our niche hardwoods. Overall construction and economic activity have a direct impact on the demand for our softwood.
RW: All the larger countries in the region have their roles to play in driving demand. In Egypt, the primary use for American hardwoods is in furniture, while in Saudi Arabia and the UAE, it is for joinery. American red oak is the main U.S. hardwood species shipped to the region, and this is important for the American hardwood industry, which produces more red oak than any other species.
The product preferences in this region remain somewhat similar. In 2023, Saudi Arabia’s main imported products (wooden furniture, sawntimber and fibreboard) are mirrored by UAE (wooden furniture, fibreboard and sawntimber), Turkiye (sawntimber, plywood and wooden furniture), Egypt (sawntimber, plywood and fibreboard) and Iraq (wooden furniture, fibreboard and plywood).
SG: Saudi Arabia holds the biggest potential in the region while Egypt and other countries in the region remain important.
AS: Saudi Arabia is currently at the forefront of driving timber demand in the region, largely due to its ambitious construction projects and urban development initiatives. However, we also see strong demand in the UAE, Qatar, and other GCC countries. Overall, the common trend is a growing inclination towards long lasting yet natural materials.
SJ: Turkey has seen strong growth for a wide range of softwood lumber. Traditionally Egypt is a strong market for our products, particularly Southern Yellow Pine and we expect to see further growth there in the coming years. Pakistan has been an excellent market for Eastern White Pine, and Western Red Cedar is popular in UAE.
NAR: In 2023, the export of timber and timber products to the Middle East amounted to USD 12.06 billion (-9.76 percent year-on-year) with Saudi Arabia (USD 2.5 billion, – 5.98 percent) being the top export destination, followed by the United Arab Emirates (USD 2.4 billion, -2.27 percent), Turkiye (USD 1.71 billion, -7.01 percent), Egypt (USD 1.16 billion, -22.45 percent) and Iraq (USD 1.13 billion, -4.13 percent). The top four products being exported to the region in 2023 were wooden furniture (USD 4.07 billion, +0.49 percent), sawntimber (USD 1.84 billion, -23.32 percent), fibreboard (USD 1.32 billion, -5.33 percent), and plywood (USD 1.08 billion, -6.01 percent).
RW: 2024 will be a tough year for the entire global timber industry, with major reductions in demand in key markets such as China and Europe. There are also new challenges to face, such as the European Deforestation Regulation (EUDR). However, for American hardwoods, there is strong and growing demand in the Middle East and also in Mexico, Southeast Asia, Australasia and India. We are confident that the U.S. hardwood industry will continue to do well in these markets and that we will continued growth across the Gulf and Saudi Arabia, in particular.
AS: We are optimistic about the industry outlook for this year. With ongoing infrastructure projects and increasing awareness of sustainability importance, we notice meaningful growth in the demand for timber products across the Middle East. Thermory is well-positioned to meet this demand with our range of premium, durable and aesthetic timber solutions. We are committed to supporting the region’s construction goals and contributing to its sustainable development.
SJ: As sustainability credentials become a driver for purchase, it is important to note that North America has more certified forests than anywhere else in the world which immediately gives buyers peace of mind. U.S. forestry standards ensure a continuous cycle of growing, harvesting and replanting with under 2 percent of U.S. working forests harvested each year, all of which is regrown.
NAR: The construction industry in the region continues to encounter challenges due to the fluctuation of prices caused by inflation. Despite the stability of oil prices, the uncertainty caused by the ongoing Red Sea conflict is still present. The World Bank economists forecast that the economy in the Middle East and North Africa (MENA) will grow at a modest rate of 2.7 percent in 2024, up from 1.9 percent in 2023. There are still numerous exciting building projects in the Middle East that are in progress. According to MEED project reports, UAE and KSA’s 2023 had record-breaking performance in terms of projects awarded, and 2024 is predicted to witness even more.
SG: We believe we can increase our sales to Saudi Arabia and other countries in the region. We recognize the challenges that the geopolitical situation and their impact on the local economies creates.
