Plywood prices in Japan seem to fell short, as Ta Ann Holdings Bhd. said in a quarterly review when releasing its January-March 2016 financial results.
Yet, the company expects prices to recover, even if the plywood demand in Japan is still low, as reported by The Star Online.
“Given the low plywood inventory in Japan, the commencement of the new financial year and a stronger yen, plywood purchase to replenish the stock should be in the pipeline. Coupled with the infrastructure construction works for the upcoming Olympics games, plywood demand is expected to increase,” added the Sibu-based company Q1/2016 report.
Ta Ann’s pre-tax profit declined from USD $8.16 million in the Q1.2015, to USD $4.26 million. Regarding the timber products, the profit reached USD $2.3 million, down from USD $7.99 million. The total revenue of the company declined from USD $53.8 million in the Q1/2015 to USD $52.9 million in the Q1/2016.
The drops in sales were caused by a 13% decline in plywood sales volume and 33% drop in the logs export volume.
Compared to the Q4/2015, the average selling price of plywood products and export logs declined by 11% and 10%, respectively. Also, their sales volumes dipped by 7% and 5%, respectively, according to The Star Online.
Ta Ann produced 193,442 m3 of plywood in 2015, compared to the 207,441 m3 produced in 2014. Out of this, the company sold 180,625 m3, less than the 203,274 m3 sold in 2014. Japan was the largest market, where Ta Ann sold 92% of their plywood products, followed by Australia (6%) and Taiwan and Singapore (1% each).
The demand in tropical logs is expected to remain stable and the production volume to rise during the quarter. In 2015, the company’s average selling price of exports logs increased by 6% compared to the previous year.