The Argentinian panels sector is growing these days despite the ongoing economic recession in the country.
So far, the economic reforms, initiated by the government of libertarian President Javier Milei, who took office in December, have not allowed to solve the problems of poverty and unemployment in the country, although the introduced cost-cutting measures helped to restrict the world’s highest inflation that touched 250% recently.
That contributed to the growth of economic activities in the country and its industrial sector, including the segment of panels, which benefited from the maintaining of generally stable demand from the local furniture sector.
In fact, an active development of the panel industry in Argentina began in the 1960s despite the period of political instability and military dictatorship in the country. However, during the 1980s it faced stagnation, the outflow of investments and plant closures. The industry resumed its growth during the 1990s, due to a significant flow of direct foreign investment, taking advantage of the growth of an area of cultivated forests and a relatively low price of land. Finally, a series of economic crises in the country during the 2000s led to record state debts of the country, posing a threat of bankruptcy for the entire national economics and its major industrial sectors.
Still, despite this, the development of the panels sector is ongoing, which is also thanks to a rich raw materials base of the country. According to the Ministry of the Environment and Sustainable Development of Argentina, the country has 1.3 million hectares of forest plantations (1% of the world’s forest plantations) and almost 54 million hectares of native forests. Moreover, according to Leandro Mora Alfonsín, professor at the University of Buenos Aires, the country has at least 3.7 million hectares of forests to expand, without affecting sites of high conservation value, or native forests.
The major provinces in terms of wood and panels production are Misiones, Corrientes and Entre Ríos, which together account for 92% of commercial wood production in the country.
Despite the rich raw materials base, according to representatives of some leading local producers (such as Egger) the current per capita panels’ consumption in Argentina remains generally low at present, while since the beginning of the 2010s the annual growth rates of the industry has been insignificant, not exceeding 1-2%. Probably the best dynamics is shown by the OSB segment of the market in terms of growth rates. Prior to 2020s a significant part of local demand for panels was met by imports, however in recent years the situation has changed, which is reflected by the establishment of some domestic production facilities, primarily of small and medium size.
As for Egger, the company remains one of the leading local producers of panels in Argentina at present. In 2017 it acquired the Masisa plant in Concordia from Chilean company Masisa SA, which allowed it to increase its share up to 35% of the local market. The plant, located in the Concordia Industrial Park, Entre Ríos, is a complex designed to produce 500,000m3 of MDF, PB, melamine, mouldings and coated boards per year.
The company sees further prospects for its expansion in the Argentinian market. This is also reflected by earlier statements made by Enrique Cresto, Mayor of Concordia during his visit to the Egger plant, according to which the company plans its further expansion with the aim of the increase of supplies of finished products both to domestic market and for exports. As for foreign supplies, particular hopes are put on the increase of exports to Mercosur states, the United States and Canada.
For domestic market, the biggest hope of Egger and other leading local producers is the domestic furniture sector, where the demand has increased in recent years despite economic volatility.
In terms of structure, the market is highly fragmented being primarily dominated by companies of small and medium size. Prior to December, 2023, a significant part of them depended on state and municipal orders, however with the arrival to power of Javier Milei their portfolio of orders has significantly declined due to massive cuts of state expenditures. According to Román Queiroz, president of the Argentine Federation of the Timber and Related Industries (Faima), this is part of the bigger negative trend, which already led to massive layoffs in major timber-producing provinces such as Misiones, Corrientes and Santa Fe.
“Some 97% of the industries that make up Faima, including the panels’ sector, are SMEs,” Román Queiroz commented.
“For now, the industry has fallen. The industry depends heavily on public works and municipal orders. All work requires wood and wood-based products. About 70% of the domestic market goes to public works.”
According to him, the current crisis also affects furniture sector – the main consumer of panels in the country which, according to Mr Queiroz, experiences serious problems these days.
Despite the existing problems, the development of the industry is ongoing, which is reflected by the growth of its investment attractiveness and the expansion of some major local businesses in it.
An example is Marcelo Mindlin, a well-known Argentinian tycoon and the owner of, Pampa Energía SA – the largest independent energy company in the country – which currently builds its furniture and panels’ business on the basis of its Fiplasto subsidiary. The latter was last year acquired by Mindlin from the German company FV, while on December 4 it took over the majority stake in the local chipboard manufacturer Cuyoplacas.
As for Fiplasto, founded more than 75 years ago in Argentina, the company is positioned as the only producer of hardboard in the country. It has more than 2,400 hectares of forest plantations and three industrial complexes in the province of Buenos Aires.
According to some local analysts, thanks to the deal, Fiplasto has good chances to significantly increase its output and to became one of the leading players in the panels sector of Argentina (and possibly the entire Latin American region), which is also due to good business connections of Marcelo Mindlin with some major panels-consuming business, including local furniture producers.
There were also some reports in the Argentinian media of the planned building of a large-scale OSB facility (with the capacity up to 100,000m3) in the Misiones province of the country by a group of private investors.
The new facility was supposed to completely meet Argentinian needs in OSB and should help reduce imports, which, according to analysts of the Noticias de Micisiones business paper, were equivalent to 40,000m3 per year. Currently implementation of the project is ongoing although planned launch of the plant is not disclosed.
Most analysts believe successful implementation of the project should contribute to the further growth demand and the consumption of panels in Argentina, which remains still at a generally low level compared with some neighbouring states.
According to estimates of FAIMA and some local producers, current consumption is at around 20m3 per 1,000 inhabitants. There are plans to try and increase these figures up to 40m3 per 1,000 inhabitants in the near future, as it is today in Chile.
Most analysts believe in good prospects for growth of the Argentinian panels’ market. However, much will depend on the ability of the country to overcome its regular economic downturns and progress being made by the current Argentinian Government.
We will keep a close eye on developments in Argentina.
