Chinese-backed manufacturers are muscling in on South Africa’s $176-million plywood market, with a new expansion programme in KwaZulu-Natal already squeezing local producers and halting eucalyptus log supply to established mills. That is according to the South African Forestry Company (Safcol), the state-owned forestry entity established in 1992, as part of its performance plan tabled to parliament this week.
Safcol has named MSFU Wood, a subsidiary of the Chinese company Zoeyol, as the operator of a flagship Pietermaritzburg plant with planned output of about 3,000 plywood boards a day, or 150,000 a month. It is the lead site in an eight-site KwaZulu-Natal expansion programme that Safcol describes as “a step change” for a region that historically carried no major veneer or plywood mills despite its large plantation estate, with 1,000 jobs riding on the project at full operational scale.
Wood Central understands that Chinese-controlled mills already produce more than 70 per cent of the world’s plywood, with Chinese-owned operations across Vietnam, Indonesia and Malaysia feeding the same global panel trade. The SA push now extends that manufacturing dominance into the Southern African fibre belt.
“China is moving from an import-from-South-Africa model to a process-in-South-Africa model,” Safcol said in the annual performance plan, noting that Chinese plywood imports to South Africa lifted by R59 million across 2023-2024 to make China the country’s fastest-growing source of plywood.
Chinese-controlled interests have built that global dominance through around 13,000 domestic mills and Belt and Road-backed offshore plant expansion, with Chinese plywood demand growing from 8 million cubic metres a year in the mid-1990s to 80 million cubic metres by 2013, as Wood Central reported on the United States’ 474 per cent Chinese plywood duty.
South Africa’s plywood market was valued at about $176 million in 2024 and is projected to grow at 7.7 per cent annually according to Cognitive Market Research, with JSE-listed York Timber, valued at R900 million and operating since 1916, historically the dominant local supplier.
Safcol notes that “Chinese operators typically deploy low-cost machinery” alongside aggressive panel pricing, with local plywood and panel producers now seeing margins eroded as Chinese-made products undercut domestic processors and reduce buyer capacity to absorb logs.
“Local plywood, furniture and board producers face margin compression,” Safcol said, with tighter fibre markets and eucalyptus pricing pressure now bearing down on Safcol’s pine customer base, and pine substitution flagged as a downstream risk if Chinese plywood captures price-sensitive market share.
The threat extends beyond South Africa to Eswatini, where Safcol says Chinese firms have approached eucalyptus growers despite the country’s diplomatic ties with Taiwan, and to Mozambique, where Beijing has agreed to fund timber-processing plants — with KwaZulu-Natal and Eswatini at risk of becoming a plywood export corridor rather than a raw-log supply zone.
Safcol’s five-year strategy targets diversified revenue streams and stronger competitiveness, though the company is operating with acting appointees in the CEO, CFO and COO roles whilst the structural shift in domestic plywood plays out.
MSFU Wood’s eight-site KZN expansion has now put 1,000 plywood jobs and South Africa’s eucalyptus log supply inside the Chinese processing chain — with Safcol telling parliament South African forestry must now compete with the same mills that built 70 per cent of the world’s plywood supply.
