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Thailand is Full of Rubber, so the Market Environment of the Wooden Pallet Industry is Well

Wood pallet, sometimes called skid, is flat transportation structures that support goods in a stable manner when they are lifted by forklifts, pallet trucks, front loaders, work protection devices, or other lifting equipment, which can improve processing and storage efficiency. Wood pallet has multiple advantages such as high strength and simple manufacturing process, and show the advantages of light weight, sturdiness and durability. Since its invention in the 20th century, it has been able to work perfectly with modern packaging such as cardboard boxes and intermodal containers commonly used for bulk transportation, so it has greatly replaced old crates and wooden barrels.

Thailand generally uses pallets of 1200mm x 1000mm, one of the six pallet sizes approved by ISO, which is more suitable for export from Asia to Europe and the United States, because this size is well integrated into the systems of the two regions.

Wood pallet are generally made of oak and pine according to their materials. Oak is a high-density hardwood, which is very suitable for pallets that must carry heavy, fragile goods. Its usability is strong and wide. Markets such as housing or furniture manufacturing usually leave a large amount of oak left behind, which is then used for pallet production. Pine is commonly used in pallets. This soft wood allows the product to have a higher weight ratio and is easier to dry, which helps prevent contamination by fungus, mold or other pests. Industries such as pharmaceuticals or food and beverages have high requirements for the cleanliness of pallets. Therefore, pallets produced with a mixture containing pine wood are very suitable for these industries.

Pallets are often used to stack, store, protect and transport materials in the process of material handling equipment such as forklifts, pallet trucks or conveyors, storage in racks or bulk warehouses, or in transportation vehicles. In addition, many manufacturing companies also purchase pallets to store and transport goods.

Analysis of the Wood Pallet Industry in Various Regions of Thailand

After a period of development, the industry is in a growth period with relatively low concentration. The top three companies are CHEP, New P.C. Pallet and KWE-Kintetsu World Express (Thailand) Co., Ltd., with revenue market shares of 14.98%, 5.52% and 4.15% in 2019, respectively.

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Among ASEAN countries, GDP of Thailand ranks second, with an average annual economic growth of more than 5%, thus its market potential is huge. South Thailand is the largest revenue market, with a market share of 55.40% in 2015 and 54.85% in 2020, a decrease of 0.55%. East Thailand market and northeast Thailand market rank second and third, with market shares of 19.04% and 9.79% in 2019.

At present, Thailand is the largest rubber exporter and the largest producer of natural rubber in the world, which has a complete rubber product manufacturing production chain to fully meet the import orders of all countries in the world. Its strong export capacity and diversified export products guarantee global transportation and logistics, and further promote the development of the wooden pallet industry.

Thailand Wood Pallet Industry Has Outstanding Advantages and Great Market Potential

With the improvement of environmental protection awareness, people pay more and more attention to recycling. The raw materials of wood pallet are renewable. Scrapped and disassembled wood pallet can be reused many times, usually for 5-7 years. Relying on these advantages, wood pallet is being used more and more widely in different departments such as manufacturing, logistics, and transportation for stacking goods within the length of warehouse shelves and frequent transportation, handling, and loading and unloading.

Thailand has a huge market potential, As the core of the economic radiation circle, which can radiate other ASEAN member states and countries that have established free trade areas or close economic partnerships with Thailand. Over the years, the country has implemented a free economic policy, the economy has grown steadily, and the tourism industry has flourished. In addition, Thailand has complete infrastructure, providing foreign investors with complete infrastructure and high-quality services, and guaranteeing the work and life of foreign businessmen, all of which provide huge investment opportunities.

This shows that Thailand has a good business environment. According to the Doing Business 2020 Report issued by the World Bank, which includes 190 economies, Thailand ranks 21st, up 6 places from 27 last year. This can stimulate market vitality and consumption, enhance Thailand competitiveness, and release the economic potential of domestic demand, thereby further promoting the market for wood pallet in transportation and packaging applications.

According to research, the total sales of the Thai wooden pallet market in 2015 was 38.47 million U.S. dollars, and by 2020 it will increase to 47.98 million U.S. dollars. Due to the inherent advantages of wood pallet and the growing transportation and logistics industries throughout Thailand, the Thai wooden pallet market is expected to experience moderate growth during the forecast period. We predict that by 2027 the market value of wood pallet can reach 73.96 million U.S. dollars. The compound annual growth rate of wood pallet from 2019 to 2027 is 4.63%.

Although the increase in sales of smart phones, the popularization of the Internet and the development of the e-commerce industry have stimulated the demand for logistics services, which in turn strengthened the growth of the pallet market. In addition, the economic recovery is accompanied by the rapid development of industrialization, and consumer demand for recyclable and consumable pallets in the construction and residential industries continues to increase. However, Thailand wood pallet are also facing many threats such as related regulations, substitutes, and rising raw material costs.

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