Market characteristics

The market for wood is gaining increasing importance as a sustainable alternative to conventional building materials. Current reports estimate the market value for sustainable building materials at approximately USD 475 billion in 2024, with projections indicating growth to USD 1 200 billion by 2032 at an annual growth rate of over 12%.

The market for certified tropical timber is shaped by Precious Woods and a few key competitors. A major market driver is the growing awareness of the benefits of sustainable tropical forest management as a counterforce to the ongoing issue of illegal and exploitative deforestation. Certification systems such as FSC and PEFC provide consumers with assurance that tropical timber originates from sustainably managed forests. As a result, these certifications are increasingly recognized as a competitive advantage.

Tropical timber is primarily harvested in Southeast Asia (Indonesia, Malaysia), Latin America (Brazil, Peru), and Africa (Congo Basin, including Gabon). However, illegal logging and weak law enforcement in these regions present significant challenges. As a result, companies and timber processors specializing in sustainable forestry often work in partnership with governments, international organizations and NGOs. These partnerships help to ensure that their practices adhere to the highest environmental standards.

Thanks to its unique properties, such as hardness and rot resistance, tropical wood is highly suitable for public infrastructure projects, private house and garden construction, and buildings in and around water. However, sustainable wood is more expensive than conventional timber. In sectors and markets where demand is strongly price-driven, it competes with significantly cheaper wood, which is often illegally harvested. As a result, sustainable tropical wood still holds a niche position in many areas.