Million-Capacity Plant Changes Hands! Why Did Luli Acquire Guangxi Dekede Li?

March 12, 2026 | Source: News Department, China Wood Industry Network

On March 7, Lu Li Group announced a major development: it has completed equity transfer agreements with Guangxi Deko New Materials Group Co., Ltd. and Guangxi Deli New Materials Co., Ltd., officially bringing the two companies under the Lu Li Group’s umbrella and making them core member enterprises of the group.

Particleboard Industry acquisitions and consolidations are far from isolated cases. In October 2013, Fenglin Group acquired a 75% equity stake in the Fenglin Huizhou Plant, adding particleboard production to its operations and expanding its business into the man‑made board sector. In February 2023, ST Jinggu acquired a 51% equity stake in Huiyin Wood Industry for 270 million yuan, thereby increasing its annual output of particleboard to 230,000 cubic meters and medium- to high-density fiberboard to 240,000 cubic meters. Fiberboard Its production capacity has been brought under our control.

At a critical juncture in the industry’s current development, Luli Group has secured a combined OSB/FOSB production capacity of 1 million cubic meters from Guangxi Deko and Deli in a single transaction—marking the largest single-capacity acquisition in the industry to date. This not only signals Luli Group’s official entry into the Guangxi production base but also stands as a landmark event in China’s particleboard industry, heralding an accelerated phase of leading-company consolidation and “big fish eating small fish,” thereby reshaping the industry’s competitive landscape.

Filling Regional Gaps: A Ten-Billion-Yuan Investment Targeting Guangxi

As the largest man-made board and pulp–paper integrated base in the country, Guangxi boasts得天独厚 forest resources, a strategic coastal outlet for trade with ASEAN and the Belt and Road Initiative, and substantial policy benefits from strong government support for development. The region has fostered 2,351 enterprises above designated size and established 45 forestry industrial parks, giving rise to an industrial cluster with an annual output value exceeding 180 billion yuan. By 2025, Guangxi’s man-made board output is expected to surpass 75 million cubic meters, firmly cementing its position as the nation’s leading producer—making Guangxi an indispensable battleground for domestic man-made board enterprises.

Shouguang Luli Wood Industry Eco-Industrial Park

As the core business segment of Luli Group, Luli Wood Industry has been deeply engaged in the OSB/FOSB sector for many years. It has strategically established four state-of-the-art industrial parks in Shouguang, Shandong; Anfu, Jiangxi; Xintian, Hunan; and Guangyuan, Sichuan, covering basic board products, high‑quality finished boards, and end‑use furniture. Currently, Luli Wood Industry’s annual OSB/FOSB production capacity has exceeded 4 million cubic meters, firmly positioning it among the industry’s leading players in China’s particleboard manufacturing sector. By leveraging standardized furniture as a key growth driver, the company has set up subsidiaries in Southeast Asia, Japan, South Korea, Dubai, and other regions, tapping into both international and domestic markets and resources to create a new industrial chain layout that is rooted in the domestic market while embracing both internal and external opportunities—laying a solid foundation for global expansion.

The acquisition of Guangxi Deke and Deli not only enabled Luli Wood Industry to rapidly secure mature OSB/FOSB production capacity and fill the gap in its regional footprint in South China, but also sounded the charge for its subsequent “Five-Year Intensive Efforts” strategic plan, marking the beginning of a new journey toward large-scale expansion.

On the other hand, Deko and Deli’s production lines went into operation in 2020 and 2024, respectively. The entire line is equipped with Germany’s Dillinger intelligent production system, featuring long‑board slicing, continuous flat pressing, automated board inspection, and intelligent packaging—embodying Industry 4.0/5.0 digital lean manufacturing. In addition, the company boasts a provincial-level R&D laboratory, with a technical team deeply rooted in the engineered wood panel industry, ensuring mature processes and stable product quality. With Guangxi’s “golden benchmark” for high‑end particleboard—million‑level production capacity, state‑of‑the‑art equipment, zero‑formaldehyde technology, dual barriers in both raw materials and location, and a seasoned market team—the company has bypassed the lengthy cycle of building its own production lines, making it the optimal springboard for Luli to achieve nationwide expansion and realize its hundred‑billion‑yuan strategic vision.

It is reported that in the next five years, Luli Group plans to invest a total of 50 billion yuan, deploying 10 modern man‑made board industrial parks across Guangxi. The group intends to develop and plan 10 million mu of high‑quality forest land as a stable raw material reserve, build 20 million cubic meters of high‑end man‑made board production capacity, and establish a full industrial chain system spanning from forestry cultivation to high‑end furniture, ultimately achieving annual sales revenue exceeding 100 billion yuan.

This ambitious strategic initiative will not only help Luli Wood Industry further consolidate its dominant position, refine its nationwide industrial layout, strengthen its supply chain integration capabilities, and advance the expansion of high‑end manufacturing, but also open up convenient access to the South China, Southwest China, and ASEAN markets, thereby establishing a regional development loop that integrates “resources + production + market.” At the same time, it will significantly enhance the manufacturing standards and market competitiveness of Guangxi’s board and furniture manufacturing industries, contributing to the high‑quality development of the local forestry sector.

The Matthew Effect is intensifying, making industry consolidation inevitable.

For the particleboard industry, the core significance of Luli Group’s recent acquisition lies in sending a clear signal: the industry has officially entered a deep integration phase characterized by “big fish eating small fish,” where scale and integrated operations have become the key competitive advantages. The pace of industrial consolidation and restructuring continues to accelerate, and the “Matthew effect” will become increasingly pronounced. Small and medium-sized enterprises that lack cost advantages and have weak risk resilience are inevitably facing the fate of being acquired and integrated—or, in some cases, being directly phased out.

According to exclusive statistics from China Wood Industry Network, in just two short years—from 2024 to 2025, the particleboard industry added 47 new production lines, increasing capacity by 20.1 million cubic meters. Meanwhile, market demand continues to shrink, and the imbalance between supply and demand has become increasingly pronounced. Against this backdrop, companies in the industry are generally facing multiple pressures, including soaring inventory levels, downward price pressure, and declining profitability; some small and medium-sized enterprises have even fallen into the difficult predicament of losses or near‑shutdown.

Guangxi Deko New Materials Group Co., Ltd.

Looking at the broader trends in industry development, overcapacity inevitably leads to intense competition and industry consolidation: inefficient capacity is rapidly phased out, industry concentration rises swiftly, and market share continues to gravitate toward leading enterprises—those that leverage their advantages in capital, technology, and distribution channels. Through acquisitions, restructurings, and capacity integration, these leaders are able to expand their production scale, enhance their bargaining power, continuously squeeze the operating space of small and medium-sized enterprises, steadily increase their market share, and ultimately move toward a “oligopolistic co-governance” model dominated by a handful of top players.

In contrast, small and medium-sized enterprises lack the capital support needed to expand production and upgrade their operations, making it difficult for them to enhance their competitiveness. Caught in fierce price wars, they struggle to counter the scale‑cost advantages of leading companies, and the pressure to survive only grows with each passing day. If they don’t want to be phased out of the market, they are left with just two viable paths: either focus on a specific niche segment, cultivate it deeply, build distinctive competitive advantages, and avoid direct competition with industry leaders; or be acquired and integrated, forging deep ties with leading firms in order to secure more stable business support and broader growth opportunities.

Guangxi Deli New Materials Co., Ltd.

As Ruili Group stated in its announcement, the robust infusion of capital, meticulous optimization of management practices, and comprehensive technological upgrades will enable Guangxi Deko and Deli to receive all‑round, multi‑dimensional, and deep‑level empowerment, thereby achieving a comprehensive leap in production capacity, product quality, and operational efficiency.

It is foreseeable that this year‑start acquisition spree is merely the prelude to deep industry consolidation. As the process of capacity elimination continues to accelerate, the particleboard industry may soon usher in a new round of even more intense reshuffling!

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