Summary
• The US hardwoods sector now exports 40% of output.
• China is the biggest American hardwood buyer by volume and value.
• The EU is still the most lucrative market for US hardwoods by unit value.
• The EU Timber Regulation should not mean radical change for US hardwood suppliers.
• US hardwood species are proving suitable for thermo treatment and wood modification.

“If you’re not at the table, you’re on the menu”.

American Hardwood Export Council chief executive Mike Snow has a reputation for telling it like it is and his opening gambit at the organisation’s recent European Convention in Warsaw didn’t disappoint.

He was referring to the need for the US hardwoods sector to maintain its South-east Asian marketing energy levels. If anything, he said, it needed to up its game as the region’s timber markets and processing sectors evolved.

But Mr Snow’s remark could equally have applied to any of the topics discussed at the Convention, which attracted over 170 delegates – a mix of leading US suppliers and their customers from across Europe. Over two days the event addressed marketing and promotion, American hardwoods’ environmental credentials, anti-illegal timber regulation and latest R&D into increasing species’ potential applications. All areas where there was general agreement: it was dine or be dined on.

In recent years the US hardwood sector has become increasingly globalised, said Mr Snow. It used to export 10-15% of production; now that’s 40%.

Its international promotion and sales effort had also had to become more adaptable, developing in line with the emergence of new markets and shifting trade patterns.

Europe remained a key market overall for US hardwoods and this year, said Mr Snow, there had been ‘bumps’ in demand in the UK, Germany and Italy. But the “big panda” in the room was China. It was already the biggest American hardwoods buyer by volume, but last year overtook Europe in total value too.

“We have to understand that China is no longer the giant screwdriver, just importing materials and shipping out products,” said Mr Snow. “It’s rapidly becoming a country of 1.4 billion consumers too. It’s now BMW’s biggest market, for instance, and home to the seven top grossing Louis Vuitton stores.”

AHEC’s Chinese marketing reflects this burgeoning consumer boom.

“Our Shanghai office spends a lot of time with designers and developers,” said Mr Snow. “We talk to hotel contractors, we’ve fitted out showhomes and deal direct with builders.”

AHEC’s Asian strategy is also shaped by the fact that China’s upward mobility is opening the door for other countries to become the next low cost manufacturer. It is strongly targeting Vietnam, and sees opportunities in Cambodia and Indonesia.

The shifting balance of the global economy is also creating sales opportunities elsewhere. Turkey and Egypt, with their youthful populations, are hot prospects. Mexico has developed a high-end taste for US hardwoods too, and budding interest in Brazil is expected to blossom as 2016 Olympics projects begin.

AHEC’s technical publications are already in 19 languages while its website has “morphed into a global resource”. And its marketing perspective is set to become more internationalised still, Mr Snow concluded.

At the same time, it couldn’t simply shift focus from established markets, like Europe. As speakers from across the Continent made clear, economic times here are tough. “I’m not so pessimistic as I was, but not optimistic either,” said discussion panellist Belgian hardwood trader Francois Remiche. But Europe remains the Americans’ best market by unit value (paying an average US$700/m³ for its hardwoods, compared to China’s US$470/m³).

It also punches above its weight as a design and manufacturing trendsetter.

“Europe is where a lot of innovation in timber use is happening, notably in construction,” said AHEC European director David Venables. “Interest among architects and designers is growing all the time. The day before this convention, for instance, we held a seminar on timber building and it attracted 150 Polish architects.”

AHEC has also geared to capitalise on Europe’s style-setting status, he added, sponsoring architectural events, such as the UK’s Wood Awards competition, as well as furniture design contests from Barcelona to Bangkok. It also produces case studies exemplifying cutting-edge use of US hardwoods, in construction and interiors.

European regulation

Europe is also seen by AHEC as a global game changer in environmental regulation affecting the forestry and timber sector and in environmental procurement and specification criteria. One of its key focuses in this respect has been the EU Timber Regulation (EUTR), which comes into force in 2013 to cut the risk of illegally-felled timber entering the EU market. Naturally, it was also high on the convention agenda.

US hardwood as an industry may have struggled with the concept of environmental certification because of America’s fragmented forest ownership and difficulties in tracking timber to the stump. However, Rachel Butler of the European Timber Trade Federation explained the EUTR takes a different approach from certification schemes, entailing importers, which ‘first place’ timber into the EU market, implementing due diligence risk assessment to stop illegal timber entering their supply chain.

“In fact, it has come as a surprise to some traders that certification and legality verification schemes won’t be an automatic passport under the EUTR,” she said.

The regulation may require education, she added, but should not prove an undue burden to inherently low illegal timber risk suppliers, like the US. A number of European timber trade organisations within the ETTF, including the UK’s Timber Trade Federation, had already developed appropriate due diligence risk assessment systems, and the US had experience of risk assessment-based anti illegal timber regulation in its own Lacey Act.

“Lacey’s emphasis is ‘due care’, while the EUTR’s is ‘due diligence’,” said Ms Butler. “But in reality, they’re not so different.”

Rupert Oliver of Forest Industries Intelligence said that the American hardwood sector had also liaised closely with the European Commission to make sure the EUTR did not “discriminate” against it and “should be proud of its achievement”. The Seneca Creek risk assessment study AHEC commissioned several years ago also helped, underlining the minimal danger there was of illegal timber in the US hardwood supply chain. As a result, while it might need to be submitted in a particular form, existing US paperwork on provenance should satisfy the EU rules.

“Ultimately, the EUTR should create a ‘pull’ for legal timber and be a marketing tool for US hardwood,” said Mr Oliver.

Biggest life cycle analysis study

Another vital eco focus for AHEC is life cycle analysis (LCA) of American hardwoods, the evaluation of their cradle to grave environmental impact. In fact it billed the LCA study it commissioned from consultancy PE International in 2010 as the most comprehensive ever undertaken in the hardwood sector.

LCAs, said Mr Oliver, were already finding their way into business and government procurement criteria and ‘green building’ rating systems and their importance was set to grow as they also increasingly feed into Environmental Product Declarations (EPDs).

“EPDs are the equivalent of food labels and are being carried by an increasing range of products,” said Mr Oliver. “And the first American hardwood EPDs will be available for the UK, France and Germany next year.”

Chairing a discussion on the potential of LCAs and carbon footprinting for US hardwood, Jamey French of Northland Forest Products said they would help in the “essential task of selling timber as the greenest material”.

Cathy Danzer of the Danzer Group agreed: “They will show consumers the true cost of choosing one product over another. But we have to promote them strongly.”

Modification momentum

Meanwhile, the convention heard, AHEC’s efforts to enhance US hardwoods’ performance and range of applications is currently focused on exterior use. “This is an area architects ask us about more than any other,” said Mr Venables. “It has huge potential.”

Neil Summers of UK consultancy Timber Dimension has been commissioned to investigate the potential of different preservative treatments and wood modification with US hardwoods and he said the signs are promising. In 2009 an Osmose hot oil process was successfully used on a tulipwood outdoor pavilion sponsored by AHEC as part of the London Design Festival. A “big UK window manufacturer” was also now trialling the species. Various US species also responded well to thermo-treating and wood modification methods such as furfurylation and acetylation.

“Long-term test data is still needed in certain areas, but wood modification specialist Kebony has had good results with maple and Accsys is planning to produce Accoya modified red alder commercially,” said Mr Summers.

One of the final sessions of the convention, a presentation by architectural writer Ruth Slavid, on the American red oak Timber Wave project, drew the various strands of the event together. The AHEC-sponsored structure, an elaborate 12m-high spiralling arch, was built in front of the V&A museum as part of this year’s London Design Festival. Treated with the Osmose hot oil process, it showed the hardwood’s exterior potential. It was also a marketing tool, demonstrating hardwood’s technical merits to specifiers and engineers and reaching consumers too, with the structure seen by thousands of passers-by.

The Wave’s use of red oak specifically also made it even more of an environmental statement, said Mr Venables. He acknowledged that the timber is still not the most popular American hardwood in Europe. “But if we’re serious in presenting our resource as the environmental choice, we cannot ignore our most prolific species,” he said.

In short, the Timber Wave, showed US hardwoods ‘at the table’ across the board.