Economists often cite capital spending levels as a barometer for the industrial climate. If they’re right, judging by the current scale of investment in machinery, conditions in the UK timber processing sector are set fair.
According to some of the leading wood processing machinery manufacturers and suppliers, 2003 was generally buoyant, with a sales upturn after the 2002 Woodmex show continuing through the year.
Some report a slowdown in the past two months, but they attribute this largely to a pre-Christmas hiatus and say that order books point to another pick up in business.
Several companies stressed they have not been racking up profits in the past 12 months, despite the positive sales environment.
“It’s been very competitive and we haven’t been able to increase margins,”said one agent/distributor. However, he added, the level of competition in the machinery market did not reflect the state of the timber industry in the UK.
“What has put the pressure on is that much of the Continental European machine market has been in the doldrums,” he said. “For German and Italian producers, the UK has been one of the few bright spots. The economy has held up, interest rates are still low and timber processing firms and end users are taking the opportunity to invest and modernise. As a result, European machinery producers have focused their sales efforts here – visit a UK airport on a Monday and you’ll find it full of Italian machinery reps!”
Construction demand
Returning to the rising sales curve, most machine makers said that demand has been strongest for equipment for processing construction timber products and joinery.
“The shopfitting and furniture sectors haven’t performed as well, but we’ve had a very good year with CNC routers and joinery machines going to companies servicing new housebuilding,” said SCM Group (UK) sales director Mike King. “They report a tremendous comeback for timber windows, plus strong demand for doors and stairs and general joinery.”
SCM’s CNC router business has also been boosted by structural change in the industry.
“The lack of skilled machinists is shaping sales trends – companies can’t get the trained people so they’re going for a machine that can automatically perform a whole range of functions, like our 5-axis Prisma 7,” said Mr King. “We’ve got customers with as few as four employees investing in this type of equipment.”
Weinig had a record year in the UK in 2003 – incoming orders reached £16m – and it also reported strong sales at the hi-tech end, with the UK proving one of the best markets in Europe for its top end Unimat 3000 Brillant moulder.
“Customers are looking to increase competitiveness with more automated and flexible equipment that requires less setting up time,” said a Weinig spokesperson. “In line with this, we’ve also had a strong year in mechanical handling equipment.”
Weinig reports increasing interest too in machinery aimed at boosting productivity and timber use, notably its optimising Dimter cross-cuts, Raimann multi-rips and Grecon finger-jointing equipment.
“We’ve targeted the UK’s need to use more and add value to home-grown timber and we’ve taken customers to look at how companies elsewhere in Europe use finger-jointing, laminating and optimising technology,” said Weinig UK managing director Malcolm Buchanan.
Weinig has also focused on the revival of wood window making. “The trend is increasingly towards factory finishing and our latest production lines are even selling to some quite small manufacturers,” said Mr Buchanan.
RW Wood Machines also highlighted a trend in the UK towards more sophisticated, automated equipment. “We’ve had a particularly exciting response to the latest machine from Ulmadan which enables manufacturers to substitute MDF with chipboard panels and replaces conventional edgebanding,” said RW’s managing director David Thompson-Rowlands. “The system is ideal for panel specialists, but we’re also doing trials with door makers.”
Both Wadkin Ultracare itself, and distributor AJ Dalton reported rising demand for Wadkin moulders.
“We didn’t plan to continue making moulders when we took over Wadkin,” said Wadkin Ultracare managing director Peter Smith. “But we’ve responded to customer demand and we’re now back up to levels of a few years ago.”
Customer confidence
Dalton director Francis Dalton said: “We’re not talking sales records, but the joinery market seems pretty healthy and customers have got their confidence back in the brand. They know Wadkin planer-moulders are available again and that they’ve got the maintenance and spares back-up.”
Wadkin Ultracare also reported good things for its new lines of Taiwanese-made moulders unveiled last year and said that overall its sales were up 15-20% on 2002.
Dustraction was among the companies reporting a dip in business at the end of 2003, but this did not prevent it achieving a 25% increase in turnover for the year as a whole.
“And indications are that things are picking up again,” said Steve Matuska. “Sales fell in October and November, but were on target in December. We can’t really explain the slowdown, but perhaps companies sidelined capital spending to focus on getting orders out before Christmas.”
Another key factor affecting the wood processing machinery market this year was the introduction of new PUWER safety standards. Broadly these made it compulsory to use limited cutter projection tooling and advanced braking systems on certain types of equipment (with others having to be brought up to standard in 2005). The new rules prompted some companies to upgrade old equipment, others to replace it.
Mr Smith said the regulations also contributed to an upturn in sales of tool grinders. “There’s a growing realisation that however advanced your moulder is, for instance, it’s no good if it’s backed up by a 38-year-old grinder covered in sludge.”
Tool producer Unimerco also felt the impact of the new regulations. “There was a mad dash among customers to bring tooling up to scratch,” said the company’s sales director for wood Terry Manning.
PUWER developments
Combined with the construction of Unimerco’s £4m state-of-the-art new factory and HQ in Staffordshire, plus an upturn in activity in Ireland, the PUWER developments made it a “very, very busy” year for the company.
And Mr Manning felt that the new rules would have ongoing effects, in particular compounding trends towards the use of more sophisticated tooling and a more holistic attitude to machinery performance.
“Our big growth area has been in PCD tooling and we see that continuing,” he said. “Demand is also growing for our system optimisation service where we advise customers on optimising their production.”
Dalton’s initially feared the new rules would hit its refurbished machinery sales. “I think there may have been a perception that because machines are second-hand, they couldn’t meet the new regulations,” said Mr Dalton, “but now we’ve got the message across that we rebuild equipment to full PUWER compliance, this side of our business is picking up.”
Another rapidly growing area for the machine sector has been service and maintenance contract work. Mr Buchanan believes that the new regulations have also influenced this area. “It’s helped people realise that they should not only be maintaining their machines, but be seen do be doing so and a service/maintenance contract is one way of doing that.”
Service and maintenance
Wadkin Ultracare also reports a strong year for its service and maintenance operation, and no sign of a slowdown in 2004.
“This area was the poor relation in the woodworking sector, but that’s no longer the case and demand is growing across the spectrum of businesses,” said Mr Smith. “Companies are beginning to realise that, if the competition has a service contract in place, they can’t afford not to. There are also more options available. We offer five different service contracts to suit the individual company and we service all types of machine.”
Interestingly, bandsaw manufacturer Stenner reported that 2003 was also a good year for British-made exports.
“Our overseas sales have been very strong,” said Stenner managing director Doug Shopland. “The strength of the euro has helped – it’s made us twice as competitive without having to do anything – and we’ve also sold equipment to Poland and the Baltic states, including horizontals and log break down machines. We also see good opportunities in the Far East and there’s been a revival in the US and Australia.”
For 2004, machine suppliers’ outlooks range from “cautious plus” to “very good”. The forecast global economic upturn is expected to sustain demand for machinery in the UK, with some of the competitive heat being drawn out of the market by a recovery in demand on the Continent.
And Woodmex, brought forward to general acclaim to October, is expected to give the market a further boost. “We’re looking forward to the show and are taking our biggest stand ever,” said Mr Manning at Unimerco.
