Eighteen months on from the first lockdown of 2020, British sawmills have become used to working within the health and safety guidelines. And although none would exactly describe operations as “normal” – as in the pre-Covid definition of “normal” – all are working at full capacity.
They are also united in praise for their teams, both on the factory floors and in the offices.
“As a business and individuals we have observed and adhered to government guidelines and responded to the various challenges this has presented across the group, factoring in the nuances in approach north and south of the border,” said Graham Blyth, sales director of James Jones & Sons Ltd.
“We must applaud the efforts of our staff, whose endurance and resilience has enabled us to continue working through the Covid crisis.”
Similarly, Tony Hackney, chief executive of BSW Timber Ltd, said the support received from colleagues “who have been key to the continuity of our operations has been outstanding”.
At John Gordon & Son Ltd (Gordon Timber), joint managing director Scott Gordon said he “genuinely values what the staff have done”.
“It’s been a tough period for everybody and people have got right behind us, both in terms of sticking to the regulations to keep instances of Covid away and in reacting to this very, very strong level of demand. They’ve done what they can to maximise the output.”
He added that as well as the systems in place at the sawmill, such as temperature check points, employees have been encouraged to take lateral flow tests.
And anyone who has to self-isolate is on full pay, rather than sick pay, so they suffer no financial loss if they are unable to work.
The aforementioned demand has been well documented in TTJ over the last 18 months and the British mills have been in the thick of it. This time last year there was an expectation that the surge in demand created by stay-at-home consumers’ home and garden improvements would abate, but that simply hasn’t been the case.
“Phenomenal and prolonged”, is how Scott Gordon described it. “It’s kept going non-stop and I’ve never known a period like it in 30 years.”
He added that demand is across the range of products, with some hot spots, such as garden landscaping sleepers. There’s also been “a huge kick” in demand for C16, he said.
The availability – or lack of it – of sawn timber rather than its price is the crux of the matter at the moment but having said that, British timber is still competitively priced against imported.
“The differential between British and imported timber remains higher than it has been historically,” said Mr Blyth.
“British timber is priced incredibly competitively, particularly as we have seen an increase in the demand for it over the last 18 months,” agreed Mr Hackney. “As the demand for timber worldwide continues to increase, we expect to see British timber becoming the most competitive option for most merchants in the future.”
He added that the Crown distributor scheme, which was designed for independent merchants, has been a great success.
“We expect to exceed our 100-distributor milestone before the end of the year and will look to extend it to BSW Timber Solutions,” said Mr Hackney. “By the end of 2022, we are confident we will reach 200 distributors. The scheme brings us closer not only to our customer, but the end user, providing us with better strategic relationships right across our customer base.
“Lockdown has presented an opportunity for home-grown British brands to demonstrate innovation, agility and, most importantly, a fighting spirit,” he continued.
“Throughout the pandemic, we have kept our operations open, ensuring continuity of product availability. Demand has been strong across our entire product range, and over the last 18 months we have seen an increase in demand across a multitude of sectors from DIY right through to major infrastructure projects,” said Mr Hackney.
Log availability has been an issue for some countries – Ireland, for example – but the British mills have fared better.
“It has been difficult but we have got by,” said Mr Gordon. “All the sawmills are extremely busy and all are trying to eke out more production, so any slack in the system in terms of stock has been hoovered up. We are still able to secure all the logs we need, although not necessarily at the prices we want to see.
“But we have all got to share in what is going on here, so hopefully the growers are getting an attractive return, as we are and as our customers are.”
Graham Blyth agreed that growers should also be reaping the benefits, adding that, given improving market prices for standing and roadside timber, price inflation has resulted in an increase in material brought to market.
“In Scotland, the planting regime is strong and long term forecast and availability is good,” he said. “This is in contrast to the longer term raw material availability forecasts in England and Wales.
“As a group, we are committed to a planting programme of 2,000ha by 2025 (400ha/year) and with the land already in hand to achieve this, the company hopes to achieve a total of stored carbon potential in excess of 300,000 tonnes by 2025.”
The BSW Group includes Tilhill Forestry and this alliance stands it in good stead, said Mr Hackney.
“Our business is in a strong position because of the relationships we have developed through Tilhill,” he said. “We are embarking on an incredibly exciting planting programme with new opportunities and new clients. In most cases, these are being supplied by our own nurseries [Maelor Forest Nurseries, acquired in 2019], so we’ve placed ourselves in good standing regarding supply into our mills moving forward.”
As mentioned, all the sawmills are working at full stretch, mostly on the existing shift patterns and are benefiting from significant capacity improvements and high levels of investment over recent years.
Gordon Timber has slightly extended the working day, adding 10-15% in terms of hours and commensurate production.
“I think we have to be mindful of the fact that it has been a period of strong trading, so everyone wants to make the absolute most of it, but at the same time you have to watch out for the burn out factor,” said Mr Gordon. “There is only so much that people can do. You’ve also got the maintenance of the machinery to consider, so there is a limit to how much we can push on. It’s a balance.”
Sawn timber certainly isn’t sticking around in the yard very long and stock levels are “probably close to record lows”, said Mr Gordon, adding that lead times at this point in a typical year would be three to four weeks and are now 12-14 weeks.
“There is very strong demand for any form of wood at all,” he said. “People are even keen to take some of the lower grade products that take a little bit more shifting and cut and carve it themselves, or make do with what they can.”
He added that a lot of product was on allocation and that the company hadn’t taken on any new customers.
“We really are committed to the customers that have been loyal to us over the years,” said Mr Gordon. “They all want a little bit more, so we are trying to ration that out to make sure we are fair with everyone.”
Standout products were sleepers, for which there had been “insatiable demand”, all types of fencing and “4.8 of anything – ungraded, kiln-dried, C16, heat-treated…..”
Mr Gordon added that the demand for heat-treated timber had highlighted the shortage of capacity in the UK.
“That was coming in around January last year before this [Covid] all kicked off and there was concern over the change in the law brought about by Brexit,” he said. “This has just magnified the issue that there is not enough heat-treated capacity in the UK.”
James Jones said it had been necessary to introduce some form of allocation in order to ensure increased demands of its entire customer base were satisfied.
“Balancing the conflicting demands of market sectors has been challenging but servicing and supporting our existing customer base has remained a key priority,” said Mr Blyth.
BSW reports that its ability to replenish stock levels is currently being restricted by demand.
“It has become evident that communication between our customers and suppliers is key in forecasting demand and replenishing stock levels effectively and efficiently,” said Mr Hackney.
“We’re seeing an increase in demand for construction timber products,” he continued. “The government emphasis on revival in construction, combined with the increase in the RMI sector, has meant this sector in particular has seen real growth in demand.”
BSW has experienced the same fencing and landscaping products bonanza as other mills but anticipates a decrease in this.
“It is traditionally seasonal and we expect demand to reduce slightly as we enter Q4,” said Mr Hackney. “If demand continues at the current levels until Christmas, like last year, this will affect our ability to rebuild stock ahead of next season.
“As we are continuing to see the economy racing to recover, the demand for pallet and packaging products is constantly on the rise. The movement of material is vital to this, and we are seeing this market return at levels higher than pre-Covid levels.”
Investments and acquisitions have continued in the sector, despite the pandemic.
“Our capex programme, whilst disrupted, was completed in 2020 and a significant capex investment programme continues through 2021,” said Graham Blyth.
“We acquired GT Timber on March 1 this year (ttjonline March 1), which increased annual sawn output to 800,000m3 and thereby consolidated our position as the UK’s largest privately owned sawmill, timber engineering and pallet manufacturing company. The early stages of integrating GT Timber into the group have gone exceptionally well.
“We developed the Fence Master app (ttjonline March 25) to guide the end users through an easy step-by-step process, from choosing the fence design to working out an exact specification of the fencing components needed and creating a 3D model of their fence, through to listing their nearest James Jones & Sons stockist,” he said. “Further enhancements and improvements of the app are in the pipeline.
“We launched a new version of JJI Design software in July (ttjonline July 2), which was the most advanced release to date with a number of enhanced design features,” continued Mr Blyth. “JJI Design is the design software platform created by our Timber Systems Division to support customers in specifying and designing JJI-Joists.
“And we completed the installation of two new biomass boilers at Mosstodloch and Aboyne with a combined investment of £5.4m (ttjonline February 23). We operate biomass plants across the group operations and the combined biomass energy for kilning reduces CO2 emissions by 17,200 tonnes per year.”
Mr Blyth added that the company works closely with its customers to collaborate on bringing new ideas, product improvements and concepts to market.
BSW has also expanded, acquiring SCA Wood UK – now called BSW Timber Solutions – at the end of last year (ttjonline December 1), shortly after acquiring the UK’s largest timber harvesting company, Dick Brothers Forestry (ttjonline November 16). And Bayram Timber was acquired this summer (ttjonline June 4).
“The acquisition of SCA Wood, Bayram Timber and Dick Brothers enhances BSW Group’s supply to customers and are focused on adding value to our established product range,” said Mr Hackney. “What we have identified is our need to be more circular in our approach to the supply chain, enabling us to engage with both our customers and suppliers on multiple levels. These acquisitions enable us to add to the security of the supply of timber to all markets.”
In other investments, BSW recently installed a new cross-cutting line at its Newbridge-on-Wye mill (ttjonline July 1) and Mr Hackney said the company is “continually investing in our sawmills in order to increase capacity and improve efficiency.”
In terms of product brands, IRO Timber and Alchemy WPC (composite decking) are both reported to be doing well and new products for both brands are expected to be launched in 2022.
The new autoclave Gordon Timber installed last year (ttjonline October 30, 2020) has stood the company in very good stead.
“We’ve been able to cope with the level of demand for treated material that we have experienced, so it’s gratifying that we did the right thing there,” said Mr Gordon.
He added that the company is committed to £1m of capex per year and that more investments will follow next year.
Looking ahead, the growing demand for timber and timber products as a sustainable material choice is seen as presenting a number of opportunities for the sector.
“It’s still an evolving picture so I think there will be more merchants and end users who will be seeing and using British timber for the first time and that has got to be good for the long term,” said Scott Gordon.
“I guess the challenge is that it doesn’t feel like it can go on forever and we would all like a nice soft landing, a period of stability and that we can maintain the proper value of timber,” he continued.
“Timber prices have rocketed up but it was amazingly cheap before. I am hoping that there has been a correction just to reflect what is involved in terms of long rotation times for the growers, the investments that the sawmills have made and what we are all doing as an industry to make it an excellent product that is great value to the country.”
