Steady as she goes seems to be the description that best summarises the current state of the British timber industry. “Surprisingly calm” is how one contact put it – with no major problems and no great excitements either.
But that isn’t to say the markets are in the doldrums. Rather, there’s a sense of a welcome respite as the industry settles after a period of rapid and significant change in some sectors and prepares to meet the opportunities presented by a number of developments.

The pallet sector has been investing in treatment plant to meet the requirements of ISPM 15 and there are no reports of problems with capacity. Demand for pallets that meet the new regulations is strong, and prices are being maintained as a result. Although many customers have already made the decision to switch entirely to ISPM 15 pallets, some key markets – notably the US – have yet to implement the new regulations. When they do, demand will be boosted further and provide an additional impetus to the industry.
Suppliers of treated timber have also been investing. EC regulations that restrict the marketing and use of traditional CCA preservative and CCA-treated timber came into force in the UK at the beginning of this month. With a few exceptions, it is now illegal to place such material on the market.

Again, the rate at which the industry has invested in moving to new generation preservative treatments that comply with the new rules means there is no reported shortage of capacity. Although CCA-treated timber is allowed for a few specific applications, the general feeling is that there will be very little CCA capacity in the UK within a fairly short time. That’s because the cost of running two plants and segregating stocks for different applications is unlikely to make economic sense given the severely limited markets for CCA-treated wood.

Prices firm
Softwood prices are reasonably firm, although as always they are strongly influenced by the prices of imports. There is still good demand from the construction sector, and markets for fencing, decking and garden products have recovered from the slow start to the season caused by poor weather. With one or two exceptions there has been no significant investment in the UK sawmilling sector over the past couple of years, and there is anticipation that the next round of expenditure is not far away, which will give a fillip to the industry.

Private growers are busy harvesting to meet demand for sawlogs and, although they and their customer mills both complain that their respective market prices are too low, there seems to be a balance in supply and demand which means there’s no great pressure on prices either way.

Mills are still concerned about markets for chips; prices are very depressed and despite a lot of talk about biomass plants and continued trials, there have been no significant developments. There is reported to be a slight shortage of small roundwood for the panel processing sector. Growers have responded to price cuts from panel manufacturers by reducing production, while at the same time increasing the volume of exports, which are well up on last year.

It’s business as usual in the hardwood market – with good quality material finding ready markets, but with British-grown timber being supplemented with more and more imported species.

&#8220Private growers are busy harvesting and, although they and their customer mills both complain that their respective market prices are too low, there seems to be a balance in supply and demand which means there’s no great pressure on prices either way”

Wood is in the ascendancy – whether it’s hardwood flooring, garden products or timber frame housing. However, there’s no room for complacency. There are plenty of competitor products actively pushing to replace timber, and perhaps the biggest challenge facing the timber industry is how to market its products and solutions successfully in order to maintain and increase its market share.
Some would say that marketing has always been the timber industry’s biggest challenge – and its biggest weakness – and there are some exciting developments that have the potential to make a real difference in this area, building on the success of existing promotion campaigns.

New association
First among these is the establishment of ConFor – the Confederation of Forest Industries (UK) Ltd, which is jointly owned by the UK Forest Products Association and the Forestry & Timber Association and will operate from the latter’s offices in Edinburgh (see p6). The Forest Industries Development Council will cease operations at the end of September and its activities – and key staff – will be taken on by ConFor.

ConFor is a direct response to the Macdonald report published last year, which recommended that the UK forest industries sector should create a new single association to represent its interests.

The existing industry associations dismissed this as too radical a step, but ConFor goes a long way to addressing the essential points raised by Macdonald. An interim board has been appointed and is expected to publish a prospectus within the next week or so. This will define the purpose of the organisation and how it will be managed and funded – the latter likely to be through a combination of subscriptions and a levy on timber transactions.

Individual associations will be major divisions of ConFor and will actively continue to provide services to their respective members. The Wood Panel Industries Federation and Forestry Contracting Association have had input and support the idea. They want to work closely with ConFor but are not yet ready to become members. The Forestry Commission and the Northern Ireland Forest Service are also fully supportive. Much has still to be finalised and the agreement and active support of the various associations will be critical. However, the benefits that ConFor could offer are difficult to overstate.
In addition to representation to the government, there’s the opportunity for ConFor to be a single voice marketing British timber. There’s also the potential for ConFor to work closely with The Timber Trade Federation. How much might that collaboration deliver in terms of generic marketing of timber, both British and imported, against competing products?

Marketing opportunity
Successful marketing is essential, and involves a number of separate but related tools, one of which is exhibitions. The timber industry doesn’t have its own exhibition, but a new opportunity is now arising.

Woodmex is the UK’s exhibition for the woodworking machinery industry. By definition, visitors to Woodmex use wood, and the organisers have decided to expand the exhibition to include raw materials. One of the latest companies to have booked a stand is a leading Belgian hardwood supplier – the UK is its fastest-growing export market and it has been searching for a suitable exhibition for some time. Other timber suppliers are also taking part this year, and the organisers expect this to be a growing area.
The UK timber industry seems to be in pretty good shape at the moment – and although there’s an overall air of calm, there are also a number of developments coming together that have the potential to significantly change the way that the timber industry is represented and marketed, to the benefit of everyone.