Ireland in October to hear about important issues affecting the international wood pallet industry.

The 66th FEFPEB (European Federation of Wooden Pallet & Packaging Manufacturers) Congress, entitled "Wooden pallets and packaging: A sustainable business in a fastchanging world" was hosted by Timcon and covered a vast range of material, including the Irish timber and forestry sector, ISPM15 developments, wood packaging in the food industry and updates from China, Japan and North America.

Delegates also had an opportunity to tour the facilities of Mid-Cork Pallets and Glennon Brothers’ Fermoy mill.

Forestry and Timber processing in Ireland

First up at the Congress was an extended look at the Irish forestry and wood processing sector and kicking off proceedings was none other than Irish agriculture minister Simon Coveney.

He told delegates that Ireland was investing €482m in its forestry sector in 2015-2020, which included 44,000ha of new timber plantations and 700km of new forest roads to help facilitate forestry thinning of small diameter logs.

Mr Coveney said the Irish forestry sector did not see any cuts during the recession in order to maintain the consistency of supply for the timber industry. Some 3.1 million m3 of roundwood was harvested in 2014 (2013: 3.036 million m3), with the volume of sawn wood going into the wood pallet/packaging sector tracking upwards every year.

"The importance of wooden pallets to transport other goods is often overlooked," said Mr Coveney.

The minister also quoted a rising trend in Irish port trade figures.

"We are now seeing record trade levels in terms of imported and exported volumes, even higher than the so-called boom times 10 years ago."

Fergal Leamy, CEO of Irish state forester Coillte, told delegates that Ireland had its highest level of forestry in 350 years, with five times the level of forests than in the 1950s.

At the moment some 80% of the fibre comes from Coillte forests, but Mr Leamy said that would change in the coming years. He said the output of forest and wood products industries was worth €2.4bn in 2014, with 2.3 million m3 of logs produced for sawmills and wood panels in 2014.

"We are committed to increasing production over the next few years," said Mr Leamy. "We as Coillte also need to enable the mobilisation of private sector material and ensure it comes to market."

In October, Coillte introduced a new timber sales system to help plan ahead and reduce volatility in the market.

Looking ahead, Coillte sees itself providing 40% of timber in 2028, with private sector supplying about 46%, and imports accounting for 4% and Northern Ireland 9%.

"We need a plan of action to agree a set of initiatives to ensure we take up the opportunities and face challenges head on."

One of the challenges will be the biomass sector’s increasing demand for wood fibre.

Irish sawmiller Glennon Brothers’ joint managing director Mike Glennon told the congress how the company was pushing the boundaries of what was possible with homegrown timber. The company has invested about €20m at its Fermoy sawmill site. He charted the meteoric rise of the Irish housing industry more than a decade ago, with new housing starts reaching 90,000 in 2006, but reducing to just 9,000 in 2011 – a major change which required Glennon Brothers and the wider Irish wood processing industry to re-position and look to develop export markets.

In 2013, the value of Irish sawn timber exports was €81m, while for wood panels the figure was €199m. Pallet wood makes up about 18% of the total Irish sawmill output, whereas construction takes up 41% of output and fencing accounts for 22%.

Mr Glennon explained how Irish sawmills had invested to expand capacity on the back of Coillte harvesting forecasts some years ago.

"Unfortunately, the expected increase [from Coillte] never materialised, leaving the sector with excess capacity of over 500,000m3." Some of those gaps have been filled by imports of logs from Scotland but this may not be sustainable in the long term. He also cited the challenge of Irish log prices being 30% higher than the UK.

Mr Glennon also described Coillte’s new timber sales system as a significant challenge and he said the coming review of the scheme would be important.

Looking ahead, there is an expected doubling of Ireland’s roundwood harvest by 2028 to 6.4 million m3, but the wood supply/ demand shortfall is expected to reach 2 million m3 by 2020. Demand for forest-based biomass for energy is forecast to grow from 1.91 million m3 in 2014 to 3.26 million m3 in 2020, an increase of 170%.

Pallet markets

FEFPEB executive board member Fons Ceelaert described the market for wood packaging as "stable", with a steady supply of pallet and packaging timber, helped by Chinese wood demand having reduced. There’s been a shift to repaired/second-hand pallets and pallet pools’ market share is increasing, while industry consolidation is also a factor.

Mr Ceelaert said wood currently had an 85% market share in the packaging sector. In Europe 401 million wood pallets were manufactured in 2013, a rise from 371 million in 2010, while the number of repaired pallets grew to 128 million in 2013 (2010: 71 million). Four-way pallets have 84% of the market and two-way has 16%.

Interestingly, the proportion of heat-treated pallets went down in 2013 (50% of all new pallets), compared to 60% in 2010. European pallet sector turnover was €1.77bn in 2013 (2010: €1.51bn).

The timber price index in Q2, 2015 showed the UK and Sweden had the highest European prices.

FEFPEB has some questions about the recycled pallet numbers and is trying to ascertain accurate details. "When we have collected all the information it could be helpful for lobbying," said Mr Ceelaert. Initial findings show Spain and Belgium are top wood pallet recyclers with nearly 80% rates. But the fact that some countries include pallet recovery use for energy incineration could be skewing the figures.

"Different scope, definitions and methodology lead to different recycling rates," admitted Mr Ceelaert.

Mr Ceelaert also gave an update on ISPM15 developments, highlighting several issues, including cases of mark falsification and differences in regulation implementation and inspection schemes in different counties. FEFPEB has appealed to the UN’s Food and Agricultural Organisation regarding the need for a global harmonisation on ISPM15.

But Mr Ceelaert said the threat of ISPM15 being extended to include intra-EU movement of wood packaging had receded. "The situation has become more at ease, with the key reason being there are no serious new infestations so I believe the priority of ISPM15 is not as high as it was in the EU," he said.

Dielectric heating as a method of packaging treatment is expected to come more to the fore in the next years, as it has been revised in the current ISPM15 draft which is currently out to member consultation. Sulphuryl fluoride fumigation is also back on the agenda as a treatment method and is included in the ISPM15 draft. Meanwhile, FEFPEB has been busy responding to false accusations from competitor packaging materials and highlighting the sustainability message of wood.

The latter forms part of FEFPEB’s "Packaging from Nature" campaign – which communicates the environmental and performance credentials of wood packaging. The campaign is in an acceleration phase. So far 310 articles have been written in the press about the campaign and over 100,000 unique users have been recorded on the campaign website.

FEFPEB is also growing, with Poland and Lithuania being new members, while contacts have been made with Latvia and the Czech Republic.

Mr Ceelaert said other important issues for the sector included the rise of biomass, the future availability of timber for wooden pallets and regulation to crack down on illegal timber (Lacey Act & EUTR).

Wood packaging and food

Olivier de Lagausie, general manager of SEIL/GROW, shared the results of research into food in contact with wood packaging. He said wood/food contact was sometimes seen as problematic but there was a lack of harmonised European regulation regarding this, apart from ECR no 1935/2004.

So the French scientific consortium EMAbois developed a research programme to identify and quantify the effects of wood packagaing with food.

First testing involved analytical chemistry and was done in two parts, testing peeled poplar and sawn pine (sapwood and heartwood) in contact at moisture contents varying from 13%-36%, with three types of food. More than 4,800 tests were carried out in the first part and 2,800 tests in the second, involving baskets of oysters, apples and salad.

The first part of testing monitored migration of molecules and the results showed molecules identified were harmless to consumer health. The second testing method identified 146 volatile molecules from poplar and pine, which were "harmless". Maximum specific migration of the molecules was 0.07mg/kg of food – basically negligible migration.

Another test using microbiology involved 11,600 tests. After 24 hours a drastic reduction was seen in microbacteria on wood, with the material showing an anti-microbial effect. Also, testing showed 99% of microorganisms on the wood do not migrate to the food.

"At this stage there is no argument for the non-use of wood in direct contact with food," said Mr Lagausie.

He said EMABois was ready to talk to national and European authorities and communicate the "very robust data we did not have before".

Mr Lagausie said the wood packaging industry now had a technical reference for contact with food.

Asia and North America

Meanwhile, a strong Asian contingent at the congress included Professor Qingyi Wu, chairman of the Asia Pallet System Federation (APSF).

He said about 970 million pallets were in use in China and the annual growth of new pallet production has been 20% over the last 10 years. In 2014 pallet production was about 140 million pallets – the growth rate dropped below 10% due to the Chinese commercial slowdown. Investment has been high in the country, with about a dozen automatic wood pallet production lines introduced there in recent years.

Toshifumi Okabe, sales director at Japan Pallet Rental Corporation, shared how plastic pallets had risen dramatically in recent years in Japan. In Japanese pallet pools last year there were 12.1 million plastic pallets, compared to 6.5 million wood pallets. RFID technology is enabling the sector to scan 30 plastic pallets at a time at the warehouse gates, allowing tracking of individual pallets and giving better control for operators.

An update from North America showed that in Canada timber is in good availability because less wood is going to China and prices are the lowest for 20 years. In the US softwood now accounts for 60% of pallets, taking over from hardwood largely for cost reasons. Some 450-500 million wood pallets are made annually in the US.