We all know times are tough in softwood. Just how tough is illustrated by the news that Rammerscales Sawmill is in receivership and that Stockwells Ltd has pulled the plug on its kilning operations. The receiver says the former ran into trouble because skin-tight margins made major outlay on a new mill unsustainable. Stockwells said its decision was due to high costs and the strong pound combining to make already competitive imported material even more of a bargain.
Add to the problems cited by these firms the dampener of the recent rotten weather, plus the knock-ons from foot and mouth, and you’ve got a gloomy mix.
But while the pressures in the sector are principally down to external factors, the actions of certain elements in the trade seem to be exacerbating the situation. According to trade contacts interviewed for our latest market report, in addition to being triggered by the current difficult climate, price cuts are being used by some to build market share, or as ‘a panic measure to sell over production’. We’re also informed that price levels are being dictated by ‘fire sales’ of distressed and poor specification material.
Even more concern is being expressed to TTJ about misrepresentation of product which, we’re told, has increased recently in both softwood and plywood sectors. It was an issue flagged up in Keith Fryer’s column last week and this week is the subject of a letter from Frank Aylott. It was also highlighted at the inaugural meeting of our new industry panel (the role of which we’ll cover in a later edition). This practice may be understandable as a means of boosting sales and margins in a tough climate, but the consensus is that it could do untold damage to timber’s image and must be stamped out by determined, concerted, industry-wide action.
