Olympia Furniture Ltd, a £25m turnover manufacturers which supplies major retailers, told TTJ the stranglehold on price and supply was becoming “tight”.
UK importers interviewed by TTJ confirmed many manufacturers were “very concerned” and that price and supply issues over the past six to nine months were “coming home to roost.”
Ann Walker, buyer at Olympia Furniture, said the company used 2440x1220mm birch plywood and hardboard in production, with the plywood price increasing from £14 a sheet to £18.53 during 2007.
“The last three to four weeks have been a nightmare,” she said. “I’ve been on the internet looking for supplies.” The company even managed to secure some hardboard from a competitor.
She said Olympia, which is in fierce competition with eastern European furniture manufacturers, is considering switching to MDF, but such a move had production ramifications.
Chris Sutton, group panel products director at James Latham, said: “The situation is birch prices are going through the roof, lead times are extended, partially because of demand, partially because of logging that did not happen in Russia because of wet winter weather.”
Large volumes of Latvian and Finnish birch ply being used for Korean containerised vessels was excacerbating the problem, he said.
Richard Lazenby, purchasing director at MLM, said many UK furniture manufacturers were on fixed supply contracts with their customers and were concerned about their capacity to compete against imported products.
“A lot of manufacturers are used to having the whip hand but it’s now a supply driven market,” he said.
He said hardboard had been a bread and butter product for a long time but the closure of several ageing EUropean hadboard plants due to EU regulations and competition from the biomass sector for raw material was affecting the situation.
