Sawmills and wood production industry in Canada has experienced challenging demand conditions over the past five years due to a cooling Canadian housing market and slowly recovering US housing market, says a new Ibisworld report.
In addition, the mountain pine beetle infestation in British Columbia, which is home to a third of industry establishments, is damaging a significant share of the province's timber. Despite ongoing obstacles, industry revenue has improved as a result of record-high demand for lumber in China over the period, and the resurgence of the US single-family homebuilding market in 2012. For these reasons, industry revenue is forecast to grow at an annualized rate of 5.4% over the five years to 2014.
Following a decline in revenue in 2011, brought on by an anaemic US construction sector, strong growth is projected to continue into 2014. Therefore, industry revenue is anticipated to rise 10.0% to $12.1 billion over the year due to a more robust US housing market, and increased expenditure on nonresidential construction and residential renovation projects in Canada.
Suboptimal production volumes hurt industry profitability in the early part of the period. In response to shrinking profit margins, many companies exited the industry or consolidated operations by closing facilities and reducing staff. Moreover, larger operators acquired smaller players to bolster their customer base and benefit from economies of scale.
Consequently, the number of companies operating in the industry is projected to fall at an average annual rate of 3.4% to 1,388 operators over the five years to 2014. As companies cut costs and unprofitable participants exited the industry, the average industry profit margin, measured as earnings before interest and taxes, recovered from an operating loss over the five years to 2014.
Over the next five years, the sawmills and wood production industry will benefit from strengthening demand for lumber, both domestically and internationally. The US housing market, which accounts for 62.1% of industry exports, is projected to grow rapidly over the period. In addition, increasing construction activity in emerging markets, particularly in Asia, will further contribute to export revenue. Moreover, rising construction and renovation expenditure in Canada will bolster domestic demand for lumber. Therefore, industry revenue is forecast to grow over the five years to 2019.
The sawmills and wood production industry has a relatively low level of concentration. The four largest companies in the industry are Canfor, West Fraser, Western Forest Products, and Resolute Forest Products. Industry concentration has risen substantially over the past five years, as smaller operators exited the industry or were acquired by other players.
As housing demand in the United States began to improve markedly in 2012, concentration rose rapidly as the industry's larger companies were better able to increase output to match demand. Market share concentration will increase over the next five years as the industry continues to consolidate.
For more information, visit IBISWorld's Sawmills and Wood Production in Canada industry report page.
Article archive
Upturn in EU furniture production
The latest Eurostat data indicates that total EU furniture production in the first quarter of 2014 was running at around 95% of the level recorded in 2010. This is a slight improvement compared to the previous 3 quarters when production was at around 93% of the 2010 level. The upturn is the first quarter-on-quarter rise in overall European furniture production recorded for over two years, ITTO reported.
The recent rise in EU furniture production was driven primarily by trends in Italy, Germany and Poland, the three largest furniture producing countries in Europe.
In Italy, the sharp decline in furniture production which began during the country's political and financial crises in 2011, hit bottom in the last quarter of 2013 and rebounded slightly in the opening months of 2014. Italian furniture exports have been rising gradually, backed by a concerted effort to improve international competitiveness and marketing. Italy's domestic furniture market has been very weak but there are now some signs of improvement. The contraction in Italian construction that has characterised the past six years seems to have slowed.
Activity in this sector has been boosted by tax concessions of 65% for energy-saving and 50% for refurbishment measures. Furniture production in Germany was also declining in 2013, but rebounded slightly in the first quarter of 2014. Data provided to CSIL by HDH (Confederation of German Woodworking and Furniture Industry) indicates that in 2013 German furniture industry turnover declined 3.7% and the number of furniture companies in Germany fell by 0.5%. However Germany remains a leading furniture producer with over €16 billion turnover. Germany has struggled in the face of rising competition from Poland and China and as a result exports have remained flat or declined over recent months. However robust construction activity in Germany has boosted domestic demand for furniture, notably in the kitchen sector.
Valutec delivers progressive kiln to Finnish sawmill
Valutec has sold a progressive kiln, with a maximum capacity of 40,000 m3, to Pölkky’s sawmill in Kuusamo in northern Finland. The kiln will be used to dry planks for re-processing for use in what will be Europe’s largest wooden residential quarter that is due to be built just outside Helsinki.
The progressive kiln will be used to dry pine with dimensions ranging from 44 to 63 millimetres. It is expected to be in production by November. The dried timber to be supplied by Pölkky in Kuusamo will be used for what is set to be Europe’s largest wooden quarter.
The residential quarter is to be built in Vantaa just outside Helsinki and will comprise a seven-storey building of glue-laminated timber, with a total of 186 apartments and a residential floor area of a little over 10,000 m².
It is estimated that a total of 3,000 m³ of timber will be used on the project. There has been great emphasis on both fire safety and soundproofing in the building, which will be constructed using passive house technology. Energy demands will be met by solar cells installed on the roof.
World furniture production doubled in the last decade
World production of furniture was worth about US$ 437 billion in 2013 (in current dollars at producer prices), doubling the value in the last decade. This estimate is drawn from the CSIL World Furniture Outlook 2014 report covering the 70 most important furniture producing countries.
CSIL is an international furniture research organisation based in Milan, Italy, which also publishes the online World Furniture journal (www.worldfurnitureonline.com). CSIL observe that while world growth in furniture production slowed during the financial crisis, it continued year on year. All the main demand drivers registered a positive trend at global level including growth in urban population, income availability and investment in construction.
Growth in world furniture trade was interrupted in 2009 when it declined 19% to US$ 94 billion. However trade rebounded to US$ 106 billion in 2010 and reached the prerecession level of US$ 117 billion in 2011. Since then world trade has continued to grow and is estimated by CSIL to have reached US$ 124 billion in 2013. CSIL forecast further growth in 2014 to US$ 128 billion.
Over the last 10 years, furniture has consistently accounted for about 1% of total trade of manufactured products. The financial crises combined with rising China‟s domestic market have led to a decline in global furniture import penetration (measured as the ratio between imports and consumption) in recent years.
Import penetration increased from 27.8% to a peak of 30.6% between 2003 and 2007 but then decreased between 2007 and 2009 and has remained below the pre-recession maximum ever since.
According to CSIL, in 2013 the leading importers of furniture were the United States, Germany, France, the United Kingdom and Canada. The major exporters were China, Germany, Italy, Poland and the United States.
All major furniture importing countries recorded decreases in furniture import flows during the financial crises. By 2013, the USA and Canada had reached or exceeded the prerecession level, while recovery has been slow in Europe.
CSIL forecast that global furniture consumption will rise by around 3.3% in 2014, with most growth concentrated in emerging markets. CSIL expect extremely limited growth in Western Europe of only around 0.5% this year.
Growth in furniture consumption will be higher, but still constrained, in Eastern Europe/Russia (2.4%), North America (2%) and South America (2.75%). The highest rates of growth are expected to be in the Middle East and Africa (3.9%) and the Asia-Pacific region (5.2%).
CSIL note that while growth rates have been much higher in emerging markets, in 2014 consumers in high income countries still spent on average five times more than consumers in middle and low income countries for furniture purchases.
Nevertheless current trends indicate that the geography of furniture consumption is gradually changing and that interaction between high income and emerging countries is increasing.
CSIL comment that in addition to the changing global map of furniture production and consumption, other factors influencing the sector include: energy saving and environmental protection; better use of raw materials; information and automation technology; and the increasing importance of standardization.
Finnish softwood lumber exports up 17%
In the first quarter of 2014, Finnish softwood lumber exports increased in volume by 17% as compared to the same quarter of 2013. Finnish sawmills exported about 1,9 million cubic meters of planed and sawn lumber against 1,63 million cbm exported in Q1/2013.
The European Union countries have in particular driven up Finnish exports. Despite the downward trend registered in recent years, in the first quarter a 26% increase was registered and a share of almost 45% of all Finnish softwood lumber exports. The driving force behind this development is undoubtly France, which surpassed UK as the main European buyer of Finland's lumber and has increased its imports by 26%. Germany and the Netherlands, two other major European consumer countries, have also increased their purchases by 14% and 25% respectively.
Finnish deliveries to African countries are also on an upward trend. Egypt, Finland's worldwide second biggest client has bought 26% more softwood lumber. The other major African customer country is Algeria, also with a major surge in imports by 54%.
The Asian market has in contrast to Europe and Africa shrank in the first quarter. Exports were lower by almost 5%. The main reason is the declining Japanese market, with less imports by -6% on a yearly basis. Also exports to Saudi Arabia dropped by 25% as compared to the first quarter of 2013.
| Finland's exports of softwood lumber (in cbm); Top 10 Destinations |
January-March 2013 | January-March 2014 | Change in % |
| Japan | 250,537 | 236,494 | -6% |
| Egypt | 204,628 | 258,499 | 26% |
| France | 139,298 | 174,913 | 26% |
| United Kingdom | 165,432 | 170,537 | 3% |
| Germany | 116,450 | 132,758 | 14% |
| Algeria | 87,384 | 134,387 | 54% |
| China | 98,227 | 98,370 | 0% |
| Israel | 83,298 | 89,532 | 7% |
| Saudi Arabia | 103,806 | 78,201 | -25% |
| Netherlands | 53,347 | 66,929 | 25% |
| Others | 433,606 | 469,459 | 8% |
| Total exports | 1,632,207 | 1,910,079 | 17% |
The statistics are based on the numbers published by Eurostat. HS Code: 440710.
New CEO for Stora Enso
Stora Enso’s Board of Directors has appointed Karl-Henrik Sundström, 54, as the new CEO of the company as of 1 August 2014. He is currently Executive Vice President and Head of the Printing and Living Division of Stora Enso. Back in April 2014, Jouko Karvinen, Stora Enso's last CEO, has expressed the desire to leave his position after heading the Company for seven years.
“Karl-Henrik Sundström has wide global experience in manufacturing industry and a solid background in financial management. As an internal choice, he brings continuity to the management of the Company and to the strategic path the Company has chosen,” says Chairman of the Board of Directors Gunnar Brock.
“During my two years with Stora Enso I have got to know a company with a strong market position and great potential. I am looking forward to continuing to build the future of Stora Enso together with the whole team of competent and committed employees around the world,” says the new CEO Karl-Henrik Sundström.
Masisa Tricoya Super MDF to be launched throughout Latin America
Masisa, a panel producer in Latin America, has agreed to carry out evaluation of Tricoya including market testing, production testing and development of finished end-products with the launch of Masisa Tricoya® Super MDF. Masisa Tricoya® Super MDF is an extremely durable, stable and sustainable wood-fibre based panel product with one of its key performance attributes guarantee against rot and decay with dimensional stability for 50 years when used externally.
TTL will now be extending the two year licence option agreement signed in April 2012 which, if successful, grants Masisa exclusive production and distribution rights for Tricoya® for the Latin American market - excluding Brazil, for which the sales and marketing rights are non-exclusive.
During the evaluation phase, the Tricoya product will be supplied by Medite Europe Ltd, TTL's joint development partner and licence holder for which a supply agreement has also been agreed.
Manufactured using Accsys Technologies' proprietary acetylation process, Medite Tricoya has enjoyed very positive feedback from customers resulting in a strong increase in demand. Medite Tricoya panels have already been used in a wide range of applications in the building and construction industry including façade claddings, exterior trim applications, exterior doors, interior wet areas and outside furniture.
Welcoming the news, Mr Clegg, Chairman of TTL and CEO of Accsys Technologies (AXS) comments: "Tricoya® Technology represents a major innovation in the wood panel industry which is pioneering a new generation of high performance and exterior use panel products. The agreement with Masisa, one of the world's leading MDF and particle board manufacturers, was initiated back in 2011/2012 and is set to significantly expand the global panel-products market estimated to be worth annually more than EUR 60 billion."
He added: "Our technology enables wood fibre panel products to be used in challenging exterior applications, creating completely new market opportunities for manufacturers operating in the 290 million m3 global wood based panel sector. It is already clear that Tricoya® based panels can compete with many higher cost, non-renewable construction materials currently used for exterior and wet environment applications."
Masisa SA has industrial facilities in Chile, Argentina, Brazil, Venezuela and Mexico as well as commercial operations in over 40 countries. Their main panel products are MDP (medium density particleboard), MDF (medium density fibreboard) and Melamine boards.
Tricoya® is the technology of wood chip acetylation licensed by Tricoya Technologies, a 50:50 joint venture between Ineos and Accsys Technologies PLC.
Interfor temporarily closes sawmill in US
Due to tough market conditions and a challenging fiber supply, Interfor announced Tuesday that it will curtail operations at its Beaver sawmill (Washington, U.S.) and at its planer in Forks, says Peninsula Daily News.
Operations at Beaver will stop as of Friday, 27th of June, while Interfor’s planer in Forks, which works hand-in-hand with the sawmill, will run for an additional seven to 10 business days to process remaining inventories before shutting down as well.
The shutdown is temporary, the company said, without providing a date for resuming operations. The shutdown will remain in effect indefinitely until market conditions change, company officials said, quoted by Peninsula Daily News.
“Our Olympic Peninsula operations have been caught between difficult market conditions and a challenging fiber supply that is further aggravated by the impacts from log exports,” said Steve Kroll, Interfor’s general manager for Washington operations. “The mill at Beaver has been particularly hard hit and has been running on a 40-hour-per-week schedule, which is difficult to maintain,” Kroll said.
Karen Brandt, director of public affairs for Interfor Corp. in Vancouver, B.C., said the company will continue to monitor market conditions and restart its West End operations “when it’s feasible.” Interfor’s West End operations were curtailed for about a month last year for the same market-driven reasons, Brandt said.
China plans massive investments in foreign countrie
Early this year Forest Trends published a report “Chinese Overseas Investment in Forestry and Industries with High Impact on Forests: Official Guidelines and Credit Policies for Chinese En terprises Operating and Investing Abroad”.
According to ITTO, Chinese enterprises invested US$90 billion in 5,090 foreign companies in 156 countries, a year on year increase of 17%. Of the total, investments in Hong kong, ASEAN, EU, Australia, USA, Russia and Japan totalled USD 65.5 billion around 73% all overseas investments.
But investment flows to Hongkong, the EU and Japan fell in 2013 compared to a year earlier. The value of China's investments grew in Russia (US$4.1 bil.), the US (US$4.2 bil.), Australia (US$3.9 bil.) and ASEAN (US $5.7 bil.). The greatest increase was seen in investments in Russian companies.
In terms of investment categories, 90% of China's outward FDI in 2013 was to service industries (33%) followed by mining (22%), wholesale and retail (15%), manufacturing (10%), construction (7%) and transportation (3%).
The pace of growth in investment in the construction sector was particularly high in 2013. The data from the Ministry of Finance indicates that some 527,000 Chinese workers were sent to foreign companies in 2013, a year on year increase of 15,000 employees. In total by the end of 2013, China had around 7 million people overseas employed in support of its outward investment.
The majority of China's outward FDI originates from state - owned enterprises (national, provincial, and municipal) although the government is encouraging outward FDI by private enterprises. Geographically, enterprises in the industrial and commercial centres in the coastal cities and provinces are responsible for most outward FDI.
Provinces where forestry and wood processing is strong such as Shandong and Yunnan tend to feature in FDI in the timber sector. A powerful incentive for outward FDI is provided by the government in the form of financial backing.
Chinese enterprises on an approved list benefit from the government's financial support in the form of access to below - market rate loans, direct capital contribution and subsidies associated with official aid programmes.
The incentives are backed up by various guidelines to banks and financial institutions to encourage them to ensure their clients comply with environmental and social standards, including host-country laws and regulations. The most recent green credit guidelines (2012) are the most comprehensive yet, but as with the other guidelines, their implementation has so far been patchy.
However, the government has plans to enforce them more strictly. All guidelines and policies share the basic and fundamental requirement that host - country laws and regulations must be followed. Despite the poor implementation of past guidelines the most recent environmental protection and green credit guidelines offer clear opportunities for host-country governments, NGOs, and campaigners to highlight occasions where Chinese companies are operating in breach of their own government's regulations and laws.
Direction of outward investments
According to records kept by China's Ministry of Commerce, investments in forestry and other land-use sectors have been made in the following regions and countries:
- Africa : Fourteen countries in Africa have received FDI in agriculture and fo restry, in particular Gabon , Zambia, Equatorial Guinea, Liberia, Republic of Congo and Cameroon.
- Asia : Outward FDI in logging and processing has been mainly directed to Laos, Myanmar, Thailand, and Korea . Efforts have been made to establish plantations in areas previously under opium poppy cultivation in Laos, Thailand, and Myanmar.
- Latin America and Caribbean : While less significant than Africa or Asia, Chinese investments have been expanding in Brazil, Argentina, Venezuela, Peru and Guyana.
- Russia: Chinese investment has focused on logging, timber processing, pulp and paper and other products and is concentrated in the border areas in Siberia and the Russian Far East. Chinese outward FDI has been encouraged by the Russian and Chinese governments through supportive programmes that began in 1997.
Kronospan plans huge investments in Belarus
The Austrian company Kronospan will channel at least $350 million into the establishment of new manufacturing facilities in Belarus by 2016, according to the Belarusian media.
From 2011-214, Kronospan already invested US$ 600 million into the establishment of new manufacturing facilities in Belarus. Of the total as much as $400 million was spent on the project in Smorgon and $200 million on the project in Mogilev.
The company plans to invest an additional $350-400 million by the end of 2015, meaning that Kronospan's investment program will expand by 3.5 times in comparison with the initial plans. Since 2012 Kronospan has been one of the top three leading investors in Belarus.
Schweighofer gets refusal for new sawmill in the Czech Republic
As the Austrian newspaper Wirtschaftsblatt reports, Schweighofer's plans to build a sawmill in Southern Bohemia (Vodňan) have been rejected by the local community. The municipal council of Vodňan has decided in majority against the project, according to the report.
The local residents have expressed their concerns on the higher traffic that will occur if the sawmill was to be build, even if the 500 jobs would have halved the unemployment in the town. It is the sixth time when the Austrian company tries to acquire a site in the Czech Republic, but every time Schweighofer received refusals from the local communities.
If it was approved, Schweighofer's new sawmill would have had an annual output of one million cubic metres, or almost one fifth of all Czech exports, and investments would have reached EUR 146 million.
May 2014 logs and sawnwood prices in China
This report contains latest prices of logs and sawnwood from main timber markets across China. (Source: ITTO)
1 Yuan=0.12 EUR
1 Yuan=0.16 US$
Guangzhou Yuzhu International Timber Market
| Logs | 10-May | 27-May | |
| yuan/cu.m | yuan/cu.m | ||
| Merbau | Dia. 100 cm+ | 5200-5400 | 5200-5400 |
| Bangkirai | Dia. 100 cm+ | 5300-5500 | 5300-5500 |
| Kapur | Dia. 80 cm+ | 2800-3000 | 2800-3000 |
| Ulin | All grades | 6500 | 6500 |
| Lauan | Dia. 60 cm+ | 2000-2200 | 2000-2200 |
| Kempas | Dia. 60 cm+ | 2000-2100 | 2000-2100 |
| Teak | Dia. 30-60 cm+ | 8000-12000 | 8000-12000 |
| Logs | 10-May | 27-May | |
| yuan/cu.m | yuan/cu.m | ||
| Greenheart | Dia. 40 cm+ | 2300-2450 | 2300-2450 |
| Purpleheart | Dia. 60 cm+ | 3100-3300 | 3100-3300 |
| Pau Rosa | Dia. 60 cm+ | 4700-4800 | 4700-4800 |
| Ipe | Dia. 40 cm+ | 4000-4800 | 4000-4800 |
| Yuan per tonne | |||
| Cocobolo | All grades | 53-58000 | 53-58000 |
| Logs | 10-May | 27-May | |
| yuan/cu.m | yuan/cu.m | ||
| Wenge | All grades | 4300-5200 | 4300-5200 |
| Okoume | All grades | 2200-2500 | 2200-2500 |
| Okan | All grades | 3700-3800 | 3700-3800 |
| African blackwood | All grades | 8000-15000 | 8000-15000 |
| African rosewood | All grades | 5000-6500 | 5000-6500 |
| Bubinga | Dia. 80 cm+ | 13-15000 | 13-15000 |
| Logs | 10-May | 27-May | |
| yuan/cu.m | yuan/cu.m | ||
| Ash | Dia. 35 cm+ | 4200-4300 | 4200-4300 |
| Basswood | Dia. 36 cm+ | 3500-3800 | 3500-3800 |
| Elm | Dia. 36 | 2800-3600 | 2800-3600 |
| Catalpa | Dia. 36 | 2800-4200 | 2800-4200 |
| Oak | Dia. 36 cm+ | 4000-5500 | 4000-5500 |
| Scots pine | Dia. 36 cm+ | 2000-2200 | 2000-2200 |
| Larch | Dia. 36 cm+ | 1550-1900 | 1550-1900 |
| Maple | Dia. 36 cm+ | 2700-3050 | 2700-3050 |
| Poplar | Dia. 36 cm+ | 1650-1950 | 1650-1950 |
| Red Oak | Dia. 30 cm+ | 2500-2600 | 2500-2600 |
Sawnwood
| Sawnwood | 10-May | 27-May | |
| yuan/cu.m | yuan/cu.m | ||
| Makore | Grade A | 7300 | 7300 |
| Zebrano | Grade A | 12000-15000 | 12000-15000 |
| Walnut | Grade A | 9500-10000 | 9500-10000 |
| Sapelli | Grade A | 7500-7900 | 7500-7900 |
| Okoume | Grade A | 4200-4500 | 4200-4500 |
| Padauk | Grade A | 14500-17000 | 14500-17000 |
| Mahogany | Grade A | 6500-7000 | 6500-7000 |
| yuan/tonne | |||
| Ebony | Special grade | 16000 | 16000 |
| Sawnwood | 10-May | 27-May | |
| yuan/cu.m | yuan/cu.m | ||
| Ulin | All grade | 9000-10000 | 9000-10000 |
| Merbau | Special grade | 8600-9500 | 8600-9500 |
| Lauan | Special grade | 4600-4800 | 4600-4800 |
| Kapur | Special grade | 5500-6000 | 5500-6000 |
| Teak | Grade A | 9600 | 9600 |
| Teak | Special grade | 14-20000 | 14-20000 |
| Sawnwood | 10-May | 27-May | |
| yuan/cu.m | yuan/cu.m | ||
| Maple | Grade A | 10000-10500 | 10000-10500 |
| Beech | Special grade | 5300 | 5300 |
| Ash | no knot | 5000-5800 | 5000-5800 |
| Basswood | no knot | 2700-3500 | 2700-3500 |
| Oak | no knot | 4000-5500 | 4000-5500 |
| Scots pine | no knot | 2800 | 2800 |
Shanghai Furen Forest Products Market Wholesale Prices
Logs
| Logs- All grades | 10-May | 27-May |
| 000's yuan/tonne | 000's yuan/tonne | |
| Bois de rose | 250-300 | 250-300 |
| Red sandalwood | 1600-2000 | 1600-2000 |
| Siam rosewood | 100-550 | 100-550 |
| Burma padauk | 27-45 | 27-45 |
| Rengas | 8-15 | 8-15 |
| Mai dou lai | 6-8000 | 6-8000 |
| Neang noun | 32-65 | 32-65 |
| Burma tulipwood | 28-60 | 28-60 |
| Cocobolo | 43-180 | 43-180 |
| Morado | 10-15 | 10-15 |
| Ebony | 15-40 | 15-40 |
| Trebol | 7-8 | 7-8 |
| African sandalwood | 18-32 | 18-32 |
Sawnwood
| Sawnwood | 10-May | 27-May | |
| yuan/cu.m | yuan/cu.m | ||
| Okoume | Grade A | 4500-4700 | 4500-4700 |
| Sapelli | Grade A | 7600-7900 | 7600-7900 |
| Zebrano | Grade A | 8000-9000 | 8000-9000 |
| Bubinga | Grade A | 13500-15800 | 13500-15800 |
| Mahogany | Grade A | 6000-7000 | 6000-7000 |
| Wawa | FAS | 3700-3900 | 3700-3900 |
| Ayous | FAS | 4000-4200 | 4000-4200 |
| Sawnwood | 10-May | 27-May | |
| yuan/cu.m | yuan/cu.m | ||
| Lauan | Grade A | 3700-3900 | 3700-3900 |
| Merbau | All grades | 8000-10000 | 8000-10000 |
| Teak | All grades | 11500-36000 | 11500-36000 |
| Sawnwood | 10-May | 27-May | |
| yuan/cu.m | yuan/cu.m | ||
| Beech | Grade A | 4200-4800 | 4200-4800 |
| Ash | Grade A | 5500-5800 | 5500-5800 |
| Elm | Grade A | 4900-5300 | 4900-5300 |
| Red oak | 2 inch FAS | 8000-8600 | 8000-8600 |
| White oak | 2 inch FAS | 7500-8500 | 7500-8500 |
| Maple | 2 inch FAS | 9800-10500 | 9800-10500 |
| Cherry | 2 inch | 9500-10500 | 9500-10500 |
| Black walnut | 2 inch | 15000-17000 | 15000-17000 |
Metsä Wood closes Finnish sawmill
Metsä Wood, wood products business area of Metsä Group, has begun statutory negotiations to shut down the Karihaara sawmill in Finland. The negotiation proposal was issued on 18 June 2014 and the negotiations apply to the entire staff of the sawmill.
Production operations at the sawmill have been interrupted since May 2009 and the entire staff have been subject to a temporary layoff since June 2009. The negotiations are expected to be concluded during July, and any decisions regarding closing down the sawmill will be made during Q3 of 2014.
The Karihaara pine sawmill is located in Kemi, Finland. The annual volume of sawn timber produced at the mill was over 100,000 cubic metres.
Sierra Pacific plans new sawmill
Sierra Pacific, U.S. second-largest lumber producer is assembling a site at Frederickson in southern Pierce County (75 km south of Seattle, U.S.) to build a major new sawmill that could employ as many as 200 workers, says the News Tribune daily.
Spokepersons of the company said that at the moment feasibility analysis is undergoing, to test the economical impact and the potential benefits and detriments of the site. Sierra Pacific already bought in the nearby region properties worth US$ 3,2 million.
The potential sawmill site sits adjacent to a Tacoma Rail line. The municipally owned short-line railroad could handle finished products produced by the mill for regional and national distribution, says the News Tribune. If Sierra Pacific decides to build the mill, the company would be its own builder. The privately held company, said a company spokesman, even builds its own sawmill machinery to equip its plants. In addition to producing lumber for home buildings, the mill also would produce electricity for sale to power companies and for use in the plant. Mill wastes would be used to power the boilers that produce the power.
The company already operates three mills in Washington: at Burlington, Aberdeen and Centralia. Sierra Pacific has no firm timeline to make its decision, said the company spokesman. But the timber firm has strong hopes for the project, he said. “We think this site holds great promise,” he said.
Price of Swiss wood pellets stable in June
After four consecutive months of decline, in June the average price of pellets in Switzerland has stabilized as compared to May. The price has registered only a minor decline on a monthly basis, from CHF 395.3 (EUR 323.9) in May to CHF 395.2 (EUR 324.6) in June. On a yearly basis, the price is almost equal to the one from June 2013.
In June 2014, for orders of 3 tonnes, the current price is CHF 409.2 (EUR 336.29); for 5 tonnes purchases CHF 393.48 (EUR 323.21), while for larger quantities (8t) one can pay CHF 383.1 (EUR 314.69).
Södra enters Polish market
Södra Timber is initiating a collaboration with the Polish Wood Brokers company for sales in Poland. 'Wood Brokers have a large network throughout Poland and we hace already begun work of establishing new customer contacts for us,' says Håkan Svensson, President of Södra Timber.
'Poland is a new and interesting market in the immediate area, with both the timber industry and the building trade, whose needs we can meet with our selection. We believe that our Södra Swedish timber fits in well here,' says Håkan Svensson.
Exports of sawn timber from Sweden to Poland amounted 150 000 cubic meters in 2013, an increase of 20 percent as compared with 2012. 'Exports to Poland are predicted to continue to increase in the future and we want to participate in this development. This is a step in that direction,' Mr. Svensson concluded.
EIA: Japan imports illegal Russian timber
Significant quantities of illegal timber products from the forests of Siberia and the Russian Far East are flowing into Japan, according to a new report by the US-based nonprofit Environmental Investigation Agency (EIA). While the United States and European Union have recently enacted new policies that prohibit the import of illegally sourced wood and wood products and require companies to conduct heightened due diligence in their sourcing practices, Japan's failure to enact similar measures makes it an open market for illegal timber products from around the world, says EIA.
The report, The Open Door: Japan's Continuing Failure to Prevent Imports of Illegal Russian Timber, details supply chains for illegally cut Siberian pine, bought by Chinese traders and imported to China, manufactured into wood products and sold on markets all over Japan. In undercover interviews, officials from San Xia, one of the largest Chinese importers of Russian timber, detailed how they purchase this timber from illegal loggers deep inside Siberia and launder this timber across the border using documentation from their forest concession. In factories across northeastern China, San Xia transforms this timber into edge-glued lumber, 90% of which is sold to Japan for housing construction.
"The no questions asked market for wood products in Japan is fueling rampant illegal logging in eastern Russia," said Kate Horner, Director of Forest Campaigns at EIA. "The time has come for Japan to join other developed nations in support legal forest products trade. Without swift action by the government to prohibit illegal timber from entering its market, Japanese consumers will continue to be unwitting financiers of the timber mafias that are raiding the world's forests."
Illegal logging is estimated to comprise at least 50% of total timber harvests in eastern Russia, with some estimates nearing 90%, and poses one of the gravest threats to both the region's forest ecology and the future of the Russian forest products industry, says the report. This trade fuels corruption and environmental destruction, including some of the most biodiverse and pristine forests in the Russian Federation, according to EIA.
These products directly compete with Japanese domestic timber, depressing prices globally and putting Japanese forest producers at a competitive disadvantage. This report follows EIA's 2013 Liquidating the Forests: Hardwood Flooring, Organized Crime, and the World's Last Siberian Tigers. In the 2013 report, EIA investigators documented how Lumber Liquidators, the largest specialty flooring retailer in the United States, had purchased millions of square feet of hardwood flooring from a Chinese supplier who sources illegal oak originating in the Russian Far East, the northernmost range of the last 450 Siberian tigers in the world. In September 2013, the United Stated Department of Justice initiated a federal investigation of Lumber Liquidators reportedly for alleged violations of the Lacey Act.
"Organized criminal groups send out logging brigades to steal valuable hardwoods from protected areas, decimating Russian forests and depriving the Russian economy of millions of dollars in lost tax revenue," said Horner. "Importing cheap illegal wood from eastern Russia is a tragic crime of convenience that directly undercuts Japanese business trying to play by the rules. Any company buying products containing wood from eastern Russia, whether directly or via China, should know that it may be using stolen wood and must take great care to ensure legality."
EIA urges Japan to take decisive and immediate action to close its market to the cheap, illegal timber that is undercutting both its domestic forestry operations as well as the forests and livelihoods of its trading partners.
The full EIA report here
Boom in Swedish lumber exports
In March 2014, Sweden has exported 1.025 million cbm of softwood lumber, as much as in February. Compared to March 2013 this represents a 2.7% increase. In the first three months of 2014, Swedish sawmills have exported about 3 million cubic meters of planed and sawn lumber, 8.9% more than in the same period last year.
Europe in particular has driven up Swedish exports. Nearly two-thirds of the total amount has been delivered to European countries. Overall, total exports to Europe have increased by 11%, while shipments to the EU countries rose by 12%. The driving force behind this development is unmistakably the UK. The country is already the main buyer of Swedish softwood lumber and has increased its imports by 19% in the first quarter. Denmark and the Netherlands, two other major European consumer countries, have also increased their imports significantly. Germany is currently the third largest purchaser of Swedish lumber, with a 3.3% yoy rise.
In Africa, Egypt has purchased 55% more Swedish softwood lumber. The other two major African customer countries are Algeria and Morocco, though with a decline in imports of Swedish lumber by 11%, and 14% respectively.
The Asian market has in contrast to Europe and Africa shrank in the first quarter. Exports were lower by 3.4%. The main reason is the declining Japanese market, with less imports by 11.6% on a yearly basis. Also exports to Saudi Arabia dropped by over 20% as compared to the first quarter of 2013. These two negative developments could not absorb very well the rapid growth in China.
Not only the amount but also the average value of the Swedish softwood lumber exports has increased. In March, the average export value was 1980 SEK (~ 218 EUR) per cbm. This represents a surge by 12.3% over March 2013. Throughout the first quarter, the average price was 1,951 SEK (~ 215 EUR) per cbm, and thus 8.9% more than in the same quarter of 2013.
| Country | I-III 2013 (1.000 cbm) |
I-III 2014 (1.000 cbm) |
Change |
| UK | 553.0 | 659.3 | 19,22% |
| Egypt | 199.2 | 308.8 | 55,02% |
| Germany | 239.1 | 247.0 | 3,30% |
| Norway | 208.2 | 218.6 | 5,00% |
| Denmark | 175.4 | 208.4 | 18,81% |
| Netherlands | 186.5 | 205.5 | 10,19% |
| Japan | 225.0 | 199.0 | -11,56% |
| Algeria | 150.9 | 133.8 | -11,33% |
| China | 80.6 | 118.2 | 46,65% |
| Belgium | 71.1 | 92.3 | 29,82% |
| France | 104.5 | 90.0 | -13,88% |
| Morocco | 103.7 | 89.3 | -13,89% |
| Saudi Arabia | 91.6 | 72.8 | -20,52% |
| USA | 43.8 | 50.0 | 14,16% |
Metsä Group sells subsidiary in Estonia
Metsä Group agreed on the divestiture of the entire share capital of its subsidiary Metsä Wood Eesti AS to the Estonian Combimill OÜ. Simultaneously with the transaction, the parties have agreed on commercial cooperation in raw material procurement as well as by-product and sawn timber sales. The transaction will not have a significant impact on Metsä Wood’s financial results, as the company said in a press release.
"This arrangement is in line with Metsä Wood’s strategy of industrial efficiency and investment in resources in the continuous development of the competitiveness and productivity of Metsä Wood’s core business", said Esa Kaikkonen, Executive Vice President of Metsä Wood, commenting on the transaction.
Metsä Wood Eesti AS is the Estonian subsidiary of Metsä Wood and its sawmilling activities are located at the production unit in Reopalu, Järva County, central Estonia. The annual capacity of the Reopalu sawmill is 75 000 m3 of spruce timber. Turnover of Metsä Wood Eesti AS amounted to approximately EUR 16 million last year and the company employs 38 people.
Combimill OÜ is an Estonian producer of pine sawn timber with a production facility located in Kõidama, Estonia. The finalisation of the transaction is subject to approval by the Estonian Competition Authority. The transaction is expected to be completed latest by the end of Q3/2014.
New Zealand becomes the world’s largest supplier of softwood logs
New Zealand is now the world’s largest supplier of softwood logs with exports increasing fourfold to almost two billion dollars in five years.More than 20 percent of the world’s softwood log trade originates from New Zealand. In 2013, the country exported 57 percent of the country’s timber harvest and the value of the trade had tripled in five years, according to the Wood Resource Quarterly. A majority of the log volumes were destined for China, but South Korea, India and Japan were also sourcing logs from New Zealand last year.
New Zealand has become the world’s largest exporter of softwood logs, with shipments in 2013 accounting for over 20 percent of global trade, according to estimates by WRI. Russia and the US ranked second and third as global log suppliers, each shipping about 15 percent of the softwood logs traded in the world last year.
Not only has the volume of logs exported from New Zealand increased dramatically the past five years, with almost a doubling of exports to over 16 million m3, but the value of the logs has gone up even faster. The average value of exported logs reached a new record high in March this year, which was double the value just four years ago.
Despite the dramatic increase in sawlogs leaving the country and the closures of a number of manufacturing facilities in New Zealand, domestic log consumption has not changed much the past ten years. In 2013, the forest industry consumed just slightly less logs than the ten-year annual average consumption.
China is, of course, the reason for the surge in log exports and the record high timber harvest levels in New Zealand. In 2013, shipments to China accounted for 72% of the total export volume, followed by South Korea, India and Japan. The magnitude of the log export volume cannot be underscored enough. In the 4Q/13, as much as 57 percent of the timber harvest in New Zealand was exported in log form. Such a high share of exports of unprocessed wood is unmatched in the rest of the world.
While timberland owners have mightily benefited from the strong log export market, domestic sawmills have not seen the same surge in export volumes. In 2008, the total value of exported lumber equaled that of exported logs at approximately 500 million US dollars. Since that time, the export value for lumber has gone up a respectable 30%.
However, this pales in comparison with the value of logs that have gone up fourfold to reach close to two billion US dollars in 2013.
