Building markets

Summary
• Irish mills are producing 47mm construction grade to target the UK.
• Glennon’s aims to be a one-stop solution for Irish and UK markets.
• Murray Timber’s new USNR line has increased yield and quality.
• ECC and Graingers are both investing in planing lines soon.

It’s been a tough couple of years for Irish sawmillers. Of course, all around the world sawmills have been reducing production or closing completely, but it could be argued that, following the boom of the Celtic tiger and the associated flourish in housebuilding, Ireland fell further and harder.

And that fall started around August 2007, when Irish building firms stopped buying almost overnight. The mills responded by cutting output and by Christmas 2008 they were reduced to three-day weeks.

However, companies say they are now getting back to full-time working, a demonstration of their inherent resilience and a slight pick up in Irish demand, but also strategic targeting of the UK market.

With more substantial improvement in their domestic business not expected until at least the end of 2010, Irish sawmillers are increasingly turning to customers in the UK, especially for sales of FSC-certified construction material. And, despite the unfavourable euro/sterling exchange rate, the strategy seems to be working.

ECC, based in Cornamona, Co Galway, started exporting to the UK 20 years ago, opening a Liverpool office in 1992. Last year it reinforced its commitment to the UK by establishing a second office in Birmingham.

ECC has always exported pallet and fencing material but recently increased the proportion of its sawn products going to the UK from 30% to 50% – the equivalent of around 60 lorry loads a week. It’s aiming for 60% UK sales for 2010.

The company has 300 UK customers and is now investing in a planing line to service the market.

In addition to pallet and fencing products, ECC produces C16 carcassing and is targeting 1,000m³ per week to the UK in early 2010.

Director Daryl Fahy said the company can turn around UK orders in 24 hours. “We hold extensive stocks for just-in-time delivery,” he said.

The company is also, about to enhance its service with Progressive Solutions’ lumberTrack software, which integrates stock management and production planning with order processing and accounts. “This will benefit customers in the UK and Ireland,” said Mr Fahy.

Along with other Irish sawmills, ECC is back to full time working after introducing short-time earlier this year. While not denying the difficulty of the past 18 months, managing director PJ Fahy accepts it is a part of business that is outside ECC’s control. “In any business there are cycles,” he said.

He has noticed some improvement in the Irish market in the past few weeks but this will not sway ECC from the UK. “Even when times are good in Ireland we keep exporting,” he said. “We’ve stayed [in the UK] in good and bad times over the last 20 years,” he said. “It’s very gratifying for us to see the loyalty shown to our company by our UK customers over the past two years – they know that we will consistently be there in the future.”

Unified market

“I believe the market is not a UK and Irish market, it’s a British Isles home-grown market,” said Mike Glennon, joint managing director of Glennon Brothers.

His company has exported to the UK mainland for many years, and in 2003 the traffic became two-way when it started importing Scottish logs to complement its supply from Coillte.

“Road haulage means that from Fermoy we have competitive transport right to the south of England,” said Mr Glennon.

At the Fermoy mill, Kieran Connolly is in charge of the production process which converts 2,000m³ of logs a day into finished product.

Supplying the UK means producing 47mm construction timber alongside the Irish market’s 44mm, but Mr Connolly said it is just another factor in the production planning.

“We are geared up for large volumes of carcassing and that’s what we will do,” he said.

With its range of value-added products also including fencing and decking – marketed under the Glenfence and Glendeck brands – T&G flooring, and specials, Glennon’s aim is to be a ‘one-stop solution’ for both the Irish and UK markets. Inherent to this is the company’s long-term commitment to the UK.

“We are focused on the long game,” said Mr Glennon. “We have a proven capacity for long-term business.”

The company also has proven resilience. In 2004 a fire devastated the main sawline at its Longford mill. Within a week, many staff had relocated to Fermoy and a few months later production was back to capacity. Mr Glennon said this, and the company’s response to changing markets, shows its ability to adapt.

“Our willingness to change stands out,” he said. “We have a small, tight team that puts its shoulder to the wheel.”

Murray Timber Group was also faced with rebuilding after a fire destroyed its mill in Ballygar, Co Galway, in 2005 and now sports a USNR line which is so hi-tech it requires only one person to run the entire line from logs to boards. It also has a state-of-the-art carcassing mill in Ballon, Co Carlow.

Murrays produces 1,000m³ of finished material a day on its present single shift, with capacity to double this.

With the UK market in mind, a e4m planing line was added last year in Ballygar to complement the existing similar high speed planing line that was installed in its Ballon plant in 2005.

Key to the mill’s efficiency is optimising use of the raw material – between log sorting and boards, each piece is scanned seven times. The new mill has had the dual benefit of increasing yield and improving product grade.

The company was the first in Ireland to offer eased edge construction timber as standard, which is ideal for the demands of the UK market.

It has exported pallet and fencing material to the UK for many years but it too is now adding construction grade to the mix. Now 45% of its construction timber, badged with Murray’s new brand ‘Sustainable Natural Resource’ (SNR) and sold through agent Taylor Maxwell, is going to the UK.

Murrays offers the full product range from 2.4-7.2m lengths on carcassing material as well as an extensive array of products including pallet, decking and fencing.

“It’s the only chance we have because the Irish market is dramatically reduced,” said managing director Paddy Murray, and he too stressed that the company is in the UK for the long haul: “I am very pleased how we have been accepted in the UK market,” he said. “From day one orders have been coming in.”

Prior to the current recession, Grainger Sawmills, based in Enniskeane, Co Cork, sold 95% of its construction timber in Ireland and practically all its pallet and packaging to the UK, which is approximately 5,000m³ per month. Now, in addition, it is sending around 2,500m³ of construction timber a month across the Irish Sea, all through its sales agent Taylor Maxwell and is producing 2.4-4.8m easy edge for the UK.

Purchasing director Mike Russell is pleased with the market’s response to its construction material and Grainger is now building up its stock profiles to allow it to offer just-in-time deliveries to the UK.

Although several factors work against the Irish mills – the exchange rate and higher transport costs compared with UK mainland mills – Mr Russell said Grainger’s is committed to the UK.

“You can’t invent the market and you have to stay there for the long term,” he said.

And he’s philosophical about the rising value of the euro against sterling, acknowledging it’s something that Irish producers have to live with.

“There’s no use worrying about what you can’t control; get right what you can do,” said Mr Russell.

This ethos has driven diversification of Grainger’s product range, which includes decking as well as structural, pallet and fencing material, and helped it become the first mill to install a biomass combined heat and power plant. Fuelled by some of the mill’s co-products, it produces 2MW of heat, used in the nine kilns, while some of the 2.5MW of electricity is used on site and the rest sold to the national grid.