There are about 1,400 wood industry companies active in Austria and of these about 1,000 are sawmills. Remarkably, most of these are small to medium-sized businesses and almost all are privately owned. But as the tightening of the economy in the Eurozone begins to grip again it is the single sawmill companies that are deemed most vulnerable.
The Austrian wood industry is worth about €7.38bn and, although one of the smaller European countries with a population of 8.4 million, it is the seventh largest producer of sawn timber in the world. Its products are diverse and highly export-oriented with two-thirds of output sold abroad. Sawn timber, glulam, wood-based panels and even skis head the list. Construction remains important, especially windows, which account for €450m and glulam components, which were worth €600m last year.
In the latter part of the year, though, exports have begun to slow, especially business with Austria’s main trading partner Germany, and also important customers such as Italy and Japan, which have all experienced a slowdown in construction.
Sawn timber exports dropped to 2% above last year although the UK more than doubled its imports in the first eight months of the year to 48,000m³. Glulam products were down about 8% during the same period. Sales of glulam to the UK, which sources much of its product from Austria, declined by a similar 8% to 14,400m³.
Hasslacher Norica Timber, a diverse timber products group based in Sachsenburg, has benefited from the policy embarked on by the family-owned company 10 years ago to widen its products and markets. It is among the top 10 Austrian timber companies and has expanded from a single sawmill to seven locations, including Russia, producing sawn wood, glulam, cross-laminated timber, wood chips and pellets. In recent years it has concentrated on developing timber building products.
"The effect of the recent downturn has been very mild for us because we are one of the very few companies that supply over 20 different countries and we have a very wide product range," said Hasslacher overseas sales director Ernst Woels. "CLT and laminates have been doing OK in the European market; it is rough lumber that has been difficult, but that is less than 20% of our company operations.
"We have opened five mills in the last 16 years and three in the last six, and that is from a single sawmill," he continued. "With the laminates we deliver 90% direct to construction and that has helped us maintain prices, supplying good mixed loads. The mix of countries is also important, some have done well for us, but northern Italy and Japan have been hit very hard. I think business will be stable for us next year although glulam will be more difficult."
In the UK, Hasslacher has mainly exported CLT and serviced special projects, but has made moves to expand from a minimal export market. "We started to develop CLS from our Russian mill but there was a downturn in prices and we had to stop, but sooner or later the market will stabilise and we will hope to restart," Mr Woels said.
Tilly Holzindustrie produces solid wood panels that are the smaller brothers of CLT, which come in three- and five-layer products in 19-55mm thicknesses for use in furniture, flooring, kitchens, interior fittings and wall panels. They are promoted as more stable, relatively lighter and having a natural decorative surface.
Sales director Veit Ebner said its main markets in central Europe were stable, but it did not expect any leap in improvement next year. However, the UK has been active, served through an exclusive distribution agreement with Meyer. "If you take Austria, Germany, France, northern Italy and Switzerland, this is an established product, but it is fairly new in the UK and the economy in the UK is doing better. We exhibited at Timber Expo in October and I think it was the best we have had in the four years we have exhibited. We had a lot of enquiries and we are looking at going to some design exhibitions in the UK to try to spread the word to architects who want to find out more about three- and five-layer panels."
The Austria-based Egger Group, which manufactures and sells all over the world, is cautiously optimistic overall for the current financial year and also expects both a period of stability and continuing development of the UK business. "A stabilisation of the overall economic situation or moderate growth can be expected in the key sales markets of western and eastern Europe," said group sales and marketing director Ulrich Bühler. "For this reason, Egger is counting on a stable and slightly increasing turnover in the producing plants of Germany, Austria, France, the UK, and Romania.
Strong UK market
"The development in the UK is strong. We benefit from the positive developments of British residential construction, helped by the support programmes of the government, as well as our own long-term, continuous investments in our plants in Hexham and Barony, which make us a high quality and efficient supplier. For Russia, however, we expect decreasing turnover because of the current market situation and the devaluation of the rouble."
He said Egger saw future development in combining materials, colours, styles and surfaces to provide integral, cross-product solutions available within the shortest possible delivery times. Customers were also looking for ways to add value, he said.
"With Feelwood, Egger brought doublesided synchronised pore surfaces for furniture to the market for the first time. The tactile characteristics of the synchronised pore texture correlate with the visual markings of the grain, giving the impression of genuine wood. We have invested in new capital equipment, including at our Hexham plant, especially for developing the new generation of surfaces," Mr Bühler said.
"The recently presented flooring Egger Laminate Flooring Collection 2015-2017 has a number of stand-out features, including the newly developed aqua+ technology which is available for the first time in an Egger collection," he continued. "These floors are moisture-resistant and can therefore be used in wet rooms and bathrooms."
For Tilly, the latest product is Fineline, a three-layer solid wood panel made in spruce in which both faces consist of LVL with vertical, black glue joints. The result is a finely lined and decorative surface. The panel, whose construction is protected by a design patent, can be used in furniture and construction as a non load-bearing panel. Teak Austria has concentrated on outdoor and garden products such as furniture and decking at the high quality end of the market and recently introduced acacia.
"We have imported teak from Costa Rica and Indonesia, but this year we have started using acacia as a second species as demand for acacia furniture is steadily growing," said owner Martin Jachs.
"We are involved in the decorative, high quality market, so we have not seen any decline as people seem to be prepared to spend on their gardens. In fact we have had a good year so we can only hope for another good year in 2015."