• The euro’s strength has made German wood more expensive.
• Klausner exported 370,000m³ to the UK in 2007.
• Mayr-Melnhof is buying the Stallinger/Kaufmann Group.

Despite the dent to their competitiveness caused by the strong euro, German companies continue to be interested in the UK market.

Many of those interviewed by TTJ said they were keen to maintain and forge new long-term partnerships in the UK which would carry through the ups and downs of the trade cycle.

This echoes something shared by Saint-Gobain’s timber group procurement director Mark Bowers at a recent London Softwood Club meeting. “Rather than buying from a source today, but not tomorrow, it [the future] will be about committing to more long-term supply relationships that will see us through the difficult times,” he said.

2007 was an exceptional year for German and Austrian sawn and planed timber exports to the UK, with Germany’s exports doubling. The first quarter of 2008 saw 82,000m³ shipped, also an increase on last year.

But the US housing market downturn has affected the German and Austrian timber industries, especially large mills which have invested in capacity to serve that market.

German mill Van Roje exported 80,000m³ of sawn timber to the UK last year. Ulrich Van Roje said the euro’s 20% rise in the past year had made timber trade between Germany and the UK more “difficult”.


He added that, while he had not lost any of his UK business, conditions were currently not profitable, but he was keeping a long-term perspective to stay in the market. “In 2006 there was a big demand worldwide. This will come back next year,” he said confidently.

Klausner, the biggest German sawmiller with five sawmills and production of more than 4 million m³, exported 370,000m³ to the UK in 2007 – almost half of Germany’s total sawn exports to the UK during the year.

The company’s Niedersachsen mill near Hannover is currently being equipped with grading technology to allow it to increase its production range to include roof trusses, but has also detected the downturn.

“The whole timber industry throughout Europe is suffering from the international decrease in construction activities,” said Klausner’s Anne Leibold. “In the hardwood trade, the currency situation plus increased oak log prices have been the major influences, although demand for quality German oak beams is holding up well.

“Due to these two increases, UK customers have not increased their stock holding,” said Petra Schnatmeier, of oak specialist Friedrich Schnatmeier GmbH.

But she was optimistic about the near future: “I think the weak dollar makes the Chinese buyers go over to the North American product, such as white oak. So maybe competition on the log market in the middle grade will be slightly less next season [autumn], with the quality and prices being better.”

New mill

Last year beech specialist Pollmeier completed its third sawmill at Aschaffenburg, which has a cutting capacity of 450,000m³ of beech logs, representing an investment of €65m. It has reduced prices to react to falling prices for US hardwoods and a strengthening of the euro.

German export agency Kullik & Rullmann estimated that it supplied about 20% of Germany’s UK timber exports in 2007.

“The market is completely different this year. Its driven by the UK and global demand not being there and partially driven by the Scandinavians reducing prices. We have regular UK buyers who have kept buying from us, albeit at smaller volumes. Last year was an unbelievable year but we are still up compared to 2006.”

He said CLS and scaffold board business is satisfactory, but C16 demand has dropped considerably.

Meanwhile, Austrian company Mayr-Melnhof Group says it will become a leading player in the European sawmill industry with a turnover of more than €600m through its takeover of the Stallinger/Kaufmann Group.

The group, currently waiting for competition authority approval for the deal, says the acquisition will strengthen the company’s position on the central European market and boost activities in eastern Europe.

New entrants

A steady flow of new entrants to the UK market are promoting an increasing variety of products. One of these is Moco which processes timber from Scandinavia and North America into wood profiles for cladding (including prefinished product), flooring, skirting boards, construction wood and decking (including composite products).

Moco has wanted to access the UK market for some time but a lower level of quality standards compared with Germany and cheaper prices made it difficult.

However, attendance at Interbuild last year yielded contacts with several big companies and also demonstrated the increasing UK market for timber cladding.