With still turgid economic recovery in some markets, soaring raw wood demand in others and increasingly strict eco requirements, the international hardwood sector has its headaches. That soon became clear at the recent International Hardwood Conference (IHC) from speakers and the 100 delegates drawn from 19 countries.
But the event was not downbeat. It also focused on the evolution of emerging economies as hardwood product consumers. The success of the industry in rising to environmental challenge, improving its green credentials and exploring structural applications were also seen as opening up new avenues.
Developments at the IHC, held in September in Copenhagen’s Moltke’s Palace, were also seen as a positive. It was the first time it was organised by the European Organisation of Sawmill Industries (EOS) and European Timber Trade Federation (ETTF), with the Danish Sawmillers Association and Timber Trade Federation as national co-hosts. This was seen as underlining a growing panindustry willingness to work together.
Opening with his ETTF counter part Andreas von Möller, EOS president Sampsa Auvinen said the market had pulled out of the downturn. But governments in the EU and elsewhere should still focus on expanding their economies. Production and construction activity were still at a low ebb and unemployment too high.
Mr von Möller echoed this view. EU sawn hardwood ouptut was up 8% at 11.6 million m3 in 2014. But most markets were not back to pre-crisis levels.
"EU construction is 20% under 2008," he said. "And sawn hardwood imports, 4 million m3 in 2007, are still below 2 million m3."
Rupert Oliver of Forest Industries Intelligence confirmed the total global hardwood market was back to US$38bn from a recession low of €25bn. But in the sawn market, tropical and temperate hardwood had fared differently, with the former recovering less rapidly; from 6 million m3 in 2009 to 9 million m3 in 2014, against temperate’s 7 million m3 to 11 million m3.
American Hardwood Export Council (AHEC) executive director Mike Snow said US hardwoods output also continued to climb, with 19.9 million m3 forecast this year. But the sector had fundamentally altered after the US housing crash produced a slump in domestic grade lumber sales.
"Grade lumber exports have become mills’ lifeblood with US consumption shifting from 60%/40% grade/industrial to the opposite," he said. "Exports are 17% of total output, but 42.7% of grade and 61% of FAS." Recently the strong dollar has depressed US hardwood exports to most leading markets, but 2015 will still see the second highest total, following 2014’s US$3bn.
Hardwood superpower
Another key shift in market dynamics, the focus of several speakers, was China’s emergence as a hardwood superpower. Before the recession, said Mr Oliver, the EU was global market driver. Now it was China. Its hardwood imports are up US$8bn to US$12bn in five years, with log imports tripling to US$6bn and its global hardwood plywood market share up from 10% to 30%. Mr Snow underlined this phenomenon by highlighting that, while US hardwood sales to Europe jumped a healthy 21% to US$307m last year, China’s were up 270% since 2009 to 700 billion board feet.
Jean-François Guilbert, managing director of French Timber, said one element of this shift was a concern – China’s log demand. Its 2014 European oak log imports were 352,000m3 or 41% of output, against 2009’s 41,500m3. And France supplied 247,000m3 – a "real concern for French mills."
On the upside for sawmillers worldwide, said speakers, China’s sawn lumber imports were also growing.
"The key is that it is now also a consumer goods market with huge potential," said Mr Snow. "It used to re-export 80% of its US lumber imports. Today 80% stays in China." Mr Guilbert agreed. EU lumber export trends were positive, thanks among other factors to the weak Euro, in North Africa, the Middle East, US, India and Mexico. But strongest growth last year was in China, where oak lumber imports reached 1 million m3 and beech 500,000m3. This helped keep EOS member output steady at 6 million m3.
Environmental focus
Environmental issues were also central at the IHC, including to the Africa focus from Ad Wesselink, managing director of Netherlands based Wijma group.
African sawn hardwood exports to the EU have stabilised he said, but were 530,000m3 in 2014, against 1.1 million m3 in 2004, and log exports 102,000m3 against 1 million m3. "The economy played a role here, but so did tropical timber’s environmental image," said Mr Wesselink. "So we must change it, especially raise awareness of forest management progress, like the fact that 5.5 million ha in the Congo Basin is now FSC certified and huge areas legally verified."
To the same end, Armand Stockmans of Belgian-based Somex said the EU industry should stress its commitment to complying with the EU Timber Regulation (EUTR). "And if suppliers can’t satisfy EUTR due diligence, we must strike them off and quickly," he said.
Malaysian Timber Council London director Sheam Satkuru-Granzella said tropical timber countries were also ever more environment and legality centred and aware of the market significance of these factors.
"Around 33% of Malaysia’s forest is now certified and we’re committed to completing the EU Forest Law Enforcement Governance and Trade Voluntary Partnership Agreement (FLEGT VPA) process," she said, while also highlighting certification scheme ambitions of China and India.
Malaysia, she added, had contributed to EU tropical trade upturn last year, with sawn hardwood exports up 14% to 194,000m3, flooring 7% to 1.2 million m2, and decking and moulding 29% to 140,000m3. Hardwood plywood fell 15%, but rose 33% early 2015. The FLEGT VPA initiative also formed part of the IHC’s wider eco discussion.
The ultimate goal of supplier country VPA signatories is to be authorised to issue FLEGT licences against timber exports, exempting them EUTR due diligence. In the meantime, to incentivise progress on the initiative and provide intelligence for licensed timber’s eventual arrival, the EU-funded, ITTO-backed Independent Market Monitoring Project is assessing VPA country trade flows and consulting EU companies on FLEGT-licensed material’s commercial prospects.
‘It’s a four year programme and should produce a wealth of data," project leader Mr Oliver told delegates.
Developments are also underway in the Sustainable Tropical Timber Coalition (STTC) an EU industry, end-user and government alliance for raising certified wood’s EU tropical market share 50% by 2020.
"We can’t press tropical timber producers to certify, if we don’t back markets for it," said Hans Stout, project director of IDHthe Sustainable Trade initiative, the key organisation behind the STTC.
In its latest development, the Coalition is working with the ETTF to channel STTC match-funding for sustainable procurement projects to federations and businesses.
Bridge to Bioeconomy
Further cause for optimism came from a focus on prospects in timber-based building. Peter Wilson, architect and head of Edinburgh Napier University’s Wood Studio, said environmental issues, demographic trends and advances in engineered timber combined to increase appetites for prefabricated wood construction.
"The world is rapidly urbanising and we can no longer just depend on concrete and steel," he said. "We need to do things more sustainably and timber is the solution."
AHEC European Director David Venables agreed and said a focus on specifiers’ combined environmental, performance and aesthetic concerns now shaped its research and promotional strategy. Outcomes were a US hardwoods life cycle assessment (LCA) database and the linked American Hardwood Environmental Profile (AHEP), a document detailing each timber consignments’ full eco and legality credentials.
AHEC also worked with design and engineering partners to develop US hardwoods’ structural application, including in engineered and modified form. One of the most outstanding examples was the Endless Stair, which was displayed in London and Milan in 2013. This highlighted the superior strength to weight ratio of engineered hardwood, using 2 common tulipwood in slim sections to achieve a robust strucure. Finnish architect Matti Kuittinen of Aalto University said the inherent low carbon material attraction of wood buildings was enhanced by their low energy requirements.
"They could be a key bridge between fossil fuel and bio-based economies," he said.