In the next five to seven years, the volume of British-grown timber coming onto the market is set to increase markedly and the sawmills are gearing up for it.

Howie Forest Products Ltd’s output is 100% British-grown timber, with current production, all spruce, standing at about 135,000m3. This is expected to rise to 160,000m3 in five to seven years’ time.

“We are making progress each year and the volume is growing modestly,” said joint managing director Hamish MacLeod. “There is a ‘wall of wood’ out there which will be coming forward in the next five to seven years’ time,” he said, adding that the volume increases are a “gradual creep” rather than a rush.

He describes home-grown timber and imported wood as like-for-like products and believes that if the Baltic countries succeed in entering the EU, a lot of their competitive edge in terms of labour rates may start to erode.

“There is still a lot of timber coming in for the general construction market but I think we are moving to a more level playing field as far as costs are concerned.”

BSW Timber plc is in the unique position of having both a home-grown milling operation and a sawmill in Latvia.

Its annual home-grown production is about 500,000m3 of mainly spruce, with a fairly even product mix of construction, fencing/garden products and pallets and packaging.

Vice-chairman John Brownlie said BSW would be ready to deal with the wall of wood. “There is not a vast volume waiting to be harvested as we speak,” he said. “The way we read it is there will be quite a substantial increase in private sector forestry volume but quite likely a decline from Forest Commission forests.”

Exchange rate

Mr Brownlie said British mills are generally busy, buoyed by price increases and a more favourable currency rate. The strength of sterling two to three years ago caused considerable suffering for the UK mills.

But co-products do present a “difficult” situation. Shotton Paper’s decision to go over to 100% recycled fibre means it is no longer sourcing virgin material from sawmills and, as a consequence, BSW is exporting chips to Scandinavia.

Mr Brownlie said British mills have to be as efficient as possible as long as there is cheaper timber from other countries – whether it’s because of low labour rates in Russia or high technology in Sweden.

Meanwhile, heavy investment has been going on at James Jones & Sons Ltd, which has six mills.

At the company’s Forres mill, some £4m has been invested between 1999-2003, with the UK’s first finger-jointing line and two I-joist manufacturing lines coming on stream in recent months. I-joist production capacity will be about 6 million linear metres.

The Aboyne facility is being upgraded in a £1.8m spend, including the installation of new cross-cutting machinery and stacking systems. This is to help increase capacity and make more effective yield of the logs.

A £10m investment will be made in a new sawmill at the Lockerbie 2 site in 2005 to complement the existing production line at Lockerbie.

“The big issue now is taking some of the single shift capacity and taking that to double shift without having to make new capital investments,” said joint managing director John Kissock. “We have quite a bit of latent capacity.”

Production capacity this year will be 300,000m3. Of that, about 85% is spruce, with pine and larch also being used for fencing and some Douglas fir also being milled.

Tom Bruce-Jones, director at James Jones, said future projects include finding new markets for Sitka spruce, accessing the timber frame industry and developing markets for falling boards. Laminating is one possibility.

Falkirk-based James Callander & Son Ltd is producing around 50,000m3. Carcassing timber for the building trade is half of that figure, with fencing and packaging the rest.

“We are competing reasonably well with the imported product because of the currency shift,” said managing director Gordon Callander.

He said the declining price for co-products is an issue but the company is managing to shift them.

Optimistic mood

David Sulman, executive director of the UK Forest Products Association, said: “The mood is quite optimistic at the moment, though there are tensions with co-products and small roundwood. The home-grown sector has proved itself to be very resilient but it does need to find new markets for its products.

“This year is much better than last year in terms of trading conditions. It is certainly encouraging to hear pleasing reports. Right across the different markets – construction, garden products and pallets/packaging – companies seem to have had a far better year. There have also been price increases.”