Four months ago, we were staring helplessly past drifting snow and later watching the relentless falling rain. All this, restricting access to the forest. The market was poised to take off, but the weather was inhibiting much of the planned activity.
However, the show must go on. The curtain finally lifted. From that moment, the level of business, has barely given anyone in the forestry sector a moment to draw breathe. So centre stage the action was frenetic, driven by the high demand and high prices. Working hard to catch up, it was almost as if two scenes had been rolled into one.
As I write, the last vestiges of the recent heavy falls of snow are disappearing from around me, here in the south of England. Nothing unusual about that, but these cold easterly weather systems have had an impact on all business activity, not least for the forest and timber processing industries. As you go further north barely a week has passed this year without weather related disruption.
In contrast to the weather, the wood processing sector has seen an early season heating up reflected in record standing prices across all sectors.
Following the successful completion of the earlier enabling works, Euroforest are proud to announce the awarding of the £1.5M main contract by Banks Renewables for the tree felling works at Kype Wind Farm near Lanark. For more details please follow this link:-
NEWS FROM EUROFOREST IRELAND - major new company formed to maximise the Irish forest resource for timber growers
Timber production on the island of Ireland is forecast to double from four million tonnes in 2016 to eight million by 2035. Log volumes will continue to increase as the sector pays dividends on the Irish Government's investment of some €3 billion in the establishment of a forest resource, which was matched by landowners - mainly farmers - investment of land to establish forests.
Kent Renewable Energy Project (KREP)
Euroforest limited are pleased to announce an exclusive supply contract for the 28MW Kent Renewable Energy Project based at Discovery Park, Sandwich, Kent. The plant will require some 240k tonnes of Wood Raw Material per annum much of which will be sourced from the under managed broad leaved woodlands of Southern England. The plant is set to begin production in 2018 producing electricity for the equivalent of 50k homes and reducing carbon emissions by some 100k tonnes per annum.
Please see the official press release below for all the details.
A great day out was had at Cluny Clays Kircaldy in support of the Timber Trades Benevolent Society (TTBS) who provide assistance to those past and present members of the timber trade in need. The Euroforest team were victorious in the 60 clay team flush shooting a score of 53.
Thanks go to TTBS, Cluny Clays and the event sponsors James Jones for a fantastic event.
Although there were signs emerging at the end of 2014 that the market might be beginning to slacken off it was a record year in terms of profitability for the harvesting and sawmill sector, but also, vitally, in terms of returns to growers. Today it is difficult to paint such a rosy picture. The slow-down in the market, driven by exchange rates, which led to a reduction in construction timber demand predominantly affecting the big carcassing mills in the north, left the southern mills relatively unaffected as they continued to experience strong demand for their main products which are in the fencing sector. The northern mills then began to target this market in order to maintain volumes, and the competition from them in the fencing sector has now started to cause problems for the traditional fencing mills. The result; reduced log prices which started in the north have now spread throughout the majority of the UK.
The exchange rate at these levels has a particular effect on the construction grades of timber, where home grown C16 competes directly with imported timber. The price differential enjoyed by home grown timber over imported timber has now completely disappeared with overall prices down significantly compared to last year. The sawn fencing market where many bespoke products are produced is less in direct competition with the imported trade. This has created a slight divide north and south in the UK with most of the major mills in the north being orientated towards the production of carcassing and the mills in the south generally directing their production towards the fencing market.
Euroforest Limited is pleased to announce the purchase of Sheffield and Company, Southwaite, Cumbria, England. Sheffield and company were established in 1947 and have traded successfully in Northern England and Scotland for the last 67 years. Sheffield and Company have specialised in offering a high quality harvesting and marketing service to clients, this is an excellent fit with the existing business of Euroforest Limited further strengthening our position in the UK market. Sheffield and company is now a wholly owned subsidiary of Euroforest Limited.
What a difference a year makes. At the beginning of 2013 demand was moderate and wintry weather which lasted well into April restricted despatch from the forest as well as building activity. This year has been the wettest in over 200 years as many know to their cost, but across the high producing areas of Scotland lost days access due to snow and ice can be counted on the fingers of one hand. Combine this with what can only be described as unprecedented demand across all sectors, and it is fair to say that our industry is buzzing!
With growth in the construction sector at its highest level for six years, there is some optimism that the recent green shoots of improving demand for timber products are gaining some real traction. The improvement which began in late spring is translating into improved sales in nearly all sectors of the industry. There is little sign of slackening demand even during the tail end of the year which is traditionally a time when most sectors are finding sales harder to come by and are beginning to build stock.
Euroforest Ltd is pleased to announce the appointment of Richard Palmer (A W Jenkinson Forest Products, Clifton, Penrith, Cumbria) as a non-executive director to the board of Euroforest Ltd. Richard's appointment follows the acquisition of a minority shareholding in Euroforest Ltd by Allan Jenkinson.
It remains the case that economic activity in terms of housing starts, in combination with exchange rates, are the two main drivers for demand in the UK wood products industry. New build numbers are slightly up year on year, although the number of new households created in the UK is fast outgrowing the level of new starts, so this imbalance must be good news in the short to medium term, as demand is translated into increased levels of new houses stimulated by government initiatives. Exchange rates continue to work in our favour across the spectrum of construction timber and board.
I am pleased to announce that Mr Tony Willis - Euroforest Vice Chairman has been awarded an OBE in the Queens birthday honours.
This is a very special moment for Tony and I am sure you will all join me in offering Tony our warmest congratulations. This is an outstanding award for a life time of achievement in our industry, Tony really has made a contribution.
David Symons - Managing Director
The Directors and Staff of Euroforest Limited are pleased to announce the company has been awarded a Queens Award for Enterprise in International Trade 2013. This award is a huge compliment to the dedication of our staff who work tirelessly to maintain the highest standards in their daily business.
2013 has started with a fairly subdued market for most processors, whilst the vagaries of the January and February weather have ensured a scramble for material to keep round wood stock levels at functioning levels. With disruption from snow and ice and the consequent thawing of forest roads, several sawmills came fairly close to running out of round timber and most others suffered a severe reduction in their stock levels.
‘The International Monetary Fund cut its economic forecasts for Britain and said more Bank of England stimulus - and possibly higher public spending or tax cuts - may be needed if the outlook darkens.The IMF forecast Britain's economy would shrink 0.4 percent this year, before growing by a tepid 1.1 percent in 2013.The IMF said the downgrade was part of a global slowdown - and that Britain's economy would probably outpace the euro zone's next year.’
Signs of a plateau are beginning to appear in the UK forest products market. For some time now our industry has defied the daily diet of dire economic news, however as stocks of both round wood and in some cases finished product begin to grow we approach the second half of the year with a little more caution than we did the first. While the industry is still performing well compared to much of the economy, the firming of sterling at a rate of around €1.25/£ begins to erode the competitive edge of our processors particularly on the export front. This coupled with poor weather has led to increased inventories around the country.
Most sectors of the homegrown timber trade have experienced very high levels of activity during the end of 2011 and the early months of 2012. The level of trade, in some cases, record throughput in some months, seems to defy economic gravity. Put against an economic background of European financial contortions to keep the Euro intact, and historically high levels of peacetime debt in the UK with all the austerity that brings; it seems barely credible that record levels of activity can be recorded in an industry that is closely linked to construction. I am sure there is a simple explanation, other than the value of sterling but I am tree counter not an economist and happy to raise a glass to the continued defying of gravity.
am writing this report in the midst of a maelstrom of a European debt crisis that is changing by the hour and seems increasingly intractable. The centre of this storm is the crisis in Greece and its potential knock on effect to some larger European economies. How does this affect us in the UK timber market?
The current market for standing timber remains buoyant despite some underlying concerns by end users. Demand for standing timber from merchants and direct harvesting organisations has kept standing prices in a very healthy state during 2011 with prices continuing to rise.