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Report
from
Europe, the UK
and
Russia
Prospects for garden furniture
At this time of year, European garden furniture merchants
and retailers are typically busy preparing for the spring
season. But reports from European agents and distributors
suggest demand is likely to be very slow this year.
In public, designers and manufacturers continue to talk-up
the market opportunities in the recession from the trend to
¡°improve not move¡± and consumers¡¯ desire to protect
themselves from the harsh realities of life through home
improvement. But in private, there is more talk of the very
real difficulties of parting consumers from their money,
particularly for ¡°non-essential¡± items like garden furniture.
Perhaps even more worrying, there seems to be an
accelerating trend away from tropical hardwood in garden
furniture lines. In these difficult times, retailers are
unwilling to commit ahead and are looking more and more
for products that can be purchased in large volumes at
short notice and at reasonably stable prices. They are also
looking for products that can be readily adapted to abrupt
and unexpected changes in consumer taste and behaviour.
Tropical wood with its relatively long lead times, difficult
and uncertain supply base, and perceived environmental
problems, is featuring less in retailers¡¯ plans.
This move away from tropical wood is also linked to
fashion and changing consumer tastes. For example there
is a trend towards combining furniture for indoor and
outdoor use. This is encouraging greater interest in well
finished modular, foldable, and lightweight furniture in
alternative materials, using only small volumes of tropical
hardwood (usually teak) to soften lines. Other materials
suppliers, in league with European furniture manufacturers
and designers, are actively promoting this shift in fashion.
A range of alternative materials are benefiting from this
trend. Alongside other traditional materials such as glass,
aluminium, cast iron, and wicker (both natural & man
made), there is also resin, fibre glass, bamboo, acryliccoated
MDF, water hyacinth, and various forms of plastic.
The latter includes new Chinese recycled plastic
composites with a photograph film coating of various
tropical hardwood species presented as an eco-friendly
product. Innovative paint products paint products which
offer flexibility in colour and finishes is also encouraging
wider use of lower durability wood species as alternatives
to tropical wood in garden furniture.
Despite the expanding range of thermally-treated pine
products now available from northern Europe, for now
these seem to be less of a threat to tropical hardwood in
the garden furniture sector. Concerns still exist amongst
manufacturers about the longer term stability of these
products ¨C which can be brittle and have a tendency to
split ¨C and they are not yet a common feature of garden
furniture lines seen in Europe.
When talking about ¡°tropical hardwoods¡± in relation to
garden furniture, we are referring overwhelmingly to teak.
Teak offers by far the best combination of technical
characteristics, including: proven long-term weather
resistance; high strength; good machinability, screwing
and gluing properties; and consistent colour which is
resistant to stain. There is of course considerable
difference between plantation grown teak and natural
forest teak, the latter offering significantly higher quality
and yield, so the two are usually considered as entirely
separate and distinct commodities within the industry.
A few other tropical hardwood species have been used in
the past by the large South East Asian garden furniture
suppliers to Europe, notably balau/bangkirai and kapur.
However balau is now virtually logged out and remaining
supply is expensive. Kapur has a very poor reputation in
the UK industry. When attempts were made to extend
kapur¡¯s use in the sector several years ago, products
suffered from severe leaching problems which led to
massive claims on the suppliers.
The current pressure on tropical hardwood in the European
garden furniture market is particularly intense for midpriced
products manufactured from plantation teak. Very
high end products manufactured from natural forest teak
still retain a certain aura of quality which is hard to
substitute for. Meanwhile, teak has already been largely
squeezed out at the low end of the market which is now
dominated by cheap FSC-certified treated softwoods and
alternative fast-growing plantation hardwoods, notably
eucalyptus.
Despite current low levels of demand, lack of supply and
pricing remain obstacles to the maintenance of tropical
hardwood¡¯s share of the European garden furniture
market. Both the absolute level of price and price volatility
of tropical hardwoods is a problem. Although the
recession did lead to a fall in teak prices, particularly for
plantation stock, the perception in the garden furniture
trade is that supplies remain short and that the long-term
supply trend is not positive. While European retailers are
still pushing for lower prices for garden furniture,
indications from the tropical wood sector are that prices
now need to rise.
The supply situation in this sector is strongly influenced
by corporate social responsibility policies of large
European retailers. The major retailers in the UK,
Germany, Holland, Scandinavia and other EU countries
will not deal in any non-certified wooden garden furniture.
The general preferred demand in the tropical hardwood
garden sector is for FSC certification, although some will
accept as an interim measure wood verified through
various phased certification programmes such as those
operated by The Forest Trust (TFT) or Smartwood.
The development of FSC-certified teak plantations in
recent years has offered only a partial solution to longterm
supply problems. Wood quality offered by these
plantations is variable, but generally much lower than
natural forest products. Plantation teak tends to be cut very
young, after about 17 years growth, whereas traditional
forest teak is cut after 40 to 60 years growth giving much
larger dimension and higher quality timber.
There are also significant factors constraining efforts to
develop plantations. Other commercial cash crops such as
sugar cane, cassava, palm oil and rubberwood often seem
a better option for land owners and communities in
tropical countries, providing a quicker return and with no
certification issues to contend with.
The long-term future for tropical hardwood in the
European garden furniture sector seems bleak without
much more concerted efforts to market the merits of
tropical hardwood products compared to the alternatives
and to improve consistency of supply of certified raw
material.
Garden decking
Reports from the European wood decking sector suggest
that tropical hardwood continues to be chosen for very
high end projects to make an impact, although there are
now a wider range of products looking for market share.
Heat treated softwood products are beginning to make
inroads into the European decking market. Products
include Thermowood, produced by the Scandinavian
companies Finnforest and Stora Enso, and Plato Wood
from the Netherlands. According to a report in the German
trade journal EUWID, current European production
capacity of thermally treated wood is now at least 160,000
m3, with known capacity of 80,000 m3 in Scandinavia,
40,000 m3 in German-speaking countries of central
Europe, 30,000 m3 in the Netherlands, and 8,000 m3 in
the Baltics.
Wood Plastic Composites (WPC) are also having an
impact. This fact was highlighted in a recent report from
the German trade journal EUWID. Drawing on research
by Asta Eder of Kompeteenzzentrum Holz GmbH,
EUWID suggest that the annual growth rate of WPC
production in European countries is currently around 50%.
Total Europe-wide production of WPC amounts to
120,000 tonnes (excluding product destined for the auto
industry) and is heavily concentrated in Germany, Austria,
France and the Benelux countries. Around 68,000 tonnes
of this production is currently destined for the decking
sector. WPC market share in the European decking sector
is estimated to be around 6%.
A recent report on the UK decking market in the UK
Timber Trade Journal (TTJ) suggests that ¡°a key
specification requirement for any non-residential sector
application is the maintenance cost involved with a new
deck application. Composite is made from recycled
materials and is one of several products providing a
solution. Requiring little or no maintenance, the boards¡¯
durability makes them a good choice for commercial
installations where whole life costs and the maintenance
requirements present key concerns. Importantly, the
boards widely carry a low slip rating and can be installed
by way of secret clip and fixing to provide a flush, fix free
surface.¡±
Nevertheless, WPC materials have certain disadvantages
relative to tropical hardwoods. WPC decking looks
artificial, colours are quite dull and uniform, and there is
only a passing resemblance to real wood even with wood
grain effect. While being highly resistant to rot, WPCs can
still soak up water due to their mixing with organic wood
fibres. Efforts to avoid this have involved loading up wood
fibres with oils or other products that repel water, which
adds to the cost and environmental load. The polymers and
adhesives added to these products make wood-plastic
composite materials relatively difficult to dispose of,
although they can be recycled again as a new wood-plastic
composite. The products are not as rigid as wood and may
slightly deform in extremely hot weather. The material is
also sensitive to staining from a variety of agents due to its
porosity. The extra energy costs of production compared
to wood raises questions about their real environmental
credentials.
With respect to current levels of market demand for wood
decking, the TTJ report suggests that weak house sales are
dampening demand in the UK residential sector, a part of
the market where treated softwood now dominates in any
case. The commercial sector, where tropical hardwood
plays a more prominent role, is showing signs of
continued growth, for example in retail, educational,
leisure, and hospitality projects. Here wood decking is
increasingly valued for providing a relatively quick and
versatile way of transforming any space. TTJ note that
¡°while some big players are no longer investing in
developing the decking market, others still see merit in
doing so¡±.
EU Due diligence legislation
The European Council of Ministers reached agreement on
a text of the proposed ¡°due diligence¡± legislation targeting
illegal logging in late December 2009. The text, which did
not receive the unanimous support of all European
Member States, now needs to be agreed with the European
Parliament before it can become law.
This legislation was originally proposed by the European
Commission in October 2008. The legislation does not
attempt to monitor the legality of each individual import.
Instead it would require European operators that ¡°first
place¡± timber on the EU market (importers and producers)
to operate a management system designed to minimise the
risk of their trading in illegal timber.
The legislation would apply to all timber products
(everything from logs through to finished furniture) from
all sources. The legislation would define illegality in
relation to laws of country where timber was harvested.
The legislation is currently being considered for adoption
under the European Union joint-decision procedures that
require consensus agreement between the European
Parliament and European Council of Ministers.
A key aim of the legislation would be to boost European
market demand for wood legally-licensed under the terms
of Forest Law Enforcement, Governance and Trade
(FLEGT) Voluntary Partnership Agreements (VPA)
between the EU and a range of tropical countries. So far
the EU has completed VPA negotiations with Ghana, the
Congo Republic and Cameroon. Formal VPA negotiations
are on-going with Malaysia, Indonesia and Liberia.
Preliminary dialogue towards a VPA is underway with
CAR, Gabon and Vietnam.
As noted in a previous ITTO report, the European
Parliament published their initial reaction to the proposed
legislation in April 2009. The Parliament called not only
for the legislation to be adopted, but also significantly
strengthened. For example, Parliament included proposals
for tough sanctions at EU level, for much more detailed
guidance on the supplier risk assessment procedures to be
applied, and for compulsory certification of all wood
products traded in the EU within 2 years. They also called
for a specific prohibition in the legislation to enable
prosecution of any European operator found by the
authorities to be in possession of wood sourced contrary to
the laws of any country.
In December, the European Council, while strongly
supporting the case for legislation, essentially rejected the
more radical proposals of the European Parliament. The
Council text includes no prohibition on the first placing of
illegal wood on the EU market. Also national governments
would retain the right to define sanctions. Certification
would not become compulsory and is recommended only
as one possible due diligence mechanism to be used where
the risk of illegal logging is high.
However the decision of the European Council was not
unanimous across all European countries. Shortly after the
Council decision was announced, the UK, Denmark,
Belgium, Netherlands and Spain jointly issued a statement
regretting "that the Council Political Agreement is not
more ambitious" and calling for the EU to introduce a
prohibition on the first placing of illegal timber on the
European Union market. They argue that "this would
complement the due diligence approach and enable
Member States to take action against operators that place
illegal timber on the market".
The next stage is for the European Parliament and
European Council to try to reach a consensus agreement
which brings together their two contrasting versions for
the legislation. This is going to be difficult given that the
Council has largely ignored the Parliament's April 2009
proposals to make the legislation more restrictive.
Nevertheless, the Spanish government, which currently
holds the 6-month rotating European Presidency, has
indicated their intent of reaching a final decision before
their term of office is up at end June 2010.
UK construction outlook bleak
The UK construction industry continued to decline in the
final quarter of 2009, despite a return to growth for the
wider economy, according to the latest Construction
Products Association construction trade survey.
With the rising cost of materials and increasing fuel and
energy prices, coupled with decreasing orders and
enquiries, the construction industry outlook may
deteriorate still further as 2010 progresses. Signs of
recovery are not expected for at least another twelve
months.
There are signs of increasing pressure on an industry that
has already been in decline for two years. The
Chancellor¡¯s confirmation in December 2009 that public
spending on construction will fall by more than 50% has
added to concern that recovery may be delayed beyond
2011.
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