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Report
from
Europe
European wood window market stabilised in 2010
After a major downturn in 2009, the European window
market stabilised at a low level in 2010. Wood＊s share of
the overall market continues to increase. These trends are
expected to continue in 2011 due to continuing
refurbishment of windows to improve energy efficiency
across the EU. These are the results of a study carried out
by the Fenster + Fassade trade association (VFF) with the
support of Professor Dirk Hass of the
K邦nzelsauerInstitutf邦r Marketing (KIM), which was
presented at BAU 2011 in Munich.
The study reports that the overall European window
market grew by 0.4% to 125.8 million window units in
2010 (one window unit equates to 1.69 square metres).
This follows a dramatic decline of 22.4% in 2009. Of the
125.8 million window units produced in Europe during
2010, 75 million (59.6%) were in the 27 EU member
countries, 19.8 million (15.7%) in Norway, Switzerland
and Turkey, and 31 million (24.7%) in Russia and the
Ukraine.
The 0.4% increase in the European market in 2010 is
largely attributed to the market recovery in Russia and
Ukraine. After a collapse of 49.4% in 2009, the total
market in these countries grew by 21.4% last year. In
contrast, the market across the 27 EU states decreased by
6.6% in 2010 following a 10.9% decrease in 2009.
The overall decline in the EU market masks considerable
national variations. The German market has been the most
dynamic over the last two years seeing demand rise by
3.3% in 2009 and by 4.9% in 2010. This is largely due to
government support for installation of energy efficient
windows as part of Federal Government measures to
stimulate the national economy. However, government
support will be significantly lower in 2011 and the growth
in German window demand is expected to slow. With 12.6
million window units installed last year, Germany was thelargest single
window market in Europe during 2010 accounting for 16.8% of the EU
market and 10% of the
wider European market.
Other than Germany, Poland was the only growth market
for windows amongst the nine largest European countries.
A total of 6.36 million window units were installed in
Poland last year compared to 6.23 million in 2009. The
Polish market is expected to continue to grow in 2011.
Of all European countries, Spain suffered the largest
decline in demand for windows last year. The market fell
by 35% to only 5.15 million units in 2010. This follows a
18.4% decline in 2008 and 34% decline in 2009. This a
direct response to the collapse of Spain＊s construction
sector in 2008-2009.
Overall the VFF report suggests that the window market
across Europe will stabilise in 2011. Demand in Germany,
the Ukraine and Russia is expected to remain steady at last
year＊s higher levels. Demand in France 每 where
government support for energy-efficient refurbishment is
also planned 每 is expected to reach at least the same level
as last year. A return to growth is expected 每 albeit rather
slow 每 in Italy and the UK after three poor years. Demand
in Turkey is also expected to increase in 2011.
Market share of wood rises in the European window sector
The VFF report includes the latest available data (year
2009) for market share of different materials. This
contains some positive news for wood. In 2009, timber
windows accounted for 18% of the total window market
across Europe compared to 17% the previous year. The
share of timber-aluminium combination products also
increased from 3% to 4% over the same period. Although
PVC lost ground compared to wood in 2009, PVC still
retains a dominant position in the overall European
window market accounting for 56% in 2009 compared to
58% in 2008. Aluminium maintained its position with
22% market share in both 2008 and 2009.
The share of timber in window usage is heavily influenced
by cultural preferences and building styles in Europe.
Timber is particularly dominant in the Scandinavian
countries, with a share of over 70% in Norway, Sweden
and Finland. However, strong energy efficiency
credentials combined with improved quality and
consistency of factory finished units has meant that market
share is gradually improving outside this area.
Across much of the rest of western, central and eastern
Europe, PVC is very dominant, benefiting from cheap
prices, consistent products and a huge marketing and
distribution network. The PVC sector has also engaged in
constant innovation to improve thermal insulation,
aesthetics and improve recycling. These factors have
contributed to PVC taking the bulk of market share in the
※emerging markets§ of Europe. PVC＊s share is over 70%
in Russia, Poland and Turkey.
Aluminium is not strongly favoured in residential
construction and tends to do well where commercial and
public building activity is relatively important. Aluminium
has an unusually high market share in Italy (37%),
especially in the south of the country, and in Spain (70%).
Timber每aluminium＊s share is particularly strong in
Switzerland (27%).
A full copy of the VFF report (229 pages) is available for
€3500 from VFF at vff@window.de, Tel:
+49(0)699550540.
Tropical wood in the European window market
Unfortunately, advance summary information made
publicly available from the VFF report provides no details
of the relative importance of different wood types in the
European window frame market. This market has been
traditionally very important for tropical hardwoods. The
main application for meranti in north-western Europe has
been window frames 每 in solid form and often painted in
the Netherlands and UK, and increasingly as engineered
wood in central Europe, particularly Germany. Alongside
other uses such as doors and staircases, sapele is also used
widely for window frames in the UK, Netherlands,
Belgium and Spain. A few other tropical species are in the
same European market niche. Some, such as Brazilian and
African mahogany and Brazilian cedar, were formerly
major players but have fallen away dramatically as
commercial availability has declined. A few other species
are still used under specific circumstances, for example
African sipo, where there is willingness to pay slightly
more for better quality, and Brazilian
sapupira/angelimpedra when it can be obtained at
competitive prices or FSC certified. However volumes
involved are significantly lower than for either meranti or
sapele.
Anecdotal reports from European joinery companies
suggest that meranti and sapele continue to be favoured for
their aesthetic and technical attributes at the high end of
the window market. These two species are also commonly
held in stock by large European importers and are
therefore relatively easy to source by European
manufacturers.
On the other hand, there are also obstacles in the way of
the tropical species fully benefiting from the recent
increase in market share for wood. The environmental
issue has been a constant drag on marketing, although this
is gradually being resolved through progress on tropical
forest certification and constant lobbying and marketing
efforts, notably by the Malaysian Timber Council.
Meanwhile other challenges have emerged. Through
innovation and new product development, some
alternative wood products are already moving ahead of
tropical wood in the window sector with respect to specific
technical qualities. For example, thermally-treated wood
may conform to durability class 1 and is now regularly
offered with significantly longer life guarantees than either
sapele or meranti. This is becoming more of a problem for
tropical hardwoods now with recent expansion of thermal
treatment capacity in Europe (recently estimated by
EUWID at around 330,000 cu.m per year).
The shift to quality-controlled factory-finished window
units has also gone hand in hand with a growing
preference for engineered wood products. Tropical wood＊s
earlier competitiveness built heavily on ease and
adaptability of on-site use is being gradually eroded.
Malaysian and Indonesian manufacturers have adapted to
this trend through development and supply of laminated
products, which is helping to maintain position in the
market (although recent price trends have not been
particularly favourable). Lack of production capacity for
similar engineered wood products is an increasing source
of competitive disadvantage for African suppliers in the
European wood window sector. For a species like sapele
which is quite technical to machine, expanding market
share in this sector is likely to require greater availability
of semi-finished products in standard dimensions, either
glue-lamed or in solid blocks.
Conference on climate protection with new windows
EuroWindoor is hosting a conference in Brussels on 23
March 2011 on the topic of ※Climate Protection with new
Windows※. EuroWindoor is a joint European lobbying
group bringing together joinery industry associations from
the timber (FEMIB), plastic (EPW), metal (FAECF) and
glass (UEMV) sectors. EuroWindoor notes that ※buildings
are responsible for more than 40% of energy consumption
in Europe and thus offer great potential for energy savings.
The conference will provide in this context figures and
information on current European developments in
technical, legal and normative aspects.§ The 1-day event
will take place at the offices of the North Rhine-
Westphalia state representative to the European Union,
Rue Montoyer 47 in the European quarter of Brussels. A
complete programme and registration form with rates and
conditions is available at www.eurowindoor.org or send an
email to eurowindoor-gs@eurowindoor.org. Lectures will
be held in English.
European parquet flooring market stabilises at low level
Provisional estimates issued at the Domotex 2011 trade
fair in Hannover, Germany, by the European Parquet
Federation (FEP) indicate that parquet consumption across
the EU and European Free Trade Area (EFTA) reached
around 95 million square metres in 2010, the same level as
the previous year. These figures compare to 120 million
square metres in 2007 and 112 million square metres in
2008. FEP report positive trends in Germany and France
last year, but suggest that the Spanish market remains
weak. Figures on species utilisation for 2010 are not yet
available, but in 2009 tropical wood accounted for 10.2%
of production in a sector very heavily dominated by oak
(62% of production in 2009).
UK buyers anticipate rising plywood prices
The UK TTJ reports that talk of price rises dominates the
UK plywood market. Only a minority of traders now
believe that flat demand will take the edge off prices in the
UK as plywood exporters are pushing hard to raise FOB
rates. The pressure for higher FOB prices has been
particularly pronounced amongst Malaysian shippers keen
to cover rising log and raw material costs. Higher energy
and glue costs and labour issues are also expected to feed
through into rising hardwood plywood prices in China
after the New Year vacation.
In recent months, China has been taking an increasing
share of the UK hardwood plywood market which has
become ever more price conscious in the face of weak
consumption. According to TTJ, some importers now
believe that Malaysian products may follow in the
footsteps of Indonesian plywood and become increasingly
restricted to a small niche market. Longer term, this trend
may be countered by Malaysia＊s superior ability to offer
CE-marked and environmentally certified products,
particularly once the European Illegal Timber Law (ITL)
is fully implemented from March 2013 (see below).
However, for the time-being many smaller independent
importing companies continue to buy plywood on price
with little apparent concern for either technical or
environmental standards.
Meanwhile only very small volumes of Brazilian
hardwood plywood are now entering the UK, mainly only
in larger sizes, and prices to UK buyers have risen around
10% in the last six months.
Prices for birch plywood continue to rise in the UK and
wider European market due to limited log supply and as
many traders are now carrying only low stocks. Lead
times for supply of birch plywood have been increasing.
This implies continuing opportunities for tropical
hardwood products to take a greater share of the European
market for specialist grades of film-faced plywood.
EU firmly committed to eradicating illegal wood imports
This year, the European Union is focusing heavily on
implementing and expanding the range of Voluntary
Partnership Agreements (VPAs) in support of legal
logging in major wood supplying countries. It is also
engaged in a consultation exercise to finalise
implementation regulations for the Illegal Timber Law
(ITL) which was passed into law by the EU in November
last year. These were the main messages from the
presentation by Janez Potočnik, the European
Commissioner for Environment, at the Chatham House
Illegal Logging Update meeting held in London at the end
of January.
Mr. Potočnik reported that the EU has concluded VPA
negotiations with four African countries: Ghana,
Cameroon, Congo Brazzaville and the Central African
Republic. The EU is now negotiating agreements with six
other countries: Indonesia, Vietnam, Malaysia, Liberia, the
Democratic Republic of Congo, and Gabon. The EU also
continues to receive requests for information about the
VPA process from many other countries and expects to
intensify bilateral discussions with China, Russia and
Brazil. The EU is committed to finishing VPA
negotiations with at least two more partner countries in
2011. Indonesia is likely to be among them and would be
the first to conclude a VPA in Asia.
Mr. Potočnik said that the EC will act 'without pity' in its
efforts to ensure implementation of the ITL. From the
moment the law becomes fully operational on 3 March
2013, it will be prohibited to place illegally harvested
timber on the EU market. It will also be a legal obligation
for timber traders in the EU to undertake due diligence
before placing timber on the market for the first time.
They will have to keep records of their suppliers and
customers, and make their products traceable (at least to
the extent necessary to demonstrate a negligible risk of
illegal supply). The regulation applies both to imported
and domestically harvested timber.
According to Mr. Potočnik, the regulation will have the
following consequences. Firstly, legality will become a
minimum requirement for selling timber in the EU.
Secondly, there will be a shift from high to low-risk
sources, which will favour timber from verified legal and
certified sustainable sources. Thirdly, genuine traders will
not be undercut on prices.
Svetla Atanasova, a legal expert from EC Environment
Directorate, explained that between now and March 2013,
Member States will have to develop systems for
enforcement of the ITL at national level, including
designation of competent authorities and laying down
penalties. The European Commission must also draft
supporting regulations for implementation. By 3 March
2012, the EC must finalise the product scope of the
legislation and the rules for recognition of Monitoring
Organisations. The latter are organisations like European
timber importers＊ associations that will be responsible for
developing and ensuring implementation by their members
of due diligence procedures in accordance with the ITL.
By 3 June 2012, the EC must finalise detailed rules for
risk assessment and risk mitigation measures, and for the
frequency and nature of checks on Monitoring
Organisations.
In support of this process, the EC has commissioned an
external study (being undertaken by the European Forestry
Institute) to consider existing best practice for due
diligence and risk assessment. A wider stakeholder
consultation exercise is also underway and inputs from all
interested parties are now welcome. Those interested are
advised to contact:
John Bazill / Svetla Atanasova
European Commission
DG ENV.E.2 -Environmental Agreements & Trade
Tel: + 32.2.296.55.; + 32.2.299.60.93
E-mail: john.bazill@ec.europa.eu;
svetla.atanasova@ec.europa.eu
Website:
http://ec.europa.eu/environment/forests/illegal_logging.htm
Further details of the Chatham House meeting, including
copies of all presentations, are available at:
http://illegallogging.info/item_single.php?it_id=206&it=event
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