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Report
from
Europe, the UK
and
Russia
No change in depressed market conditions
There is little change in the European market for tropical
sawn lumber. There is still very little forward demand for
sapele, the main commodity species, as large importers in
the UK and the Benelux countries continue to off-load
stocks at below replacement value. Due to very slim
margins, there is very limited incentive for importers to
engage in trade in this species 每 as one major UK importer
commented recently ＆I haven＊t made any money on sapele
in over a year＊. He noted that the same could be said of
sipo, although a few other lower volume species have been
performing a little better, for example iroko and framire.
Confidence has been obliterated throughout a large swathe
of the European hardwood importing trade. This combined
with continuing lack of access to credit and insurance
cover has meant that the focus is still on reducing stocks 每
despite the clear evidence that supply further down the
pipeline has been greatly reduced.
There is however a feeling that prices are now very close
to the floor, if not already there. A frequent comment by
European agents is that with the so little buying for so
long, forward prices could rise quite dramatically in the
second half of the year if importers do at last turn their
attention to replenishing their depleted stocks.
Market perspectives from Ecobuild: Tropical
hardwoods left on the bench while others score
The Ecobuild event held in Earl＊s Court, London, from 3-5
March reaffirmed that environmental issues are likely to
play a key role in the UK construction sector despite the
economic recession. This year＊s show featured 800
suppliers from across Europe, a very impressive increase
on last year＊s 500 exhibitors given the current climate.
Judging from the crowds, the show is likely to have
achieved the organizers＊ pre-show estimate of over 30,000
visitors, breaking last year＊s record of 26,000.
High levels of interest in the show reflects both the strong
focus on sustainability and green issues that now pervades
the UK architectural and design professions together with
a host of recent UK government initiatives aimed at
boosting green performance in the construction sector.
Behind many of these initiatives lies rising concern for
energy efficiency as the UK 每 like all other EU countries -
struggles to reduce carbon emissions in line with
international Kyoto commitments. Conformance to the UK
government＊s Code for Sustainable Homes (CSH) became
mandatory for all UK housing developments in May 2008.
CSH sets minimum standards for energy efficiency and
provides UK homebuyers with information about the
environmental impact of their new home.
The timber industry was strongly represented,
participation being boosted by the Timber Works pavilion,
an area dedicated to first-time exhibitors and supported by
various UK timber trade associations. The clear message
coming across from the timber sector was that increased
use of timber can make a major contribution to sustainable
construction. A huge range of highly technically advanced
wood products and wood-based construction techniques
were on show, driving home the message that timber is the
material best placed to meet the challenges of 21st century
construction 每 that is combining rapid and cost effective
building methods, lasting technical performance and
beautiful structures with unbeatable environmental
credentials.
One particular highlight was the Eco house, a family home
built in wood to very high energy and environmental
standards in the space of only one week in 2008 during a
live edition of Grand Designs, a hugely popular UK prime
time TV show. Other highlights were ZedFactory＊s timber
frame Zero Carbon House; KLH＊s Carbon Neutral
Construction method comprising a honey-comb of solid
timber panels recently used for construction of a 9-storey
apartment block in London in the space of only 29 weeks;
and JELD-WEN＊s launch of DreamVu, the UK＊s first
volume made timber window to achieve a U-value of 0.7-
1.0W/m²K.
The strongest hardwood presence was the American
Hardwood Export Council (AHEC) with a large stand
featuring a new pavilion in tulipwood designed by a
leading UK architect. The pavilion demonstrates the
beauty and versatility of this abundant American species.
AHEC has been working with Osmose, a UK based
preservative treatment company to extend utility of the
species to external applications.
Other materials closing the green gap on timber
While timber maintains a strong reputation as the green
material of choice, the Ecobuild show also emphasized
that other material sectors are intent on closing the gap and
are now scoring green points.
The plastics industry highlighted the recent achievement
of an A-rating for uPVC windows in the Building
Research Establishment (BRE) Green Guide, now a key
reference for green procurement in the UK construction
sector as it is integrated into the CSH. The A-rating means
that uPVC windows are now regarded by BRE as just as
environmentally-friendly as wood windows. BRE justified
the A-rating at an Ecobuild side-event, pointing to the
efforts of the plastics industry to recycle a higher
proportion of windows at the end of their life-cycle.
However, participants at the event also noted that it is
difficult to judge the objectivity of BRE＊s rating as their
methodology lacks transparency and the baseline data is
not publicly available.
BRE were also playing a leading role at Ecobuild to prop
up the dubious environmental claims of the UK aggregates
industry 每 which like the plastics industry has set its sights
on undermining timber＊s lead on sustainability issues. The
UK aggregates industry promoted itself at Ecobuild as ＆the
Responsible Source＊, a claim largely dependent on their
anticipated conformance to a new BRE ＆Responsible
Sourcing Standard＊. The process to develop the BRE
standard, which was chaired by Tarmac 每 a large UK
aggregates supplier - was rushed through despite stiff
opposition from the timber sector to fit with the
procurement timeline for the London 2012 Olympics
(which requires that all materials be ＆responsibly
sourced＊). The BRE standard is now being used by the
aggregates sector as a tool to neutralize the wood
industry＊s sustainable source message.
Tropical hardwoods must be FSC certified
Ecobuild＊s message to the tropical hardwood sector was
＆if you want to participate in this market, make sure you
are FSC-certified 每 and even then watch your back＊. This
is well illustrated by the Wood Window Alliance which
led the UK wood window sector marketing drive at the
show. The wood window sector should be strong
marketing territory for tropical hardwood, these being the
only wood products able to perform well in exterior
applications without the need for fossil-fuel intensive
chemical or heat treatments. But the message from the
Wood Window Alliance was a negative one. Rather than
seeking to defend the use of tropical wood, the Alliance＊s
approach was to deny their continuing role in the UK
industry.
The Alliance＊s ＆Specifiers Guide to Timber Windows＊,
which featured at Ecobuild suggests that ＆tropical
deforestation is a major contributor to CO2 emissions and
global warming＊ without bothering to qualify this with any
statement about the distinction between forest conversion
and sustainable tropical forest management. This error is
then compounded in the Guide with the inaccurate
observation that ＆timber from tropical forests is rarely, if
ever, used by UK wood window manufacturers＊ 每 a fact
easy to disprove by a short conversation with any one of
many wood window manufacturers at Ecobuild who
confirmed their continuing use of sapele, meranti and a
range of FSC certified tropical hardwoods.
Many window companies participating in the show 每
which included just about all the major UK manufacturers
- did confirm that that they now require independent
certification, preferably FSC, of all their wood supplies.
They have been driven to this by the UK government＊s
commitment to ensure that all their wood is ＆legal and
sustainable＊ and by internal management issues which
mean that if you supply certified wood to one major
customer and certified raw material is sufficiently
available, it is simpler to switch over to 100% certified
production.
Many window manufacturers noted that while they still
supply small volumes of sapele and meranti product, they
have also made a concerted effort to transfer to nontropical
substitutes that are more readily available FSC
certified. These substitutes included plantation grown
eucalyptus from South America and South Africa, and a
range of heat-treated softwood products from Scandinavia
and New Zealand. While the latter are still available only
in relatively small quantities, prices are competitive
against tropical hardwoods, particularly as all are provided
FSC certified as standard. Their performance is also
extremely strong 每 one manufacturer noted that he is
willing to offer a 50-year guarantee for his heat-treated
softwood product, compared with a 40 year guarantee for
his tropical hardwood products.
Heat-treated pine products were also providing tropical
hardwoods a run for their money in other sectors. The
number of companies offering these products as
alternatives to tropical decking, flooring, cladding, and
other components is mushrooming. All the major UK
hardwood importers are now diversifying into these
products. Examples of heat treated branded products
include Lignia and Lunawood.
The flooring products on show highlighted the continuing
strength of the fashion for oak 每 a fashion that the
manufacturers are building on and extending by offering
oak products in huge diversity of finishes and stains. They
are responding to a fashion for darker colors not so much
by procuring tropical hardwoods, but rather by steaming or
staining oak to a color that is almost black. This trend is so
entrenched that one European flooring supplier at the
show said his company is now sourcing product
manufactured from German oak in Indonesia.
Mounting competition from non-wood substitutes
Furthermore competition from other non-wood sectors is
mounting. The plastics industry seemed to have
particularly set it sights on the tropical hardwood sector,
developing look-alike products for exterior applications,
such as garden furniture and boarding. A company called
Ecogenic was promoting a new product manufactured
entirely from recycled plastic that would replace tropical
hardwood plywood in non-structural exterior applications
(notably hoardings). Two plants each capable of churning
out 400,000 panels of the new product each year will be
set up in the UK during 2009.
Particularly worrying for the tropical sector, is that these
competitors seemed to be playing to a receptive audience.
There was a strong feeling amongst architects, designers
and specifiers, that the key environmental issue at present
is the ＆carbon footprint＊. This was linked to a preference
for any product ＆locally produced＊ and not perceived to be
transported over long distances. It also contributed to a
strong aversion to tropical hardwoods amongst many
people contacted at the show. There was a simplistic
assumption that tropical hardwoods are closely associated
with deforestation and therefore linked to increased
emissions.
There seemed to be nobody at the show willing to explain
the inherently strong environmental credentials of
sustainably produced tropical hardwoods. Even those
marketing FSC certified tropical hardwoods appeared
determined to muddy the message. The headline
marketing message of one flooring supplier specializing in
FSC certified products was ＆Did you know that the UK is
the second largest importer of illegally felled timber in the
EU＊.
People like tropical hardwoods 每 they just don＊t know it
There were a few crumbs of comfort for the tropical wood
sector at Eco-build if you were willing to look hard
enough. JELD-WEN, the UK＊s largest joinery supplier by
a significant margin, was displaying some high quality
Malaysian-manufactured windows and doors. The JELDWEN
representatives, when asked, were very ready to
comment on their Malaysian suppliers＊ reliability and
quality. The only problem was that the doors, while
backed by a meranti engineered wood product, were faced
with American cherry, while the meranti window frames
were painted clear white. It seems that, as things stand,
many UK buyers are happy to exploit the superior
technical attributes of tropical hardwoods, just as long as
they remain hidden.
European Parliament pass verdict on illegal logging legislation
Moves to introduce new legislation into the EU that would
require forest products operators to take steps to minimize
the threat of illegal wood entering supply chains are at a
critical phase. The European Parliament Committees
responsible for the considering and amending the draft
legislation before voting by a full plenary session of
Parliament, due on 23 April, have just passed their verdict,
proposing substantial amendments.
One view of the amendments proposed by the
Parliamentary Committees was expressed by WWF and
Greenpeace, who immediately welcomed the move,
suggesting the amendments represent a significant
strengthening of the original proposal. Greenpeace said
that the proposed changes would ＆make the timber
industry accountable and set up an effective system to
control the legal origin of wood＊. Many of the
amendments originated from Caroline Lucas, MEP and
leader of the EU＊s Green Party, so it is perhaps not so
surprising that green campaigning groups are so
supportive.
But according to another view, the Parliamentary
Committees were poorly advised, failed to grasp the
underlying concept behind the original proposal, and as a
result missed a real opportunity to implement more
rational improvements. The amendments proposed by the
Committees effectively turn a fairly moderate proposal to
extend the practice of due diligence amongst operators that
＆first place＊ timber on the EU market into a system of
rigorous state control over the entire European wood
supply chain.
The Parliament＊s amended text proposes that the central
objective of the EC＊s original proposed legislation be
changed so that all forest products operators in the EU
would be placed under an obligation to prove the legality
of the wood they deal in. The intent of the original
proposal 每 that extra requirements for traceability and
certification would only be required where there is a high
risk of illegal wood entering supply chains 每 would be
lost. The Parliament＊s amended text might be costly to
implement and require an army of technically qualified
chain of custody personnel that is currently absent. The
suggested measures may also be regarded as poorly
targeted - wasting time and resources on tracking wood
from all areas when it might be better to focus on a limited
number of high risk supply chains.
Whether or not the draft legislation is eventually adopted,
and the form it finally takes, remains to be seen. The
legislation is being considered under the EU＊s convoluted
＆co-decision＊ procedures. These require that the legislation
must be agreed both by the European Parliament (directly
elected by the EU population) and the Council of
Ministers (representing the EU Member State
governments). It is usual practice under this procedure for
the Parliament to propose a long ＆shopping list＊ of desired
outcomes, which is then adapted into a more realistic
compromise framework following input from the Council
of Ministers 每 the members of which actually have to take
responsibility for implementing the legislation.
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