Congress in the crisis year

The search for a way out of the present crisis was the key issue on the 8th International Sawmill Congress which was staged in Kassel/DE on 21 and 22 February. Among softwood sawmillers, there are "very, very many companies standing with their backs to the wall", as Steffen Rathke, President of the German Sawmill and Wood Industry (DSH) put it. Last year’s sales figures highlight the plight the branch currently finds itself in. It is the association’s assumption that this year the production will decline by 8% on 2011 to just below 20 million m³. This is the same output level they had in the crisis year of 2009. Also the domestic consumption has dropped significantly – by around 900,000 m³ to only 17.3 million m³. This situation has led to a series of production cutbacks and plant closures. The majority of the production cutbacks probably occurred in mills with less than 50 employees which are not reflected in the statistics, DSH-CEO Lars Schmidt pointed out in a press conference. Not much was said as to what the expectations were for the current year. "It may be that this year some businesses will be bought out and the problem [the overcapacity, editor's note] will take care of itself," Rathke said on a rather cynical note.

Loss with every cubic meter

Also Reinhard Hagenah, DSH board member, was very outspoken on the state of softwood sawmills at the press conference. "With each cubic meter spruce sawn money is ruined," said the owner of sawmill business in Bülkau/DE in northern Germany. Yet well booked timber construction companies offer hope for a way out of this "lousy earning situation," Hagenah went on to say. "We hope, however, that a lumber price increase will not immediately trigger higher timber prices, also. That would be disastrous for the industry."

Will the US bring relief to Europe?

DSH board member Jörn Kimmich, CEO of Binderholz Germany, believes the US will bring some relief to troubled European timber markets this year. Scandinavian lumber is being shipped across the Atlantic in greater quantities again, and also German and Austrian sawmills Kimmich expects to resume activities toward exports to the USA. In 2006, Germany exported as much as 2.2 million m³. After that, exports completely abated. A revival would bring relief at least on the sales front.

Keen interest in CLT

On the sales side, the softwood sawmilling industry at the Congress was seeking refuge once again in downstream processing. And it was no coincidence that the most talked about presentation of the first day was that on in cross-laminated timber. The great potential of CLT can be seen from how production quantities were devided between two neighbouring countries in 2011: 286,000 m³ in Austria against only 74,000 m³ in Germany, said industry consultant Josef Lumplecker, citing the Holzkurier (see issue 19/12, p 12).

Is Grand Fir bound to come?

Ways out of this misery were also sought in the forest. An excursion to the Northwest German Forest Research Institute of Göttingen/DE on 20 February provided an impetus for its 41 participants for a conversion of the forests. Douglas Fir and Grand Fir are considered to be alternatives in softwood, which the industry must come to terms with in the future. "Spruce will have problems. If we want to keep softwood, we will have to work with these species", concluded Rathke. Schmidt noted, however: "Spruce is and will remain our bread tree."

Good year for hardwood anticipated

The position of hardwood sawmillers today is diametrically opposed to that of their colleagues on the softwood side. Rathke, being managing partner of the Holzwerke Keck, Ehningen/DE, and a hardwood sawmiller himself, expects a good year for the industry. Negotiations with the forest were conducted on equal footing. As a result, the hardwood prices that came out of it showed "a good sense of proportion".

What is paradox about the hardwood sector is that earnings decline the further the wood is processed. For solid wood panels, for instance, imports from South East Europe reduce domestic calculations to absurdity. The demand for hardwood lumber from Asia is still good, however. What worries Rathke are China's activities at the Black Sea where significant amounts of ash, oak and black locust are purchased and shipped out to China via Athens port. There is a growing number of reports about illicit trafficking in this context. This is quite ironic, as the lumber produced in Romania being a EU member state is, by definition, legal timber according to HolzSIG. The German hardwood industry now wants Brussels to take a closer look at whether certain harvesting activities Romania are actually legal.

Will proHolz Germany be established?

The united association DSH also provides fresh impetus for jointly launched timber advertising campaign in Germany. "Intense discussions are underway to set up a new institution," said Schmid – which will "probably go by the name of proHolz Germany". Similar to the Austrian organisation of the same name, the aim will be to specifically target architects and timber construction businesses and that way promote timber sales.

Lively discussions

The final live discussions proved to be exciting. In a drastic manner, Klaus Henne, managing director of sawmill Streit, Hausach/DE, said that the European sawmilling industry is buying logs like a person dying of thirst would be buying water. "Primarily, the price does not matter. And then we discover that we generate negative contribution margins", says Henne. "Before we sawmills can encounter the future, we have to survive the present." Hans-Ruedi Streiff of the Swiss wood association Holzindustrie Schweiz described the problems in his "last remaining hard currency country". The strong Swiss franc has taken off about 20% from the glulam price. Andreas Reiterer of Egger Building Products pointed out the large potential for timber construction in Eastern Europe. According to him, what is needed are easy to use products.

A good spirit and its value

One definite highlight was the social evening, where at bar tables just as much talking shop as laughter could be heard. A cartoonist (aptly) imitated Hagenah as soon as he extended his welcome to the participants. This evening might not have seen the emergance of ways out of the crisis, but certainly it saw the spirits lifted.