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GERMANY/AUSTRIA/SWITZERLAND

Full throttle!

Article by Gerd Ebner, translated by Susanne Höfler | 25.10.2019 - 11:06

Increases in demand for conventional laminated timber products glulam and structural timber (KVH) in the DACH region reached a medium single-digit percentage range per year. The growth in CLT demand in Central Europe and the European countries that are supplied from there is estimated to reach up to 30%. And there is no end in sight for this growth.

A lot of large-scale timber construction projects are in the pipeline and will be implemented in 2020. Using the order situation of prefab houses (over the course of 12 months) as a reference value for the development of the construction sector, continuous growth for CLT demand can also be expected for 2020.

"It is harmful for the product that projects have to be postponed due to a shortage of material. Therefore it is crucial that new good producers are entering the field." This is the general mood in the sector that will be welcoming a great number of new producers soon.

Immediate service for regular customers, others wait

For regular customers, logistics is in place: hardly any waiting times, well-attuned data transfer, perfect delivery. It is a whole different story for normal customer business, though. Here, delivery times are very long and can reach up to ten weeks or even more. This is definitely costing orders because producers cannot deliver on time. 

In winter, most producers finally find the time to work on surplus orders, maintain "overheated" production lines and build up minimum stock levels.

Sales variety

With virtually every new producer, a new sales approach is added. The highest added value levels can be found at Binderholz and KLH, each company operating with a very big engineering team. Now, also producers only supplying raw material are entering the sector – representing the other extreme of the spectrum.

This expanded product range will also prove necessary considering that construction projects are getting bigger and bigger. While five years ago, orders of 1000 m3 were already considered big, by now producers only call projects utilizing more than 3000 m3 of CLT „large“. Not to mention gigantic projects, where requests come from Asia for example (14,000 m3 of laminated timber for a building).

Stable prices but improved margin

CLT prices are still quite stable. This is surprising considering that the wood sector is not exactly known for missing the chance to increase prices. On the one hand, it is simply impossible to renegotiate prices several times in the long periods between offer, calculation and definitive order. On the other hand: A hidden price increase was achieved by not passing on the price reduction of raw materials to CLT users. Therefore, CLT prices will probably remain stable – also because compared to other construction materials, the price level is rather high.

CLT as sensible damaged wood utilization

Especially in times dominated by damaged wood accrual, laminated timber is almost like a gift from God: Blue-stained raw material can always be used in the middle layers. After the summer holidays, roundwood quality deteriorated. The current roundwood supply therefore only just suffices for good visible qualities.

Enormous lumber demand levels

Prices for fresh goods of high quality could rise again in winter since demand is enormous. Based on a ratio of 1.25 m³ of lumber input per cubic meter of CLT, producers already required more than 1 million m³ of lumber this year.

More integrated sites

Blessed is who owns an in-house sawmill. The Central European Stora Enso plants, for example, are already operating integrated sites. This can also be said for Best Wood Schneider, Decker, Schilliger. And other more or less integrated sites are to follow: Pfeifer Holz in Schlitz, Theurl, KLH 2, Binderholz possibly in Baruth or Finland, Stora Enso 4 in Zdirec. Mayr-Melnhof Holz 2 will also be located at a sawmill site: Leoben or Paskov/CZ. In all of these cases, the consideratoins are similar: On the one hand, producers are saving original freight costs (between €5 and 10/m3) – on the other hand, however, it is becoming increasingly important to have raw materials available in-house.

New productions need employees. Employees with experience in CLT – no matter whether in production or sales – however are not available on the free market. The only option for recruiting staff is still to resort to headhunters. This year, they also managed to return with impressive trophies.

Italy & France are comparatively small

Other big wood markets such as Italy and France, on the other hand, are only emerging for several reasons. Italy used to be a market with a glulam demand between 850,000 and 900,000 m3/yr. The current annual demand, however, is rather approaching 550,000 m3/yr. In terms of cross-laminated timber, Italy is still quite small with 100,000 m3/yr. CLT market growth will probably not exceed 10% per year. France currently has a similar level of demand (60,000 to 80,000 m3/yr).

The market in the United States with prices that are more than 30% higher than price levels on the European market would constitute an extremely profitable option. Analyzing US import statistics, however, deliveries from Europe are still only coming in very small doses. Estimations indicate an annual volume of not even 20,000 m3 in total.

Cross-laminated timber Production 2018

Laminated products, volumes in m3

1 = the company did not disclose any details

Instructions: Select the year in the top left corner. The size of the circle symbolises the output of the single production sites (according to data gathered by Timber-Online). By clicking on a circle, the production trend and address of the selected company appear under the interactive map. To compare companies, press and hold the shift key and click on the desired production sites.

1 m3 = the company did not provide details