Tropical Timber Market Report

Latest economic data is showing signs of vitality and governments around the world are stepping up their efforts to expand key sectors to grab market share. Once again, certification has become a double-edge sword that hinders development in some places, while bringing both tangible and intangible benefits in others. With Ligna just around the corner, ITTO gives us a timely look at the European timber market.

 

Malaysia

4.6 million ha PEFC certified forests in Malaysia

The Malaysian Timber Certification Council (MTCC) started operation in January 1999 as an independent organisation to develop and operate the Malaysian Timber Certification Scheme (MTCS). 

 

This has been endorsed by the Programme for the Endorsement of Forest

Certification (PEFC) which covers around than 300 million ha of certified forests worldwide.

As of April 2019, there were 4.607 million ha of PEFC Certified Forests in Malaysia. There are 362 PEFC Chain of Custody certificate holders.

In collaboration with the Peninsular Malaysia Forestry Department, MTCC recently organised a seminar to expand the understanding of forestry officers from the various state forestry departments on the implementation and requirements of forest management certification under the MTCS.

Forestry officers from state forestry departments of Johor, Kedah, Kelantan, Negeri Sembilan, Pahang, Perak, Selangor and Terengganu as well as FD HQ staff participated in the seminar.

 

2019 GDP forecast at almost 5%

The World Bank has forecast that Malaysia’s 2019 GDP should reach 4.7 percent driven by private consumption. Richard Record, the resident economist for Malaysia, said private consumption should continue rise but at slightly slower pace than in recent years.

 

Timber trade with China continues to rise – but steady decline in log exports

Demand for raw material from China’s timber processing industries continues to rise and Malaysia’s exports of timber to China are providing much of China’s timber raw material needs.

In 2014, Malaysia’s exports of wood products to China were valued at RM872.6 million and this jumped to RM1.1 billion in 2018 with sawnwood being the main export. 

Malaysia’s imports of wood products from China are also significant and growing. Imports were worth RM708.6 million in 2013 rising to RM1.5 billion in 2018.

Malaysia mainly imported wooden furniture (RM719.4 million), plywood (RM135.5 million), veneer (RM155.3 million) and other products including builders woodwork, joinery, mouldings and fibreboard.

 

Plans for pulp/paper mill in Sarawak

A recently signed MOU between a China-based Fortune 500 company and the Sarawak State Economic Development Corporation (SEDC) outlines plans for a joint investment in a pulp and paper manufacturing plant to be located in the Samalaju Industrial Park, Bintulu.

The Chinese company, Shan Ying, which is listed on the Shanghai Stock Exchange, is a manufacturer and distribution of paper products.

The proposed plant will integrate pulp and paper manufacturing and the production capacity is said to be in the region of two million tonnes annually. 

The Malaysian media has reported construction will begin next year.

Sarawak Chief Minister, Abang Johari Tun Openg, said the plant would use imported recycled paper for its production not natural resources from Sarawak within.

 

Indonesia

Fall in plantation log production

Plantation roundwood production in the first two months of 2019 fell 21 percent compared to production in the same period in 2018 according to Purwadi Soeprihanto, Executive Director of Indonesian Forest Concessionaire Association (APHI). 

In 2018, roundwood production was 3.91 million cubic metres per month.

Purwadi said the decline in log production in early 2019 was a reflection of weaker demand for raw materials.

Millers have said the on-going US-China trade conflict is affecting the performance of the main finished product exporters for whom plantation logs are the raw material.

Based on the V-Legal data from the Ministry of Environment and Forestry, in the first quarter of this year export of processed wood products totalled US$2.82 billion down 18 percent year on year.

Purwadi forecast that this year roundwood production from industrial timber plantation concessions (HTI) will increase 10 percent compared to last year's production of 40.13 million cubic metres while production from natural forests will be about the same as in 2018.

In related news, the Ministry of Environment and Forestry (KLHK) has announced it is not planning to issue new permits for industrial timber plantation concessions (HTI) this year. 

Hilman Nugraha, Director General of Sustainable Production Forest Management in the KLHK, said the current HTI permits covering 11.43 million hectares is sufficient to meet the industrial needs.

 

First quarter 2019 panel exports drop

The KLHK export database is showing that the value of panel exports in the first quarter of 2019 fell sharply. The Director of Processing and Marketing of Forest Products at KLHK said international demand remains sluggish and this is affecting exports.

In the first quarter of 2019, the value of panel exports was US$550.27 million, down 13 percent compared to 2018. In contrast to the decline in the value of panel exports, exports of veneer in the first quarter 2019 increased 12 percent.

 

Need to expand downstream manufacturing

The Executive Director of the Center of Reform on Economics, Mohammad Faisal, has pointed out that, despite being one of the largest wood product exporters in the world, the value of Indonesia’s furniture exports is only ranked 17th in the world. He urged greater efforts to restructure the development of the manufacturing industry.

He lamented that raw materials are exported especially to China to be manufactured into high value products for export.

 

Minister of Trade – no raw rattan export

The Indonesian Minister of Trade, Enggartiasto Lukita, has reiterated his ministry’s intention not to permit exports of raw rattan because it will undermine the Indonesian rattan industry and only enrich manufacturers in the importing countries. He said Indonesia needs to find ways to expand rattan product manufacturing within the country.

One issue to be resolved is the difference between the abundance of rattan in Central Kalimantan and the long distance to manufacturers who are mainly concentrated in West and Central Java.

In sharp contrast to the stance of the Minister of Trade, rattan producers complain about the effect of the export ban on rattan prices. They claim that the domestic industry cannot absorb their production and this drives down raw rattan prices. They say they have witnessed a 40 percent drop in prices over the past two years.

Chairman of the Indonesian Rattan Entrepreneurs Association (APRI) Kalimantan, Herman Yulius, said currently land owners are depressed because rattan prices continue to fall and they have no alternative market outlets.

APRI has requested the government to either permit the export of raw rattan so land owners can benefit or make greater efforts to attract investment in rattan product manufacturing.

 

Myanmar

Power outages scheduled – manufacturers and households affected

Manufacturers and households have been advised by the Mandalay Electricity Supply Corporation (MESC) to brace for scheduled power cuts. In a statement the MESC said it will cut power across different areas in Mandalay and the cuts will be around one to two hours at a time.

MESC has blamed increased demand and lower output from its power plants.

Myanmar’s capital Yangon experienced day time temperatures of 42 degrees centigrade last week beating the past record high of 41 degrees. The Department of Meteorology in Myanmar reported new temperature records for five cities.

The hottest was Chauk on the banks of the Irrawaddy River in central Myanmar where temperatures have been above 40 degrees in April. In these temperatures forest and mill operations have slowed considerably.

 

Trade regulation to protect domestic manufacturers

Added value wood products are amongst the target of an initiative of the Ministry of Commerce (MOC) as it drafts new trade regulations aimed at protecting domestic manufacturers and at the same time promoting exports of locally made products.

U Than Myint, Minister of Commerce, said because local manufacturers have been slow in investing in the latest production technologies they face tough competition from exporters in neighbouring countries.

The draft regulations are being developed with assistance from the World Bank and German development agency GIZ. Sectors with the greatest potential for higher added value production have been identified as agricultural and marine products, textiles and wood products.

 

Domestic building boom – timber producers benefitting

Domestic timber producers have been able to take advantage of the booming investment in the real estate sector in Myanmar which has seen massive inflows of foreign investment.

According to a report from the Directorate of Investment and Company Administration (DICA) over US$1 billion in foreign investment flowed into the real estate sector in fiscal 2017, second only to the amount that went into manufacturing.

 

India

Public-private partnership to develop plantations

The draft Indian Forest Act 2019, an amendment to the Indian Forest Act 1927, includes reference to production forests, mainly commercial plantations, in its definition of forests.

There is heated debate as to whether tree plantations can be defined as forests given the commonly understood definition in India. The government has said no action on the draft will be taken before receiving state governments’ comments.

Professor, NH Ravindranath of the Indian Institute of Science commented “If production forests are located in protected or reserve forest areas it’s not good idea as there will be fragmentation of forests. Such a move he says could also open the gates for illegal smuggling”.

In a follow-up to the draft amendment of the Forestry Act the government has released details of its policy for public-private partnership to develop plantations in ‘degraded’ forests. Analysts say the draft awaits Cabinet approval and will be taken up after the elections.

 

Japan

10 day public holiday to boost consumer spending

Sentiment among Japan's largest manufacturers became more pessimistic in the first quarter of 2019 as reported by the Bank of Japan's (BoJ) business survey, the ‘Tankan report’.

Of the 10,000 companies surveyed most see the slowdown in Chinese imports as a risk to businesses in Japan. The likely rise in crude oil prices is also an issue as this would push up production and distribution costs. A BoJ official pointed to weaker demand in Asian markets including China as having a negative impact on business sentiment.

If the trade talks between the US and China are concluded quickly then this would greatly ease the concerns of Japanese businesses.

On the bright side, Japanese people are in a festive mood as they prepare for an unprecedented 10-day holiday to celebrate the enthronement of a new Emperor.

This long holiday is expected to give the sluggish economy a short-term boost. Breweries, hotels, retailers, restaurants and train/airline operators are all expected to benefit from the holiday which runs from April 27 to May 6. 

 

Will they or will they not?

The government was quick to dispel the suggestion from a close aide to the Prime Minister that a delay in the consumption tax rise could be considered if business sentiment continues to weaken.

A government spokesperson reiterated that the consumption tax will be raised to 10 percent from the current eight percent “unless Japan's economy suffers a shock on the scale of the global financial crisis”.

 

Fiscal normalisation dismissed for now

In late April, the BoJ announced it plans to hold interest rates at the current low level for an extended period which analysts read as indicating no rise in interest rates for the next 12 months. This decision was expected and had an impact on the Yen/US dollar exchange rates.

At an international level, the collapse of the Swedish krona to its lowest level in a decade highlighted a common concern in financial markets, namely the stance of central banks around the world.

Sweden’s central bank has now joined many others such as the BoJ and the Bank of Canada in dismissing prospects of fiscal normalisation because of concerns on slowing international trade and prospects for growth.

 

Zero-energy housing by 2030

Japan aims to achieve zero-energy status for all housing by 2030 through having new home owners install solar power and other energy-saving features. This is part of the government strategy to achieve its commitments to Paris Agreement, the international framework to combat global warming.

It is also proposed that energy balanced status will be the aim for existing houses through renovations and subsidies.

Japan’s March 2019 housing starts were 10 percent higher than in last March and month on month starts were 6.5 percent higher. The good figures for March mark the third straight rise in starts this year. However, total starts in the first quarter of 2019 were unchanged from levels in the first quarter 2018.

 

Office furniture imports (HS 940330)

In February, the top two shippers of wooden office furniture (HS940330) to Japan accounted for over 70 percent of all HS940330 arrivals. China alone contributed around 60 percent with another 10 percent shipped from Portugal. 

 

Four other shippers made it into the top 10 list namely US, Vietnam

Indonesia and Poland with each contributing around four percent of February 2019 imports.

Year on year the value of Japan’s February 2019 imports of wooden office furniture (HS 940330) were, once again little changed but month on month imports dropped 24 percent.

This decline mirrors the pattern of trade over the past three years and if this pattern is maintained there a rise will be observed in March imports.

 

Kitchen furniture imports (HS 940340)

February data for the value of Japan’s wooden kitchen furniture imports (HS940340) reaffirmed the dominance of the top two shippers, the Philippines and Vietnam which together accounted for over 90 percent of Japan’s wooden kitchen furniture imports.

The third largest shipper, China, saw its share of February imports drop to 12 percent from 14 percent in January.

Year on year the value of February 2019 imports of wooden kitchen furniture rose 35 percent but month on month there was a 14 percent decline.

 

Bedroom furniture imports (HS 940350)

The continuously rising value of Japan’s imports of wooden bedroom furniture which began in in the third quarter of 2018 and extended to January this year came to an end in February when the value of imports dropped 15 percent compared to January. However, year on year the value of imports for this category of furniture was up 16 percent in February.

In February, there was an over 30 percent drop in the value of wooden bedroom furniture from China, imports from Vietnam were little changed from a month earlier but imports from Thailand and Malaysia rose (8% and 26% respectively).

 

China

Main wood products imports from EU in 2018

The value of China’s wood products imports from EU member states in 2018 was USD8.1 billion. The main imported wood products were wood pulp, paper, paperboard and paper products, waste paper, sawnwood, logs, wooden furniture and seats as well as printed panels.

 

Timber imports through Zhangjiagang Port in 2018

According to China Customs, log imports through Zhangjiagang Port in 2018 were 4.47 million cubic metres valued at US$1.03 billion. 48 percent was from Papua New Guinea and 34 percent from Solomon Islands and the balance from Equatorial Guinea (6%), Cameroon (5%), the Republic of Congo (3%), Suriname and the Central Africa Republic.

In addition, sawnwood imports through Zhangjiagang Port in 2018 were 41,020 cubic metres valued at US$23 million, 90 percent was from Gabon and others from the Republic of Congo, Papua New Guinea, Mozambique, Fiji and Cameroon.

 

Chinese ‘redwood’ industry in Dongyang city

Dongyang City, Zhejiang Province, is an important production centre for Chinese ‘redwood’ furniture and the ‘redwood’ furniture wholesale and retail markets have been upgraded.

At present, there are 1,336 enterprises producing carved ‘redwood’ furniture and they have a combined showroom space of over 1 million square metres. All products manufactured in Dongyang City carry a QR code to facilitate traceability.

Recently, a national workshop on traceability and legality for Chinese ‘redwood’ products was held in Dongyang City of Zhejiang province. The domestic market demand for ‘redwood’ products is huge and consumers are now demanding good quality and traceability.

In 2016, Zhejiang Province was the pilot area for tracking the origin and species of Chinese ‘redwood’ products and the traceability system was officially established in 2017 and ‘redwood’ products manufactured in Dongyang City carry a logo and QR code. This allows consumers to get information on raw materials, production, etc.

To further promote ‘redwood’ sales in the Province a highspeed train named "Dongyang Redwood" has been launched. The promotional campaign says “Buy ‘Redwoods’ in Dongyang”.

 

Europe

German wood consumption rises rapidly, but tropical timber rapidly loses share

Analysis of the timber market in Germany, which plays central in the European wood products sector, highlights the extent to which tropical wood is losing market share, with important implications for the long-term future of tropical wood demand in the broader European market.

Germany is Europe’s largest economy with GDP likely to have exceeded US$4 trillion for the first time in 2018 (according to IMF), over 40 percent more than the UK, Europe’s second largest economy.

Germany is Europe’s largest producer of sawnwood and wood-based panels, with output of 22 million cubic metres and 11 million cubic metres respectively in 2017 (according to FAO).

Germany is also Europe’s largest consumer (annually €9.4 billion) and second largest producer (annually €7.3 billion) of wood furniture. Germany’s annual per capita consumption of wood furniture is €118, second only to Luxembourg amongst European countries.

Germany weathered the economic storms of the last decade better than most other European economies.

Although GDP growth slowed in the second half of last year as Germany’s large export-oriented manufacturing sector came under pressure from cooling demand in overseas markets, domestic consumption in Germany has been very resilient.

Germany’s domestic market has benefited from strong consumer confidence, which has remained much higher than in other European countries in recent years, bolstered by a low and declining unemployment rate (which fell to only 3.1 percent in February 2019) and the expansionary policy of the European Central Bank which has combined low interest rates with quantitative easing.

In 2019, domestic consumption in Germany is expected to remain high, particularly as the German government has introduced further fiscally expansionary measures, including a higher minimum wage to help offset an anticipated slowdown in export demand for German products. Economic indicators this year have revealed further rises in consumer sentiment and the composite Purchasing Managers Index showing better business conditions.

Feedback from hardwood traders in Germany indicates that there is good activity in the door and kitchen sectors.

Furthermore, German importers continue to sell significant volumes of hardwood into the expanding furniture and joinery manufacturing sectors in Eastern European countries, notably Poland and Lithuania.

The successful 2019 edition of IMM-Cologne interior design fair held in January confirmed that underlying market sentiment in Germany is good and, with strong growth in overseas visitors, highlighted once again that Germany is viewed as a major global leader both in wood product design and innovative processing.

A commentary on material preferences by the fair organisers noted that “wood is simply invincible” because “it is not only sustainable, but also cosy, healthy and versatile”.

The fair suggested a particularly strong preference for natural wood to be used “as raw as possible: not coarse, but un-smooth" and that, while paler monotone colours are still very fashionable, there is a growing trend for “warm colours tending to dark that harmonise with reddish wood”.

On the surface, all this should imply good opportunities to increase sales of tropical timber in Germany. However, in practice, the market has been moving decisively against tropical hardwood for some time. This is clear from data presented by Rupert Oliver, Trade Analyst to the FLEGT Independent Market Monitor (IMM) project (hosted by ITTO), to the GD Holz “Foreign Trade Day” on 4 April.

Overall the data shows that Germany is importing large and growing quantities of timber products. Should the UK leave the EU, an event now scheduled to happen by 31 October 2019, Germany will become by far the largest single EU importer of wood products from outside the bloc.

However, most of the gains in German imports are being made in softwoods, particularly from Russia and other European countries. Furthermore, where Germany is importing tropical timbers, direct purchases from the tropics are falling rapidly and more is being purchased indirectly from importers elsewhere in the EU. This has important implications for future development of policy measures like FLEGT and EUTR.

Germany imports around 8 million cubic metres of logs every year, but much is low grade, mainly softwood, material for manufacture of panels and other industrial applications.

Around 90 percent of all Germany’s log imports derive from other EU countries.

In 2018, Germany imported only around 400,000 cubic metres of hardwood logs, of which 330,000 cubic metres were from other EU countries and 70,000 cubic metres from non-EU countries.

Germany’s imports of tropical hardwood logs declined sharply from 43,000 cubic metres in 2010 to only 9,000 cubic metres last year, with nearly all volume now sourced through Belgium.

Germany’s total imports of sawnwood increased from 5.0 million cubic metres in 2017 to 5.4 million cubic metres last year. This builds on a long-term upward trend which has seen Germany’s sawnwood imports increased by over 40 percent in the last decade.

85 percent of these imports comprise softwoods, and 67 percent is from other EU countries. Nearly all the sawnwood imported into Germany from outside the EU is from just three countries; Belarus, Russia and Ukraine.

The rise in Germany’s timber imports in 2018 comes despite domestic softwood sawnwood production hitting an all-time high of around 23 million cubic metres last year. The signs are that total demand for sawnwood in Germany is ‘red hot’ at present.

However, this is not at all reflected Germany’s tropical sawnwood imports which have been declining.

Germany’s imports of tropical sawnwood were only around 73,000 cubic metres in 2018, a slight improvement on the 67,000 cubic metres imported the previous year, but well down on 103,000 cubic metres imported in 2016 and around half the level prevailing a decade ago.

As in the log trade, there was a significant rise in indirect imports via Belgium between 2009 and 2016, at the expense of both direct imports from tropical countries and other indirect imports from the Netherlands. However, in 2017, there was also sharp reversal in Germany’s imports of tropical sawn timber via Belgium.

Germany imported 109,000 cubic metres of veneers in 2018, down from 115,000 cubic metres the previous year. Around 70 percent came from other EU countries and 34,000 cubic metres from outside the EU. Imports from other EU countries have been rising in recent years as a large part of Germany’s domestic production has been relocated to lower cost locations in Eastern Europe.

Meanwhile Germany’s veneer imports from outside the EU have fallen sharply, mainly due to a decline in imports from the US and Ivory Coast. This decline has been only partially offset by a rise in imports from Russia and Ukraine.

Germany’s plywood imports have been rising in recent years, peaking at 1.43 million cubic metres in 2018, of which 816,000 cubic metres was faced with hardwood and 615,000 cubic metres with softwood. Much of the recent growth in Germany’s plywood imports has comprised hardwood products (mainly birch) from other EU countries and Russia.

Despite stiff competition from birch plywood, tropical hardwood plywood has made gains in Germany in recent years, with total imports of tropical hardwood faced plywood rising from less than 100,000 cubic metres a decade ago to peak at 153,000 cubic metres in 2015. Imports fell back to 133,000 cubic metres in 2016, but rebounded to 150,000 cubic metres in 2017 and remained at that level last year.

Much of the recent gain in Germany’s tropical plywood imports comprises products either manufactured using tropical hardwoods in other EU countries, notably Italy and Spain, or imported indirectly via these countries.

However, there has also been an increase in direct imports of tropical hardwood plywood from Indonesia, from a low of 20,000 cubic metres in 2013 to 31,000 cubic metres in 2018.

Germany’s imports of moulding and decking products (classified under HS code 4409) increased sharply from 148,000 cubic metres in 2013 to 210,000 cubic metres last year. Nearly all the gains were in softwood products from other EU countries.

Germany’s imports of these products from the tropics have been edging downwards in recent years, from 42,000 cubic metres in 2015 to 40,000 cubic metres last year. Imports from Indonesia, by far the largest tropical supplier to Germany, fell from 33,000 cubic metres to 28,000 cubic metres.

 

IMM Trade Consultation explores drivers of tropical wood decline in Germany

Insights into the reasons for Germany’s shift away imports of tropical wood, particularly direct imports, were provided by the IMM Trade Consultation held in Berlin at the end of 2018.

This consultation forms part of wider series of consultations being held during 2018 and 2019 in all the main European markets for tropical wood products to obtain feedback from the trade on the potential to develop markets for FLEGT licensed timber in the EU.

During the Berlin consultation, to help place FLEGT licensed timber in the correct market context, traders were asked to identify and rank the key factors driving market decline for tropical timber products in Germany in recent years.

The main drivers identified, in declining order of significance, were:

•Substitution by temperate wood, composites and other materials (16 votes);

•Environmental prejudice and uncoordinated marketing (9 votes);

•Competition from China for material access and in markets for finished goods (9 votes); and

•The challenges of conformance to the EU Timber Regulation (8 votes).

 

The first driver is indicated both by the trade flow data, which shows large increases in Germany’s trade in wood products other than tropical timber, and by other reports from traders.

These reports highlight, for example, that all solid wood products, but particularly tropical, are losing share to wood plastic composites in the market for decking and other exterior products.

This trend is so far-reaching in Germany that even thermally and other treated temperate wood products, which are making ground elsewhere in Europe, are losing share in Germany.

Similarly, the market for real-wood flooring in Germany has been struggling in recent times even as broader domestic consumption trends have been on the rise, an indication of the pressure being felt in this market from alternatives such as laminated flooring and luxury vinyl tiles.

The fourth driver of tropical wood’s decline, relating to EUTR, features more strongly in Germany than in other EU countries. It is also reflected in the trade data which shows the growing proportion of tropical wood imported indirectly into Germany via other EU countries.

This tends to confirm reports that an increasing proportion of tropical wood imports into the EU are now being channelled via larger importing companies close to the main European ports that are willing and able to devote more time and resources for a wide range of specialist services, including EUTR due diligence.

A feature of the Germany IMM trade consultation (interestingly also repeated in a more recent Dutch/Belgian IMM event held in Antwerp) is that while EUTR is identified by the importing sector as a significant of driver of decline in tropical wood trade, at the same time it is also seen as a potentially important part of long-term strategy to maintain and, potentially, rebuild market share.

Having rated drivers of market decline, German importers at the consultation were then asked to rate the potential of different market development strategies for tropical timber in the EU. One strategy was rejected outright by all participants; this proposed ‘deregulation’, the total abolition of requirements for EUTR and FLEGT licensing, based on the assumption that tropical timber imports may be boosted by reducing the regulatory burden.

Not only was the deregulatory approach rejected, but the strategy receiving by far the most votes was the exact opposite; “a regulatory approach involving increased supply of FLEGT-licensed tropical timber linked to consistent and effective enforcement of EUTR to remove illegal wood”.

Practically all participants in Berlin regarded the EUTR combined with FLEGT licensing as the right approach to improve credibility and reputation of the tropical timber trade in the EU. The process of consolidation in the sector and the concentration of import activities in the hands of a smaller number of expert importers was also generally seen as a positive development by participants.

The second most favoured strategy for rebuilding tropical wood’s market share in Germany was identified as “highlighting/promoting the environmental benefits of tropical timber and underpinning these scientifically through life-cycle analysis (LCA)”.

Here, traders were also calling for increased regulatory support through government procurement policies.

Participants at the trade consultation also called for inclusion of FLEGT-licensed tropical timber in public procurement policies as evidence of both legality and sustainability.

While these strategies were seen as having potential to improve market conditions for tropical wood in the German market, trade consultation participants generally expected stagnation of the German and wider EU tropical timber market at the current low level, at least in the short to medium term.

 

New resource on benefits of FLEGT-licensed products

Timber buyers can now visit a new webpage in English, French, Italian or Spanish to learn about the business benefits of trading in FLEGT-licensed timber and the social, environmental and economic benefits that such trade brings to producer countries.

The EU FLEGT Facility created the page, www.timberbuyers.flegtlicence.org, to inform traders, specifiers, architects and retailers, as well as sustainability specialists and end consumers of timber products.

Combining text, pictures and an animated film, it describes how the EU is working with tropical timber exporting countries to stop illegal logging and promote trade in legal timber products.

The new resource explains what FLEGT licenses are, how they benefit timber buyers in the EU, and how the advantages of FLEGT licensing extend far beyond legality to encompass social, economic and environmental gains in producer countries.

It includes links to multimedia stories that highlight the benefits of FLEGT licensing, and to downloadable resources that can help timber buyers to communicate about FLEGT-licensed products with their customers.

The EFI FLEGT Facility, that developed the site, note that “FLEGT-licensed timber products are best known for their verified legality.

They automatically meet the requirements of the EU Timber Regulation so, for operators in the EU, they eliminate the risk of trading in illegal timber. Less well-known are the considerable social, economic and environmental credentials of FLEGT-licensed products.

Yet the trade in these products, and the reforms and improvements that stand behind the licenses, are helping ensure that forests contribute to economic growth and poverty reduction, while promoting responsible forest management”.

The new webpage is part of the FLEGT license information point, which the Facility set up in 2016 to provide practical information about FLEGT licenses, import procedures, trade scenarios and answers to frequently asked questions.

 

European parquet flooring industry reports stable to slightly positive trend

Compared to the same period last year, sales of wood parquet flooring in the EU in the first quarter of 2019 were stable or moderately increasing in all countries except Belgium, the Netherlands, Switzerland and the UK which reported limited declines.

The shortage of hardwood face material, particularly oak, which has been a significant problem in recent years, seems to have eased so far in 2019. 

However, prices are rising for panel products (HDF, plywood) used in the other layers. These are the principal conclusion of the Board of Directors of the European Federation of the Parquet Industry (FEP) when they met on 4 April 2019 to discuss the parquet market situation.

The FEP Board also provided the following insights into current market conditions in each EU country in the first quarter of 2019:

Austrian parquet sales were up one percent during the period:

•Parquet consumption fell four percent in Belgium during the period due mainly to competition from ‘wood look’ floor coverings.

•Baltic States’ markets remained stable during the period.

•There was a slight upturn in the Czech Republic parquet market during the period.

•The Denmark market was flat in line with the static performance of residential.

•Parquet sales were stable in Finland – the residential market is performing well but retail is declining.

•After a difficult fourth quarter 2018, the French market improved during the first quarter of 2019

•After a poor year in 2018, parquet sales increased four percent in Germany in the first quarter 2019.

•The parquet market in Italy was flat during the first quarter and no improvement is expected soon.

•Parquet sales in the Netherlands declined during period due to competition from ‘wood look’ floor coverings.

•The Norwegian market remained flat during period, seen as encouraging compared to significant decreases in consumption last year.

•Sales in Poland increased two percent during the period.

•The Spanish market was stable during the period, echoing the uncertain political context.

•Parquet consumption in Sweden continued to rise slowly, by one percent during the period with renovation the main driver.

•Switzerland consumption fell two percent during the period following completion of new construction projects.

•UK consumption fell one percent with the influence of the Brexit becoming discernible

 

European company looks to expand supply of acetylated wood in Asia

Accsys Technologies PLC has announced that its subsidiary, Tricoya Technologies Limited (TTL), has now entered into an agreement with Petronas Chemicals Group Berhad (PCG) to evaluate the feasibility of jointly funding, designing, building and operating an integrated acetic anhydride and Tricoya wood elements production plant in Malaysia.

It is envisaged that Tricoya wood elements produced at the plant would use acetic acid from PCG’s existing joint venture in Malaysia. The plant would then supply the wood panel industry within South East Asia, under licence, as the key raw material for the formation of Tricoya panels for the use in the construction industry in the region.

The Malaysia feasibility study forms part of a wider strategy to develop markets for products manufactured using Accsys technology. Accsys Technologies PLC has recently made multi-million dollar investments in a Tricoya plant for annual production of up to 30,000 tonnes per year of acetylated wood chips in Hull, England, and to increase capacity of its Accoya production plant in Arnhem, Netherlands, by 50 percent to 60,000 cubic metres.

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