LET’S KEEP THE WHEELS ROLLING
The independent sawmill industry aims to keep the wheels rolling also during the current virus epidemic. Sawmills want to protect employees from getting infected, safeguard jobs and bring in valuable export euros from foreign countries.
The news coming from the European sawmill industry markets is, however, worrisome. Customer companies have been temporarily shut down in France, the UK, Austria, Italy and Spain, among other countries. Sawmills that focus on these markets have received requests to postpone deliveries, and production curtailments are likely. At the same time, there are signs that China is beginning to recover from the epidemic, and product flows from Chinese harbours are picking up. Uncertainty is growing in North Africa and the Middle East, but so far deliveries have continued.
The structure of the export markets has changed considerably over the years, with local production in the European export markets replacing Finnish sawn timber (Figure 1). The focus of exports has shifted to North Africa, the Middle East and Asia. This trend reflects the relative economic growth and demographic development in the markets. China has become one of the most important export markets. The change in the market structure has lowered the sawmill industry’s risk related to individual markets.
Changing the structure of the market has required active marketing from sawmills. The support for sales promotion work provided by the Ministry of Economic Affairs and Employment, Business Finland and the Ministry of Agriculture and Forestry has been invaluable to the sawmill industry. As the corona crisis continues to challenge traditional European markets, it is crucial that joint marketing efforts can be continued going forward and that marketing in China can be continued in new areas and customer segments, not to mention in selected new markets.
In uncertain circumstances, the operations of sawmills are guided with a sensitive hand. This can be seen in, among other things, sawmills’ wood procurement, which teeters between sufficiency of wood supply and excessive cutting. Due to the uncertain market, the intention is to avoid a situation where the volume of cut wood could potentially exceed market demand. Managing timber flows is especially challenging in the current situation, where weather conditions in Finland have varied from a lack of snow in the south to record snowfalls in the north. The duration and impacts of the spring thaw are difficult to estimate. Unfortunately, the situation will also affect harvesting contractors, who, like sawmills, face a difficult situation to start with.
Sawmills are also looking beyond the corona crisis – as they have during past crises (see Figure 2). The timber market has been exceptionally quiet since the start of the year. It’s time to start waking up timber trade. The sawmill industry buys wood for future needs.
Kai Merivuori, The Finnish Sawmills Association