Peter Whitfield, Timber Operations Director for UPM Tilhill, explains: “The positive news is that UK processors now have a market share of just over 41 per cent of the UK sawn timber demand. The total UK demand has shrunk due to decreased economic activity, such as house building, but this share is now very significant and there is every chance that domestic processors should be able to hang on to this share in volume terms even if the Euro weakens, as they are able to offer a quality product with excellent service and lead times.”
Peter added that the situation for UK processors will be helped because traditional timber importers to the UK such as Sweden have developed other markets in North Africa and Japan that may be more attractive to them in the long term.
With the problems in the Eurozone yet to play out, the report says it is difficult to estimate what impact these may have but, historically, a strengthening pound leads to a drop in sawn timber prices. However, this may be mitigated to some extent by a more resilient UK processor sector.
With a buoyant demand, contractors in the harvesting sector are being kept busy and seeing real productivity gains as demonstrated.
“Times are not easy for contractors or hauliers as we have seen fuel remain at historic highs and other running costs continue to rise. But this very important sector of our industry has coped well and we are seeing good investments in equipment and people. Good examples of this are the fact that we now have around 90 lorries with central tyre inflation systems which assist in decreasing road damage on fragile roads. We have also seen demand for operator training on harvesting machines increase, with three courses this year fully subscribed,”
Biomass is another important topic discussed in the Timber Bulletin and it highlights concerns about the slow development of the biomass sector with only major new development being the Tullis Russell CHP plant in Fife, due for commissioning in 2013, which will run largely on recycled wood as the feedstock.
The report says that biomass remains both a real opportunity and a threat to the timber industry and, while it is evident that the biomass demand has moved upwards in the past few years, forecasts made some five to six years ago have not yet materialised.
“There is no question that for the government to meet its commitments on renewables by 2020 more has to happen and quickly. It is likely that the biggest material impact on biomass consumption will come from RHI driven demand which will be local and smaller scale. The impact of this is uncertain but will become clearer over the next two to three years,” Peter stressed.
For a copy of the UPM Tilhill Timber Bulletin, please contact UPM Tilhill on freephone
0800 328 2128 or download from the website: www.upm-tilhill.com
Established more than 60 years ago, UPM Tilhill is a national company operating from a network of offices throughout the UK.
UPM Tilhill is the UK’s largest timber harvesting and forest management company. The company provides a full range of consultancy and contracting services to the forest owner and forestry investor. It also provides market leading services in utility arboriculture and commercial landscaping throughout the UK. Further information is available on the company’s website at www.upm-tilhill.com
Notes to editors:
For further press information contact Suzi Christie PR Consultant for UPM Tilhill on 01435 830031 or e-mail suzi@blueberry-
UPM leads the integration of bio and forest industries into a new, sustainable and innovation-driven future. Our products are made of renewable raw materials and are recyclable. UPM consists of three Business Groups: Energy and pulp, Paper, and Engineered materials. The Group employs around 24,000 people and it has production plants in 16 countries. UPM's annual sales exceed EUR 10 billion. UPM's shares are listed on the Helsinki stock exchange. UPM – The Biofore Company – www.upm.com