W.L. West & Sons Ltd.
Timber Talks - November 2007

Strong sales continues

November Sales have been positive and above budget. In this months sales there have been some bigger than normal jobs which always helps the average invoice value.
The spread of end users is so diverse, thank goodness, that in certain areas of work there are always highs and lows. A good spread of customers helps even things out.

Euro rate fluctuates

A key factor this month has been the Euro, its exchange rate has dropped and at one stage was approx €1.36/£. Previously we have been used to €1.44/£. This has a direct effect on prices based on replacement costs and there will be an immediate difference of 5%. You will be pleased to hear that forward Sapele prices have levelled off now for early spring 2008.
When you are quoting ahead please build in a buffer for rising prices. The softwood market from Scandinavia has gone into overdrive with prices rising  from some shippers.

Inflation was the bane of Governments in the 1970’s and 80’s. Some of us can still remember the problems that this caused. Please note we will be as competitive as we can be, but all merchants and importers are faced with rising prices and it will have to filter through the system at some point.

CBI Results

     The CBI has sent us it’s November trend results. Most Importers have lower stocks but because of rising prices and working on replacement costs, the trend will be to run into the Christmas break with slightly higher value in stocks than usual. Growth for the industry is generally the worst it has been in the last three months. The important feature of their news bulletin is the expectations of prices rises and they are at their firmest for 12 months. “Most firms are facing intense cost pressures” they reported in October, another quote was, “A reacceleration in domestic prices is expected, with firms hoping to pass on some of the rapid commodity price increases”. So please be aware in longer term quotations.

What would be a sweetener for all of us would be to see a reduction in interest rates; this would help the cost of borrowing for business and individuals alike.

Everyone knows that, in this country, to make a long term investment in new machinery or new premises, one has to fight hard to get the best terms from the lenders in the market. Instead of the Government bailing out Northern Rock to the tune of £750 per tax paying person, why couldn’t money be made available centrally, to enable Government loans at interest rates which allow business to invest in the correct, modern kit?

Technology is key here due to the competition in low unit labour costs abroad. Add to that the advantages of time compression through investment in technology, and you have part of the recipe to enable us all to become more competitive in the future. We need long term discounted money for capital infra-structure, to ensure the future development and the growth of manufacturing industry in the UK.

Yard Changes

The yard here is undergoing an evolution in change, we are designating a central picking area to make the logistics work better for getting orders out and for loading. We are now catching up on a small percentage of orders where we have been missing the required dates. We should soon have a system where less will fall through the net. Please allow us to apologise for any delays during the last 6/8 weeks, we have had a huge learning curve to follow. Gerard Magill, and Craig Thorpe are fundamental to these changes and we are testing the new system now.

Perfect moulding

The team in the moulding shop have reached a new record; there has been yet another consecutive month without issue with any despatch moulded items, well done team! So there is an advert for us moulding timber for you! 

Round Timber sales

It is now the season to buy the Oak logs. Peter went to the Forestry Commission annual auction to potentially bid for UK Oak logs this week.  The prices were high and the parcels small, with a lot of indifferent qualities. For the ‘Trekka’ sawmills and one man operations the cost of logs here in small volumes may be OK, but for a sizable mill they are just way out of kilter. The major players did not buy much at all, some timber, we believe, did not sell.

In early December, Peter and Gerard will go to France to buy 12/14 loads of logs from foresters in France. The butts we need we can buy separately from the beam logs or we can buy just for beam and ignore any fencing grade Oak completely. This raises the general average of the quality of the parcels.

After buying what we want on a log by log basis landed to our gates, it is still cheaper than the British auctions which are supposed to be the beacon of log sales in the UK!!     

Oak colour issues

We have received a report that we commissioned from Mr Paul Sharphouse — Principal Technical Consultant for TRADA, with reference to the white patches we have been experiencing in European Oak over recent years. This tells us what we already expected. This marking has become more apparent over the recent years as the air drying seasons have been changing. The durability is not compromised and in time the effect will mellow off. He quotes: “Some authorities regard this as sufficiently common that it should be accepted as a natural characteristic of some oak.”
Please ask your external sales person to go into the findings in more detail

Christmas Closure

We close for Christmas at 12.00 midday on Friday 21st and return to work on Jan 2nd 2008

W.L. WEST & SONS LTD
Selham, Petworth, West Sussex GU28 0PJ
United Kingdom

Tel: 01798 861611   
Fax: 01798 861633   
E-mail: sales@wlwest.co.uk

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