W.L. West & Sons Ltd.
Timber Talks - October 2008

FINANCIAL MELTDOWN - THE CONTINUUM

Well what a month ……..

All of us will be working longer than expected after the bankers have wreaked havoc with pension funds and selling bad loans. What a fiasco, the tax payer is now bailing out commerce and the tax payer has to pay to borrow their money back. This affects all of us. The finance world has not been regulated in these past 7/8 years. Now the time has come for the people who they badly misled to bail them out. Imagine this happening in the timber trade! Well, it just would not happen. Visibility, competition, the reliance on repeat purchasing, customers and suppliers in this trade have to work well together. There is an important relationship which relies on knowing end use applications, working with architects and contractors, clients overseen by Heath and Safety, Government regulations on Coshh, Waste Disposal, Training CITB, Weights and Measures, British Standard Grades etc. Hundreds of them to ensure the “it does what it says on the can” approach. Our trade is so regulated and so weighed down by issues, we groan under the weight of it all. So where are the regulations in miss-selling debt? Who is responsible?

As a result of the financial climate, Insurance Companies in the trade, insuring credit sales are reviewing limits downwards making credit more difficult to get. This is putting a further strain on the industry. We will see a dramatic effect on cash flow as a result. Few of us fund our businesses without the help from the Banks. If their lending is cut and the cost to borrow is unrealistic, then this recession will drag on for longer.
Cash flow in times of recession [all of us who can remember the late 80’s and early 90’s] will remember cash flow is King. The final client is critical, ensure there are deposits, part payments, etc. All so necessary. Ensure payments are made to terms this is very important from customer to supplier. Even the Government are asking their departments to pay quicker to help cash flow which is hoped will filter down to those who added value to a product in the first place.

Trading in October was very average and made worse by the Bankers in the Banking industry (don’t you just want to substitute the 23rd letter of the alphabet!). The machining is working well, with a good turn round. Trade Sales are slow and volume wise less than expected, the tenders are slow and everyone is fighting for what is available.

TRADE NEWS

Sapele

Sapele prices are just holding at the moment, other African species from the Democratic Republic of Congo are likely to be stopped or slowed pending another Civil War. The country has and area similar to that of Western Europe and an area of the size of France has only approximately 30,000 people. If there are restrictions on supply this may well increase the price, there is a lot of supply at the moment however, but beware of replacement costs.

Yew

Yew logs are full of mystery and interest; we have just tendered and bought 4 artic loads of logs, a large part of which are veneer logs. With this there is branch material which will work for Oysters, Bands and Strings. Yew is one of our native post Ice Age species which was adopted by the Christian Church from Ancient Religions such as the Druids and other religious groups.
It has probably the widest colour range of any species. It is very durable, and tends typically, to hair line crack on drying. The sapwood is a very bright colour which contracts vividly with the heartwood and is often used as a contrast. In passing, Bow makers use the contrasting sapwood and heartwood for a technical advantage. The Cell Structure is slightly different and by contrast, the Heartwood is in Compression and the Sapwood is in Tension. In a Bow, the belly of the bow is sapwood out thus making for improved fire power. Not until the repeating Winchester Rifle in 1873 was there any weapon as fast as an Archer, to fire off repeated rounds. So experts have said.
Some of the yew will be planked by us for 2009.

Elm

We are about to kiln more Elm shortly, so in this next batch will be some 54mm seat material.

Cedar of Lebanon

Peter is still looking for Cedar of Lebanon logs locally, more to come on this one in due course.

€ & $

The Euro Rate has bumped around the 1:22/1:245 rate, so no real change there. Sterling still has not made the recovery as first thought would happen by November. The dollar rate has really hit us with a problem. The rate two months ago was approx 1:94/1:96, but has now tumbled to 1:54/1.58 this is an increase on the imports of approx 20% which will be arriving Dec/Jan 2009. The shippers may lower their unit prices but realistically they will maximise their opportunities. The Biggest importers of American hardwoods are Canada, the Far East and Europe. The Pound has weakened here and the forward thinking is that the Dollar will peg approx 1:1.65/ 1:1.70. Beware! there will be price increases in American hardwoods. If you are quoting for 2009, arrivals now are being affected. These days fewer companies buy currency ahead and work with in buffers in the market.

2009 Show

Please note that we have now fixed the date for the 2009 WESTS WOODSHOW. This will take place on Friday 8th & Saturday 9th MAY

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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