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

Is this the end of Credit - for now !!!!!??

Cash is King…… Cash is King

This is the war cry which should be shouted from the roof tops in these very difficult times. Banks and other financial institutions are against the wall and so too are members of the trade. Uncertainty, exchange rates, global slow downs, stock holdings are all taking effect.

Beware of Bad debts, it is critical that we have a good relationship with our customers and it is critical to inform us of problems and of any changes in the market. We, like you, cannot afford to be hit with any bad debts.

More is done now in the market on credit card and pro-forma work. Recently European insurers have taken a decision to lower credit limits, and in some instances they have taken a view that the UK market is at an all time low from a risk point of view and therefore will trade only on a cash basis.

We are at the moment one of the lucky few due to our longevity in the trade (est1865), this gives us a good track record with slow steady growth.  
There are dramatic changes ahead    remember Cash is King.

Exchange Rates

The current Euro/Sterling rate is the lowest since the Euro currency started. This time last year the rate was 1:42 now it is 1:18   - 17% difference.

The Dollar at this time last year was 1:98 at this moment 1:53, 23% difference.
This makes our imports more expensive, and consequently makes replacement costs through to the selling price more expensive.

Currency investors are choosing other countries with stronger Governments and less GDP debt which has consequentially made Sterling less attractive.

TRADE NEWS

Sapele

One of the bread and butter hardwoods caught in a swirl of prices. These are now settling. One company sold four artic loads over £3.00ft³ below replacement cost to raise cash. Forward prices will be about where they are now, for the next few months.

Sycamore

New logs are starting to come in now and we are re-building the stocks of Sycamore. We may not get the volume we need for 2009, so if you have forward needs/orders please let us know ASAP. We ran out of Sycamore after approx 9 months this year.
Please note we have draw side Sycamore in SE planed, this is a great opportunity to offer 15mm fin p/2/s 130 – 250mm wide 1.80 – 2.40m.

Softwood U/S redwood joinery

We are at the point of setting new standards on imported Scandinavian upper gulf redwood in U/S for joinery. For some time now we have been researching the market and checking the stocks. Both Mike Dalman and Chris Harris have been talking to our customers about the softwood marks and sizes the  market requires.
We are also looking into the possibility of re-drying the softwood to be more stable and predictable.  We should, all things being equal, see the first shipment in early Jan 2009. Training on softwoods will take place here in December so we can make the transition to softwoods more easily than softwood knowledge to hardwood knowledge. As a lot of you have commented, the softwood merchants who sell hardwoods do not, generally, know too much about the hardwoods that they are selling.
We aim to bring in the popular sizes 25x150mm, 32x150mm, 38x225mm, 50x225mm, 63x225mm, 75x225mm
We foresee selling it in three ways based on volume:

• Boards as rising
• 1m³ lots
• Pack unbroken 4/5m³ lots

Our aim would be to offer 3.6m and longer if possible.

Firstly, the big advantages to us is that we know who our customers are and in times like these we want to remain close and loyal to those that buy from us regularly and who pay on time. For this we will offer the softwood at very  favourable rates as a bolt on to our main  business.
Secondly, our transport costs are now averaging at £72.00 per delivery, so by putting softwood with the hardwood sawn and machined orders we ought to reduce the average cost.
Thirdly, we hope to eventually kiln the softwoods to unify the moisture contents so that the timber moves less and is more predictable to the New TRADA Dictate of 16%± 2% and in some  instances we can re-kiln lower for certain internal end use applications.
Finally, the profile cutters we have in stock, some of which mouldings you have already had in hardwoods, may be applicable to run in    softwoods.
We may move towards some stair string white woods & even newels maybe another issue to deal with, but all in good time, let’s get the first stage right first.. We welcome any information and requirements in this area.

We would like to wish all of our customers a Merry Christmas and a Happy New Year. We thank you all for your custom during 2008, the end of this year has been very challenging for all of us. We hope that 2009 will start of in a more optomistic manner for all of us.

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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