W.L. West & Sons Ltd.
Timber Talks - November 2009

Christmas close down - 12midday on 23 December ‘09 - reopening 8am on 4 January 2010

SHOP SALE: 1 week only - 11 Jan 2010 - 10% off timber & turning blanks excluding Australian. 20% off DeWalt and Black & Decker Power Tools

Buy Oak in Europe? - Are you mad?

'Why on earth would anyone want to buy Oak in France?' A comment from a customer when he found out that we bought 1st quality Oak across the channel. What he meant was why not buy in the UK?  We have just been to the Forestry Commission hardwood auctions, and have seen prices being paid way above what we can pay in France for example, so, why buy in the UK? You, our customers don't like paying more than you have to, or would you pay more if you knew that it was from the UK? I somehow doubt it. And, we can be selective in France.

The FC is probably the largest forestry owner in the UK (there were a few private lots as well), but was there any prime quality Oak there? Well a few logs, but not enough to meet UK demand. And that's in a hardwood market that is significantly reducing in demand for hardwoods. So, do we have any volume of 1st quality Oak left in the UK? It appears that the answer is no. Or do we just not care a jot about commercial hardwoods in this country anymore? It seems to us that our country’s largest forest owner is more interested in the leisure pursuits that it's forests can offer than the commercial hardwood opportunity it might be able to offer. Private hardwood does come to auction or private tender, but not in any quantity. I fear passion for hardwood forestry in our country may have waned. Come on, prove me wrong.
Many of you will not know quite how the auction system works in the UK. ‘Parcels’ of timber are put together from various landowners, these parcels will generally include the whole tree. This means that you will be bidding for timber that MAY contain 1st quality timber, but WILL definitely contain poorer quality timber. So, now we have the quandary, what do we do with that poorer quality element? To put it in perspective, of the 45 lots in this auction we looked at 9 lots and measured 4. These were lots that we felt would make some planking timber. Of the 4 we measured, 427m³; less than 10% of that total we felt would make 1st quality timber!! Now, let’s ask that question again: 'Why on earth would anyone want to buy Oak in France?'

Trading

The weather for November has been atrocious and, traditionally the busiest month of the trading year, has been pretty flat. The odd bright spot but realistically flat. One of the biggest issues is that the order values are down, although the number is approx on line with last year,
However, tenders are starting to appear again, and with this a brighter future for the end of the 1st quarter in 2010. But then there are the December/January trading months which can go either way.

Internally, the machine shop has been holding up well with a lot of machined work going through the business. We have even been machining free issue materials for other merchants (those without machining facilities). To niche the market further out, kilning capacity has been taken up with two other merchants, kilning a range of both hardwoods and speciality softwood for them which all help the mix. The work in the sawmill has been taken up with sawing some very good Sycamore, and this, as you will be aware is one of the very few hardwoods which can go straight into the Cigomak vacuum kilns to be dried ‘white’. So far we cannot buy enough Sycamore logs but we have got off to a good start.

Following on from this we will start to cut the Oak planking logs we have accumulated over the last 6 months or so.

Money Markets

We all thought that by this time in the year the Euro rate would be back to the 1:30 area,  but instead with the Bank of England pumping more money into the economy, the ‘Fiscal Easing’ is making the supply of money in the system greater than where the equilibrium balance for demand and supply would naturally be. Therefore, as a result there is too much Sterling in the economy. This is earmarked for banks to lend, although this is not apparent yet.
The amount of Sterling on hand is depressing. It’s international value around the globe is now not as attractive as other currencies. The outlook for this is that euro imports and dollar imports are still more expensive than they should be.
Are customers buying lower grades of timber in an effort to become more competitive? But are their waste factors insidiously increasing as a result? We would like some feed back?

The Directors and staff of W.L.West & Sons Ltd and PRO Fencing would like to thank you for your custom and loyalty this year, and wish you all a Very Merry Christmas and a Happy and Prosperous New Year. We have experienced one of the worst trading periods in history, let all hope the New Year sees a dramatic change.

 

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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