W.L. West & Sons Ltd.
Timber Talks - January 2010

2010 - The Story so far

The government tells us that we are out of recession and that there has been 0.1% growth in the economy. This is certainly not the case in our industry and the Federation of Master Builders would agree with us for the construction industry. In a survey carried out by them 44% of their members thought that their workloads would decrease in the first three months of this year. With only 18% showing growth.

Our opinion is that we are certainly not ‘out of the woods’ yet, whatever the government choose to believe.

So what is the way forward to move our industry into more positive times?
Well, we want to work with you to ensure successful completion of your project. Our ethic is to ensure your repeat custom by making sure we give you a good and personal service. Many of our competitors are either unwilling or unable to give the ‘one to one’ service that we like to build with you — our customers. It is this part of the service that is difficult to place a price on. We may not always be the cheapest, but we do endeavour every day to build a close working relationship with our customers. This means trying to understand better what you require, and how our timber supply fits into your project. Recently one of our customers took time out of their busy schedule to visit us and explain their product in more depth. This meant that the workshop manager got to talk to the end customer and in doing so he better understood any issues that might arise. This helped us service their needs more easily.

Our team often ask you what the timber is for. We’re not being nosey. Understanding what the timber is being used for enables us to select the correct product for the job.

Just ask us, we like to be involved in your project.

Timber Supply Stats

The Timber Trade statistical information published for Jan 2010 has some very interesting reading. Volumes year-to-date remain substantially below 2008 however; with 2009 volume for the ten months to October 2009 at 6.4 million m³, compared to 8.1million m³ for the same period in 2008, a drop of approx 21%.

The hardwood sector, which interests us the most, shows that in these 10 months comparison to the end of October 2009, compared to the 10 months to the end of October 2008, there has been a drop of imports from S America by 49%, largely decking and constructional timbers.
A drop from Asia of 7%, the main species being Meranti, Keruing etc.
A decline from Africa of 19% main species being Iroko, Utile, Sapele, Ekki etc.

A 29% drop for timber from the USA, which accounts for approx over 60% of the hardwoods sold in the UK now. It was over 73% ten years ago.
However there was an increase for the 1st time from Europe importing hardwoods into the UK, this is now 4% up on the previous comparable 2008 ten months.

All stocks held by UK importers/merchants  are at an all time ‘low’. There are some merchants in the trade that are dumping Sapele on the market. In the short term this has a concerning effect on trade, but this will have to stop when imports arrive in Feb/March which are expected to be approx   7%+ higher price than current stocks have been.
In the 10 months Jan to October 2008, the total hardwood volume imported into the UK was~356000m³.

In the 10 months Jan to October 2009 it had dropped to~310000m³ this equates to approx 13% overall drop.

Hardwoods and softwoods are commodities which are becoming more ‘rare’ in volume terms brought into the UK. And on the forward markets it seems like the demand from the USA, China and India will leave us with less choice and less bargaining power. Prices must rise in general terms.
At a recent regional industry association meeting, the softwood industry representatives were of the opinion that softwood would rise in price during the year as a result of limited supply and other world wide markets willing to pay higher prices. So beware when pricing on forward contracts.

Capacity available

Kiln Drying for us has now developed to attract a wider client base, drying for other members of the trade and smaller users. Our three different drying technologies means we can offer a diverse choice regarding volumes. We have even the capacity to sawmill logs for others which we can offer at competitive rates.

With only 14% of the UK now with a manufacturing base where materials are handled and value added, there is becoming less choice generally, but not with us.

Trade is still tough, some projects priced are still on the shelf. Government spending will be reduced. Cut backs will kick in once the election is over. The ‘War Chest’ is running on low and the debt issue this country has to face will last for years to come. Spending will be in the bespoke niche sectors, doing what Eastern Europe are not able to or the Chinese won’t handle unless its bulk. Diversity, flexibility, compatibility to meet the needs of the customers is Key. 

We are here to do the very best we can, our machining, we believe, is second to none. Our ethics are pro customer loyalty as we opened this newsletter. Relationships for us count, together we can all trade in the near future. Without this symbiotic relationship, none of us can survive to look forward to the better days.
We look forward to pricing your projects.

2010 WESTS WOOD SHOW - Friday 7th & Saturday 8th 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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