| 29
produced softwood reached a volume of 3.3 million m3
for the period.
“As a sector we should be rightly proud to have delivered a record amount of timber to the market despite all the obstacles we have had to overcome,” he said.
He said the performance demonstrated the resilience of the timber sector. “We need to get the message out there to counter the opinion that there is not enough wood out there.”
Latvia and Germany registered large spikes in softwood shipments to the UK, the former seeing a 175,000m3 120,000m3
increase and Germany a rise for the period.
It was not only softwood seeing strong import volume growth, but also hardwood (+20%) during the period. However, at the time of the November
market conference, Mr Boulton referenced the pressure on prices at the time with a glut of CLS on the market with prices under pressure, explaining that as signs of a likely price correction after the big price increases (for latest softwood information see our softwood market report on pp26-27).
Keys risks highlighted by Mr Boulton include the ongoing HGV driver shortage, shipping delays, the impact of rising energy costs and the Russian log export ban. He also had a word to say about Brexit. “Brexit has not yet fully played out. There are challenges next year [2022]. They should not have too much of an impact on our sector, but they are still there.”
UK ECONOMY
Construction Products Association (CPA) economics director Noble Francis was on hand to explain the state of the UK construction market and the CPA’s forecasts. Mr Francis said the CPA forecasted construction sector output growth of 14.3%
for 2021, but had revised growth downwards to 4.8% for 2022. The latter is largely due to supply chain issues.
He said the construction industry had enjoyed a V-shape recovery from the initial Covid-19 shock and not been impacted by subsequent national lockdowns. Contractors had expressed confidence in prospects in the first half of 2022, with the trend towards houses rather than flats. But he said there was some medium-term concerns over housing affordability.
“Private housing and RMI demand remain strong but material availability and cost is an issue,” said Mr Francis. “The infrastructure sector remains strong but delays are an issue.” The CPA is seeing a trend in the commercial sector towards office downsizing, with some companies looking for smaller and better-quality premises. The CPA is forecasting private housing output to have risen by 17% in 2021 and by 6% in 2022, while private housing RMI is forecast to have risen by 20% in 2021, but to remain flat – albeit at a high level – in 2022.
Mr Francis highlighted heavyside materials such as bricks, cement and roofing products as being impacted by higher energy costs, since energy represents roughly one-third of total costs of producing those products. And he also referenced the extreme rise in 40ft Chinese container costs, with prices rising from approximately US$1,500 in the summer of 2020 to as much as US$14,700 in the summer of 2021.
Meanwhile, also at the conference, delegates heard about the private equity sector’s interest in the UK timber market during recent years. Cairngorm Capital Partners, Endless LLP, Hadleigh and Inflexion have all taken positions in UK timber companies over recent years.
Rob Wallace, director of Deloitte, said there had been a big increase in private equity M&A deals in the UK timber sector in 2021 (year to date to November, 2021) with 14 deals recorded, demonstrating considerable acceleration. Mr Wallace said private equity was attracted to the timber sector due to the industry’s link with construction, sustainability and consolidation opportunities due to the large element of small and independent companies in the sector. Rob Barclay, CEO of the National Timber Group (one of Cairngorm Capital’s investments), and Tony Hackney, BSW Timber group CEO, shared their experiences of private equity.
Mr Hackney said Endless LLP’s acquisition of BSW led to a doubling of turnover in just 18 months and led the company in the right direction. BSW was then the subject of an acquisition by Binderholz, which Mr Hackney said had been preceded by a careful selection and decision process by BSW involving a total of four potential trade partners. The Binderholz deal, he added, would see BSW keep its brand with exciting developments to come, hinting that people “would see timber in a new light”.
“There are various private equity funds and they all view the timber industry differently, so choose your partner carefully,” he said. Mr Barclay added that the timber sector was sometimes slow to change and a bit of expert investor help could enable companies to progress more quickly. Deloitte’s Mr Wallace said national housebuilders were very interested in increasing their share of timber framed housing. He admitted that private equity’s record of involvement in modern methods of construction – of various types – was not an unblemished record though. ■
Above left: About 150 people attended the inaugural TDUK AGM and global market conference Centre: Nick Boulton presented timber trade market statistics
Above right: Deloitte’s Rob Wallace talks about interest from the private equity sector in the wood industries
www.ttjonline.com | January/February 2022 | TTJ
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77
