Transcript American Hardwood in Europe American Hardwood Export Council 11th Annual Convention Hamburg, Germany Introduction by Ed Pepke, Convention Chairman and Project Leader, Forest Products Marketing Programme UN.

American Hardwood in Europe
American Hardwood Export Council
11th Annual Convention
Hamburg, Germany
Introduction by
Ed Pepke, Convention Chairman and
Project Leader, Forest Products Marketing Programme
UN Economic Commission for Europe and
Food and Agricultural Organization
Geneva, Switzerland
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Wilkomen in Hamburg!
(Welcome back to Hamburg!)
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Program
• US hardwood market update
• Economic overview and outlook for Europe
• European market for US hardwoods through 2006
• Demand for sustainable hardwood products
• Question time – market debate
• Global market analysis
• European market analysis
• Country market reports & discussion
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Announcements
• Turn off mobile telephones, please
• Governed by US anti-trust laws
• Speakers requested to respect timing
• Audience requested to respect timing too
• Hold questions for panel discussions
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Content of presentation
• Overall market developments, 2002 & 2003
– Overall
– Hardwoods
– Certified forest products
– Other forest products markets
• Hardwood production, consumption and trade
• Promotion necessities
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Sources of info
• UNECE/FAO Timber Bulletin, “Forest Products
Annual Market Analysis, 2002-2004”
• UNECE Timber Committee market forecasts
and statement, 2003-2004
• UNECE/FAO TIMBER database (forest
products statistics)
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Highlights of Forest Products Annual Market
Analysis, 2002-2004
• Exports of processed hardwood products
growing from eastern Europe and Asia,
notably China, significantly affecting both the
manufacture and trade of sawn hardwood, in
Europe and the US.
• Hardwood production forecast to increase in
Europe in 2003 and 2004, but fall in UN.
• In 2002 apparent consumption of sawn
hardwood fell 6% in western Europe, but
rose 6% in eastern Europe.
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Highlights of Forest Products Annual Market
Analysis, 2002-2004
• Trade of hardwood dimension continues to grow,
reducing sawnwood and log trade in the UNECE
region.
• Romanian exports rose 21% in 2002, doubling over
the last 5 years. Forecast to rise 25% more by 2004.
• After rising steadily, European Union consumption of
hardwood flooring, a major market driver in the last
years, levelled off in 2002.
• Demand from traders and manufacturers for certified
sawn hardwood continued to grow in 2002 and 2003,
but stock was unavailable.
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Europe: Hardwood lumber
25 000
1000 m 3
20 000
15 000
10 000
5 000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Production
Consum ption
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Europe: Hardwood lumber
10 000
1000 m 3
8 000
6 000
4 000
2 000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Im ports
Exports
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N. America: Hardwood lumber
35 000
1000 m 3
32 000
29 000
26 000
23 000
20 000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Production
Consum ption
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N. America: Hardwood lumber
5 000
1000 m 3
4 000
3 000
2 000
1 000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Im ports
Exports
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Timber Committee Market Statement
General Forecasts for 2003-2004
• Forest products markets in the UNECE region forecast
to remain at high volumes in 2003, although
oversupply appeared in several sectors. Outlook for
2004 is for little change, due to uncertainty about
economic conditions with the exception of Russia and
the central and eastern European countries (CEECs).
• In contrast to western Europe, North American wood
products demand is at a high level due to the strong
US housing construction.
• In contrast to western Europe, North American wood
products demand is at a high level due to the strong
US housing construction.
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Timber Committee Market Statement
General Forecasts for 2003-2004
• The Timber Committee discussed forest law
enforcement, governance and trade (FLEGT),
at present the main issue in the forest sector.
Illegal logging denies revenues to
governments, industries and forest owners,
puts downward pressure on forest products
prices, negatively affects workers and
compromises sustainable forest management.
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Certified Forest
Products
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Timber Committee Certified Forest
Products Forecasts for 2003-2004
• The area of certified forestland has grown to
approximately 160 million hectares
worldwide, of which 90% is in the UNECE
region.
• In environmentally-conscious markets,
certified forest products are gaining
recognition, but mainly at the business-tobusiness level.
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Timber Committee Certified Forest
Products Forecasts for 2003-2004
• Public procurement policies, in favour of
wood products originating from sustainably
managed forests, may become important
drivers.
• The lack of a price premium for certified forest
products and of comprehensive mutual
recognition of certification schemes remain
outstanding concerns.
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st
1
day’s
Summary
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Steve Sievers, AHEC Chair
• Welcome back to Hamburg
• Last time 8 years ago
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Eric Lacey, Averitt Lumber
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Mess in 2002
Figures lie and liars figure
Production costs rising faster than prices
Increased availability of substitutes
Strength US housing, flooring market
Convergence of white and red oak prices
Positive economic climate in 2004
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Dieter Hesse, UNECE
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Global economic context for Europe
Cyclical recovery underway
$ weak, question about advantage
Strong US housing construction: 1.7 million
Recovery tempered by public sector debt
Psychological effect of interest rates
Consumer and industry confidence less
negative
• Strong momentum central & eastern Europe
• Eastern Europe consumption increasing
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Dieter Hesse, UNECE
• EU enlargement, 1525 in 2004
– Large trading block, but not new
– Comparative advantages: labor, location
– Catching up, leveling the playing field
– Challenge will be joining the euro 2007+
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David Venables, AHEC
• Market in crisis is an opportunity
• American hardwood advantages
– Sustainability
– Availability
– Quality
• Changing image, fashion, success stories
• Changing market, more processed, finished
products exported
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David Venables, AHEC
• Lack of awareness, constraints
– Architects, specifiers
– Key manufacturers
• Competitive position
– US quality
– Alternate species
• Targeted campaigns
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David Venables, AHEC
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Growth possible
AHEC makes a diference
No reason to be in crisis
Can’t do it alone
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Rupert Oliver, hardwoodmkts.com
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Demand for info on sustainability
Retailiers demanding CFPs
Political developments
Public sector procurement
Key role of importers
Huge potential, demand by consumers
Mutual recognition, new system by World
Business Council for Sustainable Devt.
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Jamey, Peter, Heidi, Malte, Antonio
• Competition for flooring from China
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Growing market
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Crisis is an opportunity
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Quality, presentation improving, hence
gaining market share
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US producers concentrating on domestic
market now
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Common points
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Economic situation
Fashion trends
Substitutes
Joint promotion, education
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Mike Snow, Global Market Analysis
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Hardwood exports increasing
Some downward trends hide important volumes
Greater trade of hardwood dimension and components
Concern over illegal imports of hardwoods
China fast growth in trade, production and
consumption for many reasons
• Other countries with strong, strengthening markets:
Mexico, Italy, Japan, Taiwan
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Rod Wiles, European Market Analysis
• EU is most significant hardwood lumber and veneer
market, Canada second
• Shifting markets, strength in Italy, weakness in Spain
& UK
• Slide in Germany as furniture production shifts east
• EU enlargement could affect US hardwood exports
– Trans-shipments will increase, loss of stats
– Delays at borders
• AHEC focus on all Europe
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Country case studies & discussions
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Bottoming out, positive economic signs
American hardwoods a success
Currency devaluation helped
Certification increasingly needed
Legality of source
Variety of species in fashion, both red and
white oak
• Specifications getting more specific
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Common points
• Economic situation: recovery underway
• Fashion trends: blonde to darker woods
• Substitutes: wood for wood, other materials
for wood
• Increased trade of value-added hardwoods
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Common points
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Lack of awareness
Joint promotion required
Education at low and high levels
Better coordination between producers and
buyers
• Certification demand inconsistent
– Increasing questions on sustainability
– Proving legality
– Chain of custody, increasing, but a
limitation
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Common points
• Positive factors
– Quality, for example in kiln drying
– Higher grade availability
– Sustainability
– Alternative species
– Growth possible in Europe
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Common points
• China
– Source of increasing competition
– Lack control of imported raw materials
– European and US investments in
manufacturing
– Rising domestic consumption
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Common points
• Market in crisis is an opportunity
• Competition from eastern Europe sharpening
• EU enlargement
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Recommendations
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Match AHEC promotion to species needs
Consider solid hardwood hang tags on furniture
Education needed at all levels
Exporters must match grades & specifications to
importers’ needs. Market orientation process
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