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Report
from
Europe, the UK
and
Russia
EU plywood market still dull
Severe winter weather across much of north-western
Europe made for a slow start to the plywood business this
year, keeping both traders and builders away from work.
Although weather conditions improved in late January,
few traders are expecting a significant upturn in business,
at least during the first half of the year. Even with clear
indications that CIF prices for tropical hardwood plywood
are now rising, there are reports of UK distributors offloading
stock at below replacement cost in the face of very
slow consumption. This suggests that prospects for any
significant increase in forward orders are limited, at least
in the short term.
Significant rises in European CIF prices for tropical
hardwood plywood are expected on the back of dramatic
freight rate increases together with limited stocks in South
East Asia and Brazil all coming on top of the moves by
producers to recoup higher raw material costs.
While CIF prices for raw BB/CC Malaysian plywood sold
into the European market are currently being quoted over a
wide range, the general consensus is that UK importers
will have to contend with price increases of around 10-
20% between January and March 2010.
Only relatively small volumes of Brazilian and Indonesian
tropical hardwood plywood are now being sold into the
European market. Production capacity has fallen
significantly in both countries and products are generally
not price competitively against Malaysian plywood in the
European market. In Brazil, a larger proportion of product
is also now been diverted to the domestic market.
Prices for Chinese plywood are also been quoted over a
wider range than previously seen, although indications are
that FOB prices are relatively stable while CIF Europe
prices are rising due to the freight rate increase. Quality
problems have led to a widespread switch away from
imports of Chinese poplar core products in favour of
products with a eucalypt core.
An indication of the dramatic decline in tropical hardwood
plywood trade into the EU in recent times is provided by
the latest Eurostat data to end September 2009.
Overall EU imports of hardwood faced plywood from
developing countries were down nearly 45% compared to
the same period the previous year. All the major EU
importing countries, with the exception of France, suffered
very substantial declines.
The fall in plywood imports into France was less dramatic
only because of a significant shift in okoume plywood
manufacturing capacity away from France into Gabon.
European imports from all four of the leading suppliers of
tropical hardwood-faced plywood declined dramatically
during the 9 month period 每 although imports from
Indonesia and Malaysia faired marginally better than
imports from China and Brazil.
EU veneer plants at 50% capacity
The German trade journal EUWID (www.euwid-woodproducts.
com) reports that the European veneer industry is
currently facing major capacity utilisation problems.
EUWID suggests that Central European veneer plants are
running at no more than 50% to 70% of available capacity.
Although this is largely due to weak veneer consumption,
lack of supply of quality veneer logs is another
contributing factor. Veneer mills are struggling to obtain
appropriate raw material as harvesting levels throughout
the world＊s major hardwood producing regions have been
curtailed in the face poor demand from the lumber sector.
Levels of demand for the best quality veneer hardwood
logs are currently in excess of the very low levels of
supply.
The latest Eurostat trade data to end September 2009
highlights that tropical hardwood veneer imports into all
the major European markets declined significantly last
year. The 62% fall in Spanish imports is particularly
dramatic and is indicative of the huge downturn in Spain＊s
door sector when the property bubble burst.
The data also indicates a noticeable shift in European
sources of tropical hardwood veneer last year, with the
Congo Republic and Gabon generally increasing share at
the expense of Ivory Coast and Ghana.
Interestingly China, despite a massive increase in veneer
manufacturing capacity in recent years, has yet to make
any real headway in supply of raw veneers to the EU.
European window market
A new European market analysis by the Association of
Window and Facade Manufacturers (VFF) and the
Institute of Marketing KIM K邦nzelsauer suggests that
overall European demand for windows is likely to have
fallen significantly in 2009, although the decline was not
felt to the same extent in all countries.
The VFF suggests that in France, Spain, the United
Kingdom and Netherlands, market demand for windows
declined sharply in 2009, following to downward trend in
overall construction activity.
However sales of windows in Germany increased by at
least 2% in 2009 due to state funding and public
commitment for energy-efficiency measures. Several other
smaller markets also performed reasonably well in 2009,
including Austria and Poland.
In their advance publicity for the report, VFF made
available Europe-wide figures for window consumption in
2007 and 2008 (2009 forecasts are only available to those
who purchase the report).
Total market volume in the EU-27 (plus Norway,
Switzerland, Turkey, Russia and Ukraine) reached around
158.9 million window units in 2007. This figure increased
by 2.7 million units in 2008 to 161.6 million. PVC
windows accounted for by far the largest share in 2008 at
approximately 93.6 million window units. This compares
to 35.7 million units in aluminium, 27.5 million units in
wood, and 4.8 million units combining wood and
aluminium.
The full report, which covers the EU-27 together with
Norway, Switzerland, Russia, Ukraine and Turkey, can be
purchased from VFF, vff@window.de, www.window.de
Construction in Europe
The latest Europe-wide construction forecasts for 2009
through to 2011 were issued in advance of the 68th
Euroconstruct Conference organised by KOF Swiss
Economic Institute on 26每27 November 2009 in Zurich.
These forecasts indicate that 2009 was the worst year for
the construction market in the 19 countries of the
Euroconstruct area for more than ten years. Construction
output fell by 8.4%, a significantly larger contraction than
seen elsewhere in the economy (overall GDP is expected
to have fallen by around 4% throughout the Euroconstruct
area).
The total construction output of the Euroconstruct member
countries is expected to amount to €1,365 billion in 2009
and to account for 11% of the area's GDP.
For 2010, Euroconstruct expect another, albeit smaller,
decline in construction activity of 2.2%. Recovery is not
now expected until 2011 and growth is unlikely reach a
level comparable to that before the recession until at least
2012.
With the exception of Switzerland (3.3%) and Poland
(5.3%), all other countries experienced negative growth in
construction output in 2009. The greatest declines were
reported in Spain (21.5%) and Ireland (32.2%).
Construction output has also declined very strongly in
Finland and the United Kingdom: by 14.2% and 12.6%,
respectively. Portugal, Slovakia and Italy also performed
poorly, with construction output declining more sharply
than the Euroconstruct average.
The explanation for the downturn is to be found in the
huge drop in new residential construction (22.5%), as well
as in the sharp decline in new non-residential construction
(12.7%), a segment which was still growing in 2008. Civil
engineering is the only market segment which did not
decline in 2009.
Overall construction output is not expected to decline
much further after the downturn in 2009, but will remain
stagnant across much of the continent until 2012. However
new residential construction and new non-residential
construction segments are expected to continue their
downturn in 2010 and 2011.
To counteract the economic downturn, several countries
launched fiscal stimulus packages of various sizes in 2009,
some of which targeted the construction sector. But the
phasing out of these stimulus packages together with
required consolidation of public finances is expected to
negatively impact public sector construction in the coming
years.
The construction sectors in Poland, Slovakia and Sweden
are expected to have the strongest growth rates in 2010
and 2011.
Encouraging signs at Cologne furniture fair
Germany is a key player in the international furniture
sector, both as an exporter, a sales target and as a trend
setter.
Only one country in the world imports more furniture than
Germany 每 the USA. In 2008, the United States imported
furniture with a total value of around 16.3 billion euros.
Germany＊s import volume was around half that figure at
7.8 billion euros.
Germany is also the world＊s fourth largest furniture
manufacturer (after China, US, and Italy) with annual
production estimated at around US$24.5 billion in 2008 by
the CSIL furniture research organisation in Milan.
For almost 60 years now, a key date in the German
furniture industry calendar has been the international
furniture fair imm cologne. Every January, manufacturers
and dealers from all over the world gather for a few days
in Cologne, Germany and this fair influences prospects in
the EU furniture sector for the year.
To the relief of many in the industry, the 2010 imm
cologne show was more dynamic than many expected
given the economic situation. Despite being shortened by a
day, the fair managed to equal the previous year's result
with around 100,000 visitors.
The number of exhibitors also marginally exceeded last
year's level, rising around 1% to 1,053 companies. There
was strong growth (7%) in the number of domestic firms
taking part. Although the numbers of foreign companies
were down, these still accounted for 58% of all exhibitors.
The positive fair results are a boost to an industry that
struggled badly in 2009. According to figures issued by
VDM, the German furniture industry association, sales
generated by the industry fell by 12.7% to €12.75 billion
in the year to end October 2009. Office and shop furniture
sales declined more dramatically (-17%) than home
furniture (-12.1%) and kitchen furniture (-10.6%).
The figures in 2009 come after a positive year in 2008
when German furniture producers ended the year with
growth of 1.6%. Although there was a slight decline in
German domestic furniture sales in 2008, this was more
than offset by export growth of 4.3 percent as compared to
the previous year.
It should also be noted that while German furniture
manufacturers were in the doldrums last year, Germany＊s
furniture retailers were in more buoyant mood. Despite the
downturn, the country＊s three largest furniture retailers 每
Ikea, Hoffner, and XXXLutz 每 were all expanding their
sales area in Germany during 2009.
In a recent interview, Hans Strothoff, President of the
Federal Association of the German Furniture, Kitchen and
Furnishings Industry (Bundesverband der deutschen
Möbelindustrie, BVDM) suggested that German furniture
retailers have seen the recession as an opportunity to
exploit consumer＊s need for greater comfort and security
in their own homes:
※In times like these certainty is a rare thing, so it＊s hardly
surprising that people＊s homes are becoming increasingly
important to them. Retailers are sensing this 每 which is
why they would be wise to ensure their range and services
are consistent with this trend.§
Some other key industry trends identified by the imm
cologne organisers during the show include:
• increasing use of dark wood, preferably
combined with glass and stainless steel.
• more ※green§ furniture with a strong
environmental message.
• introduction of large-format dining tables and
dining room armchairs that may be sat on
comfortably for a long time.
• the "kitchen - dining room - living area" as a
spatial unit, now joined by private spa oases in
which the bedroom and bathroom merge into a
single unit.
The next imm cologne will take place from 18th - 23rd
January 2011
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