Resilience in recession4 August 2012
The French timber sector faces its problems, but has held up well in the downturn, with UK business proving particularly resilient. French Timber director Jean-François Guilbert reports
The health of the French timber industry varies from one segment to another, and there are key issues the industry needs to address for the long term. But despite the general economic situation in Europe, France is still enjoying a solid market for its wood products.
The country's construction timber market remains the second biggest in Europe after Germany. Even though the overall building sector has been on a downward curve this year, wood has continued to gain market share against rival materials, such as masonry and steel.
Building single-family houses in timber frame, post and beam and other wood-based construction systems continues to thrive, but a more advanced, technological sector is also emerging. Glulam and cross-laminated timber, especially, are being used on a larger scale and in more demanding applications. In particular, construction systems using these and other engineered products are increasing market share in multi-dwelling residential developments and public buildings, notably schools.
The second major user of softwood in France is packaging and this has very much reflected the general health of wider French industry and commerce. In the first half demand was stable, but recently business has deteriorated, with customers cutting stock to minimum levels.
The upper end market for oak joinery and manufacturing products is more buoyant, with demand holding up from the furniture and interior fittings market in France and the rest of Europe. By contrast, there has been very poor demand for lower grade applications, such as railway sleepers and rustic flooring.
Demand for French beech, meanwhile, remains strong. Low log prices make it one of the most competitive European hardwoods and the species is being used to substitute tropical hardwoods, notably in stair production. And exports to North Africa and Asia are on the up.
Overall, French sawmillers report a satisfactory workload this year, albeit that turnover is a little lower than in 2011. Making life more demanding, however, is the tendency for customers to buy smaller amounts on faster turnaround times, with little forward ordering.
Another challenge is a problem afflicting most of Europe - a reduction in credit availability, with companies having to supply customers with inadequate or no cover. To maintain business levels sawmills are having to accept the risk of customers defaulting with no financial back-up.
Another concern is a dramatic increase in log exports outside Europe, notably to Asia, and China in particular. Originally a hardwood issue, this has started to affect softwood.
Discussions on this topic are under way on a national and European level to find ways to help the timber industry retain its raw material and compete on a level playing field with foreign producers who have lower labour costs, low taxes and are often duty-protected.