To post your company news

Europe Wood Market Report

¡¾Jan.12, 2002¡¿

According to a recent Kolner EuroHandelsinstituts and Zentralverband Gewerblicher Verbundgruppen research report, furniture sales in Germany amounted to 68.9 DM billion in year 2000, registering a 3,6 growth compared to the previous year.

The organized furniture retailers accounts for 63% of total sales, whereas independent furniture retailers accounts for 12,3% (the last ones accounted for 10,7% in year 1999)

The creditors of Eschebach Kuchenmobel GmbH, the east German Radeberg-based kitchen manufacturer, have approved a deal that secures 81 of the 94 jobs. The company, which made a loss of DM 9.8mn in 2000, says that problems were due to management failure, a fall in demand and the increase in personnel and material costs. However, by 2003, Eschebach aims to make a profit of DM 1.1mn.

IKEA announced it will invest DM 54mn to expand the size of its outlet in Cologne-Godorf from 3,500 square metres to 16,000 square metres. The IKEA manager Kurt Kruuter also announced it will build another market in Koblenz within four years in order to meet demand south of Cologne and in Rhineland Palatine.

Other News from Europe

On January 1, the euro, the single currency of 12 of the EU member states, will be available and usable in the form of notes and coins after three years as only a financial instrument.

From e-day onwards, seven notes with face values of between 5 and 500 will be the means of exchange from Lapland, north of the Arctic circle in Finland, to the Spanish Canary Islands off the coast of Africa.

Except in Britain, Sweden and Denmark, which are outside the euro-zone, the EU's national currencies will disappear quickly. By January 1, more than 14 billion euro notes will be ready in banks, retail outlets and automatic teller machines for distribution to the public. Altogether, 56 billion coins are destined for circulation.

With this change twelve countries are shedding part of their history and identity. The French franc dates back to the middle ages. A Greek drachma existed in the sixth century before Christ. The D-Mark, launched in 1948, became the symbol of Germany's success and reintegration into the international community after the second world war.

The sharp fall in the value of the euro against the dollar from $1.18 at launch to US$0.8870 last week has provoked much adverse comment. TheEuropean Central bank has kept inflation under control, although it has been criticised for a weak communications policy.

The euro's backers hope that next week's replacement of national currencies will spur competition further and keep hold down inflation by easing cross-border comparisons of costs and prices.

However, a single monetary policy for such a diverse economic area has exposed structural weaknesses in Germany, the biggest euro-zone economy, without yet putting sufficient pressure on Berlin to rectify the underlying causes of its slow growth and high unemployment. Germany's budget deficit will come dangerously close to breaking the 3 per cent of GDP ceiling of the stability and growth pact next year.

Fast-growing peripheral economies such as Ireland and Portugal have faced inflationary pressures, although these have been mitigated by this year's global slowdown and the economic after-effects of the September 11 terrorist attacks.

Much hope for the future hinges on whether euro-zone growth in 2002 can recover in line with the hopes of the European Commission and other forecasters.

Economic recovery and rising employment would help cement the single currency in the affections of its citizens, could pave the way for more political integration and even encourage adoption of the euro by the UK, Sweden and Denmark.

Spanish Furniture

The Spanish furniture sector has forecast turnover of some EUR 8,414mn for 2001, representing a growth of 1.6% on year 2000. Forecasts are for a 2% increase in 2002, according to statistics given by the Furniture Market Observatory during a national furniture congress on 28 November 2001.

Ikea Continues Expansion

Ikea's is opening a second Moscow store in two weeks. The company has plans for 16 more in the country. The new store cost some US$47mn, as mush as the initial outlet in Chimki, which, in one year, has already attracted 5million customers. A third, futuristic, store is to be completed in two years. In total there will be six store in Moscow, two in St.Petersburg and 10 across the country in addition to several furniture factories and, according to head Lennart Dahlgren, Russia will become one of the most important countries.

Company News

Paloheimo of Finland has signed a letter of intent (the agreement is expected by the end of January 2002) on selling its parquet operations in Finland. The buyer candidate is a Finnish consortium which intends to establish a new company to continue parquet production at the RiihimUki unit. If the operations cannot be sold production will end by spring 2002, consequently all the 20 Paloheimo Parquet employees will be made redundant.

West African Log Prices in UK

UK Sawnwood Prices

Plywood and MDF in the UK

For more information on the trends in the UK market please see www.worldwidewood.com