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News From Europe

Insolvencies in European hardwood industry

The unfavorable situation on the international markets for temperate hardwood logs and sawn hardwoods has resulted in a high number of insolvencies in the European hardwood sawmilling industry. This development is reported as mainly the result of the slump in prices for sawn beech and beech logs.

Within the industry those companies who, over the past years, concentrated on exports of beech to China and who had signed early contracts with forest owners for large quantities of logs at fixed prices have been hard hit.

The bankruptcy application filed by Westpfälzische Holzindustrie Hinterweidenthal (WPH) at end of August was one more example of the difficult situation faced by the German hardwood sawing industry. At WPH, it was mainly bad debts of around US$1mil. from business in China that had weakened the company's position. The indications are that a similar development is emerging in the French hardwood timber industry.

Danish parquet flooring for Marco Polo Airport

Marco Polo Airport, Venice, Italy, has ordered 10,000 sq. metres of massive parquet flooring for a new terminal from the Danish company Hørning Parket Fabrik. Among the reference clients of the Danish plant are Copenhagen Airport, Arlanda Airport (Stockholm) and Bergen Airport.

Danish Furniture to enter Sweden

Danish furniture producer Ilva A/S is to challenge the dominance of Swedish Ikea in Sweden. Ilva is to set up a store in Southern Sweden somewhere between Malmö and Helsingborg. The construction of the store is scheduled to start this autumn. Ilva is in the final stages of talks with a Swedish building contractor to set up a 15,000 sq m store at the cost of between DKr90mn (US$10.6mn) and DKr130mn.

Lutz on expansion course

The insolvent furniture chain Möbel Krügel of Stein near Nuremberg, Bavaria, will sell its main store in Stein to Austrian Lutz of Wels. The latter will also acquire the K-1 discount and the Hin-und-Mit furniture markets. Lutz already had taken over Krügel stores in Stuttgart and Kempten. The Austrian group, which is also running Möbel Neubert stores in Würzburg and Hirschaid, intends to increase its turnover generated on the German market from EUR 400mn (US$ 369.11mn) to more than EUR 500mn by 2010. Möbel Krügel's main furniture store in Stein is to be renamed XXX-Lutz, the discount market is to be operated under Möblix.

Ikea, a store in every major city

Swedish furniture chain Ikea, is planning the construction of a further 13 stores in Russia, one in every city with over a million inhabitants. The company currently has seven opened or planned in St Petersburg and Moscow. The cities in Ikea's sights include: Nizjnij Novgorod, Jekaterinburg, Samara, Novosibirsk, Krasnojarsk, Saratov, Omsk, Tjeljabinsk, Perm, Kazan, Ufa, Rostov-na-Donu and Volgograd. Ikea also plans to increase the proportion of furniture manufactured in Russia from a current 10% to a proposed 30%.

Timber floor market in 2001

The European Federation of the Parquet Industry (FEP) reports that timber floor sales in its long-term member countries have decreased by 1.2% to below 80 million m2 in 2001 and the production has decreased by 1.3% to 62.1 million m2. Output from new members of the organisation - Hungary, Poland and Romania - brought total production to 75.6 million m2, and consumption in non-FEP member countries in the EU and European Free Trade Association pushed total sales to 95 million m2. The European wide annual growth in consumption was 4.4%, and timber had a 5.1% share of the total floorcoverings market. The organisation expects the demand to remain at the same level in 2002.

Nearly 80% of furniture exported

According to the Romanian Association of Furniture Manufacturers (APMR) the country's furniture exports in 2001 totalled US$ 500mil., accounting for 78% of total furniture production, while export growth of around 5% is expected for 2002. The domestic furniture market, meanwhile, was worth US$ 224mil. in 2001, slightly down on the 2000 level of US$ 235mil., with imports accounting for about a third of the market. Imports are forecast to drop in the future as local manufacturers improve quality and variety, while overall production is expected to increase by around 75% by 2010, by which time exports will be worth US$ 800mn. There are currently 2,900 furniture factories in Romania but this is expected to decrease in the future as a result of consolidation in the industry.

Source:Itto  & Europe Timber

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