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Wood Market News Around Europe


Company News From Around Europe

Furniture Exports Stable

The value of Finland's total furniture exports remained almost unchanged in the first half of 2002 compared to the same period in 2001. Exports of office furniture declined by 20%, compared with the first half of 2001. Exports of kitchen furniture also decreased, while exports of home furniture increased by a couple of percentage points. The most important export markets were Sweden, the UK and Russia. Exports to Norway increased the most.

Forte Improves results

Forte, the Polish producer and distributor of furniture, reported a net profit of US$ 1.87mil. in the third quarter of 2002 compared to a net loss a year ago. The company's turnover rose 19%, while its operating profit grew four times.

Drop in Turnover for German Giant

Germany's number one office furniture brand producer Konig + Neurath AG of Karben is expecting turnover to decrease by at least 10% in 2002, from US$ 208.99mil. in 2001. Competitors forecast their turnover volumes to decrease by an average 20%. To-date, the office furniture producer has never made a loss. Due to the crisis and in an effort to cut cost, König + Neurath has laid off 150 of 1,700 staff.

Ikea Scores High

Ikea Deutschland intends to increase its turnover by between 5% and 6% in the current fiscal period to end 31 August 2003. At present, Ikea runs 29 branches in Germany. In its last fiscal period 2001/2002 Ikea recorded 65,000 clients, up 7%. The turnover slightly decreased by 0.5% to US$ 2.11bil. This decrease reflects the weak propensity to consume as well as drops in sales due to the refurbishment of four large Ikea branches. However, Ikea outperforms the market: the German furniture trade sector expects revenue shortfalls of up to 15% in 2002.

In other news, retailer Ikea Italia has ended its 2002 financial year with turnover of US$ 0.54bil., an increase of 3.7% in real terms on the previous year. Italy is the fourth largest supply market to Ikea, with a total purchasing volume of US$ 359.82mil.. The number of stores is also set to increase from 7 to 23 in the next ten years.

Flexa Boosts Sales to Spain

Flexa Möbler A/S, a Danish producer of deal furniture for children and young people, has boosted its sales to Spain by 40% a year in the past two years and forecasts are for a two-digit growth in the future. The difficulty to enter the Spanish market was due to three reasons; first, relatively weak purchasing power, low birthrates and the fact that the Spanish do not have a tradition for do-it-yourself furniture.

New Stores for Roche Bobois

France's leading supplier of top-of-the-range furniture, Roche Bobois, is to establish a fourth chain of stores, Natuzzi Store. This venture is designed to be a 'lifestyle brand' with appeal to younger, more modern customers living in urban areas. The launch budget is EUR 5mil..

Report From Holland

The quiet spell that has a grip on the timber market in Holland, and which is certainly noticeable in the tropical hardwood-sector, continued during the second half of November. There were no significant changes at all compared with the first half of this month and analysts report that it is very unlikely that any changes will take place during the remaining weeks of the year. The market is too quiet and being so close to the Christmas holidays a revival is unlikely.

Pessimistic sounds heard in the Dutch market suggest that the market will stay quiet for at least another 5 to 6 months. This negative sentiment is fed by the fact that during winter building activity is always lower. Many of the bigger joinery firms do not have much work and do not foresee a sudden change.

The building sector has really stagnated unfortunately (social unease the long strike earlier this year; too much red tape and piles of paperwork and a skilled labour shortage) as a result, timber consumption has declined all round. Not only are hardwoods or tropical hardwoods in particular affected, sales of softwoods have also suffered.

Traders are finding it very difficult to place orders and it is a difficult market for Meranti and Merbau and the recession is having a psychological impact on the purchasing patterns of retailers and end-users. If the market buoyant there is 'a relaxed buying' attitude. Under these conditions it is easier to sell something extra during a negotiation and the trading partners overseas dare to put some forward positions in the pipeline feeling confident that business will come. However when the market is bad and there are not so many orders around it is as if a switch is pulled.

At the moment there are hardly any orders being placed with shippers because stocks have to come down first. What buying there is mostly on a selective hand-to-mouth basis.

A symptom of a weak market and few sales of Meranti and Merbau is the so-called 'price boxing' or the exports of sawnwood parcels at very low prices, generally considered below cost even and commonly below the replacement value. This practice often leads ultimately to further reduced buying and even greater market weakness.

The Dutch buyers logic under these conditions becomes one of postponing their timber-purchases because, perhaps next week, prices will go down again so only that what is really needed to satisfy a customer or keep the factory running is imported. The consequence is that prices spiral down as this leads again to further low priced exports. When one shipper starts with the price cuts others will follow.

When taking the current CNF Rotterdam-price for 3x5" KD Bukit PHND and converting this into a price in euro with a normal margin, a level of around euro 700 per cubic metre is arrived at. Currently analysts observe considerably lower sales prices in Holland and not even for a full Bill of Lading of say 15-16 cubic metres but for perhaps half a bundle.

This presents a very difficult situation for exporters and there are not many offers circulating and some items remain even scarce. Kiln dried Dark Red Meranti (Seraya/Nemesu) in non-PHND is reportedly difficult to get and if available it is at extremely firm price levels.

Prices for non PHND Seraya 3" scantlings are far above USD 900 per ton CNF Rotterdam. Prices for Nemesu in 2.1/2" scantlings hovers between USD 940-960 per ton, almost as high as ever seen even during the peak-years. Unfortunately analysts report a sudden improvement in the CNF price is not expected soon.

Over the next few weeks Dutch traders are anticipating a slow down in activity in Malaysia because it is the monsoon season and logs are in short supply, also, it is Ramadan. In early February the Chinese New year holidays begin so the situation in Malaysia seems not seem ripe for more of the price cutting seen during November, yet the traders in Holland are very "trigger happy" and are prepared to do much just to get an order sealed. It is a buyers' market at the moment and the exporters seem stuck with this for a while.


CNF Rotterdam per ton of 50 cu ft
Malaysian DRM Bukit
KD Sel.Bet PHND in 3x5" USD 910
Indonesian DRM Bukit
KD Sel.Bet PHND in 3x5" USD 890
Malaysian DRM Seraya
KD Sel.Bet PHND in 3x5" USD 930-940
Indonesian DRM Seraya
KD Sel.Bet PHND in 3x5" USD 905/910
Merbau KD
Sel.Bet Sapfree in 3x5" USD 910-920

All based on container shipment at US$1700 per G.P. box,40ft.


The Keurhout Foundation according to trade news sources has modifiedits procedures to make it better able to be an independent verifier of certificates for sustainably produced timber for the Dutch market.
The new version of the Keurhout procedures, which will be submitted to international experts for comment, can be downloaded from www.keurhout@stichtingkeurhout.nl.

The foundation, set up by the Dutch government to see as much certified timber from sustainable sources as possible on the market as fast as possible and Keurhout is reported as saying that the Pan European Forest Certification, Forest Stewardship Council and Canadian CSA certification schemes are the most important for the Dutch market.

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