Wood Market Reports From Europe
‐2002.03.18／

EU to ban wood preservative

The EU Commission currently considering a ban on arsenic based wood preservatives. After considering public comment on the issue the Commission will draft a guideline prohibiting the sale of wood treated with arsenic based preservatives and for limiting its use to a strictly limited number of industrial applications. In giving reasons for this ban the EU Commission referred to health and environmental risks arising from the use and the disposal of arsenic-treated wood.

Arsenic compounds in wood preservatives consist mainly of chromated copper arsenate salts (CCA mixtures). These preservatives are used all over the world mainly for timber products for outdoor use, as well as for carcassing. According to the Commission, between 1989 and 1996 the market for arsenic-treated wood in the EU fell by about 50% to about 11,000 ton/year. However, throughout the EU some 700 woodworking companies apparently are still making use of these compounds.

News from the UK

UK retail sales fell in January for the second month running prompting fears that the consumer boom may be over. The statistics fly in the face of retailer's anecdotal reports, who are trying to talk spending along. If this trend continues the threat of interest hikes could recede. The reason for the decline is reported to be increasing prices, and this applies to the timber sector also. In recent press reports of the 50 most undervalued companies quoted on the UK stock market 16 are involved in building and the sale of building materials, not a good sign for the trade in timber.

Inflation in the UK rose sharply last month form 1.9% to 2.6%

News from Other European Countries

Swiss furniture exports decline

During the first nine months of 2001, Swiss furniture exports dropped by 8.3% to SFr 777.68mn. Head of the Swiss furniture committee (SEM), Helmut Hillen, believes that quality and aesthetics, rather than price reductions and discounts, will bring the industry back to life.

The SEM production index sank to 92.13 points by October 2001. Table and chair manufacturing was the only area to do well with the index for receipt of orders climbing to 101.74 points and for exports climbing to 112.35 points.

Increased exports of machines

Both Germany and Austria are important export countries for Czech woodworking machines, with machines to the value of Kc 414mn having been exported to Germany in 2000 and Kc 77mn to Austria.

The total value of exports of such machinery was Kc 934mn with exports to Slovakia accounting for Kc71mn. Cut timber airing machine exports developed most successfully with an increase to Kc 218mn in 2000 from Kc 127mn in 1999.

Furniture demand decrease

Whilst Austrian furniture companies are trying to combat the poor inland furniture trade through increased exports, some companies in Upper Austria have had to close down. The downturn in the economy is being felt by the furniture industry, with cheap imports from Eastern Europe, especially seating, creating additional problems.

The managing director of the Austrian furniture manufacturer Team 7 believes that the industry will benefit in the long run, but that people are spending less money, not least due to 11 September 2001.
New Ikea store

The regional government of Catalonia has authorized Ikea to open its second establishment in Barcelona, exactly with an investment of EUR 33.54mn. The authorization is subjected to the acceptation of Ikea of the conditions imposed by the regional government (17,950m2 outlet and the construction of more access ways to the area).

Retailing in Naples region

Ikea, Leroy Merlin, Ipercoop, Dixons and Conforama, comprise the first wave of non- food related retailers, which are set to set up in a huge shopping complex in Afragola, the largest in Italy and indeed in Europe. Investment will run to EUR 120mil. in the project, employing about 800 people. A potential further investments worth EUR50mn is also planned. By 2003, Ikea is planning to invest about EUR 44mn, employing a staff of more than 500, aiming for a turnover of EUR 100mil, at what will be the largest centre to the South of Rome. Conforama will build a12,000 square metre shopping centre, investing EUR 35mil.

Requesting lower export duties

The Polish Chamber of Furniture Producers has requested the government to offer more favourable export duties. Current rates amount to 20% of the product value but not less than EUR 0.7 per kilo of the exported unit. In effect, furniture exporters have to pay on average 80-100% duty, which significantly raises the price of their products in the Russian market. Current rates are valid to June2002. If the Polish government negotiates lower export duties, prices of Polish furniture exported to Russia will fall by around 20%.


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