timbernewsA magazine for SCAs solid wood products customers | www.scatimber.com

42010

Timber imports grow in dynamic marketsSCA starts sales company in China Shipping has wind in its sails

With one leg in a dynamic marketA pallet and a business is more stable if it stands on several legs.

timber newsKhaled Hashem, Mohammed Ziad Hashem and Eyad Hashem from Saudi Arabian solid wood products company Basheer Hashem Sons Co. The company has been a customer of UniRets-Scantim for many years. Photo: Mats Wigardt

F

Outlook bright for Saudi timber imports Strong growth the target for new MD Global trade reliant on shipping Dynamic growth in Chinese construction market New sales company in China SCA Skogs forest environmental work given clean bill of health Too high production in relation to consumption = worried customers Bark and birch sap in award-winning breadTimberNews SCA Forest Products ABSE-851 88 Sundsvall, tel +46 60 19 30 00 www.scatimber.com

3 6 6 8 9

or many years, SCA Timber has suc ceeded in developing tailormade product and business solutions for the solid wood industry, and product and dis tribution solutions for the builders mer chant sector. When you work with a raw material that has such widely varying characteris tics as a timber, there are limits to how far product specialisation can go. Not all products can be customised, and some just disappear altogether after the decision is taken to make other products, because we want to use this valuable resource of ours in the best way possible. In addition, the market and demand for solid wood products for what is an almost endless number of applications is enor mous, and is a sphere where traditional quality sorting is the only specialisation necessary.

consumption in North Africa and the Middle East experienced growth.

Increased specialisation and the offeringof evermore sophisticated product and building solutions for the most developed markets can be combined with the sale of more traditional solid wood products in dynamic, but in many respects, still much less developed markets. However, dont believe for one second that you can simply treat these markets as an afterthought. They have stringent demands in terms of product quality and service, even if those demands differ from those of the builders merchant sector and industry in Western Europe and North America. You have to possess market insight, customer focus, a serviceminded approach and employ a long term strategy. Those who take the dynamic solid wood product markets in the south and east seriously will have a steady leg to stand on when the economic climate in the west turns harsh.Anders Marklund, MD, Uni4 Marketing

Some of these markets are very dynamic.Uni4 specialises in solid wood products for North Africa and the Middle East. This is a region where population and prosperity trends have seen a massive upsurge in con struction activity, and demand for solid wood products is increasing all the time. Another dynamic region is China, where a rapidly growing middle class is crying out for houses, furniture and much, much more. Of course, when it comes to China, the figures go through the roof. A modest increase in demand for wood pan elling or kitchen tables can translate into massive volumes. In addition, these markets demonstrate behaviour that diverges from our tradi tional markets. Whilst the West was afflicted by the recent financial crisis and its construction industry went into melt down, building and solid wood product

10

11 12

Anders Marklund.

Photo: Mats Wigardt

Timber News is published four times a year Editor-in-chief Bjrn Lyngfelt Production Fryklunds Repro & printing Tryckeribolaget Subscribe to Timber News, please contact ingrid.lofqvist@sca.com Feel free to quote us, but please name us as your source.

SCA TIMBER is one of Europes leading manufacturers of wood-based products, with an annual production of 2.1 million cubic metres. The product range is supplemented with service and distribution solutions for customers in the wood industry and builders merchant sector. SCA Timber is part of SCAs Forest Products business area, which produces publication papers for newspapers,magazines and catalogues, pulp and forest-based biofuels. SCA Forest Products also manages SCAs extensive forest holdings, supplies SCAs Swedish industries with wood raw materials and offers cost-efcient transport solutions to SCAs units.

timber news | 2

Outlook bright for Saudi timber importsSaudi Arabia may possess 25 percent of the worlds oil reserves, but it has no forest to speak of. Consequently, when the country wants to augment its infrastructure with new houses, schools and hospitals, it has to import large volumes of sawn timber, including timber from Sweden.Drawings shown to us by engineer Mazen Kassas from construction firm Saudiexpo, provides an overview of the new district that looks like a futur istic dream taken straight from a sci ence fiction movie. Everything has to be complete by the end of next year, says Kassas. No excuses for any delays will be accepted. To pull off this massive project, some 60,000 guest workers are work ing almost 24 hours a day. The project is being financed by the Saudi govern ment to the tune of around SEK 70 billion. countrys investment in infrastructure will reach a dizzying USD 1,000 bil lion. Despite the global financial crisis, economic activity in Saudi Arabia has continued to expand. It is now easily the biggest economy in the Middle East, with a budget volume three times that of the United Arab Emir ates, which finds itself in second posi tion in the economic stakes.

A

building site on the outskirts of the Saudi capital Riyadh is cur rently being transformed into the King Abdullah Financial District. A veritable army of cranes adorn the blue skyline, trucks kick up dust and thousands of building workers sweat under the hot sun. Its a massive building project in which architects from around the world are playing their part to get the desert to bloom. In this dry and stony landscape, some 40 or so new skyscrapers are being built that will eventually house banks, insurance companies and resi dences. Alongside these, parks, roads, shops, schools and hotels are also being built.

To meet the need for new in frastructure in the country, large quanti ties of building materials are required, including sawn timber, which is used for applications such as casting moulds, scaffolding, carpentry and furniture. This demand has significantly increased timber import volumes, which are now set to exceed 1 million cubic metres, from countries such as Chile, New Zealand, Romania and Canada, not to mention Sweden, which alone exports 300,000 m3 of timber per year to Saudi Arabia.

Similar building projects are underway throughout Saudi Arabia. With a population mostly under the age of 25, the need for new homes, schools and hospitals is enormous. In the cap ital alone, 30,000 new apartments are being built every year. By 2014, more than a million new homes will have been built throughout the country. Thanks to its enormous oil assets, which amount to 25 percent of global oil reserves, Saudi Arabia has under gone rapid development. Over the next 15 years, it is estimated that the

Sales company Uni4 Marketing,which is jointly owned by SCA, Holmen, Sdra, Martinsson and

3 | timber news

It is also important to establish long lasting relationships, gain knowledge about Arabic business culture and be able to deliver high quality products.VIDA Wood, has been active in North Africa and the Middle East for many years. Through Beirutbased sales orga nisation UniRetsScantim, the annual volume of timber sold to Saudi Arabia by Uni4 has increased from 5,000 m3 in 1992, to in excess of 100,000 m3 today. We undoubtedly have the strong est customers on the Saudi market, says CarlHenrik Sandstrm, Senior Consultant at Uni4. For the past year, weve been the single biggest supplier of pine timber to Saudi Arabia. Pierrot Dirani, MD of UniRets Scantim, believes that the strong organisation and the large volumes of sawn timber that the four owners of Uni4 represent is a key reason for the increasingly regular shipments of timber going into the port of Jeddah. Customers want to feel secure, he explains. Its also important to develop longlasting relationships, have knowledge of Arabic business prac tices and deliver high quality prod ucts, sums up Dirani.

The wide boulevards of the portcity of Jeddah are awash with new, airconditioned cars. With petrol prices at around SEK 1.40/litre, traffic in the city is frequently bumper to bumper, pungent exhaust fumes mixing with the humid heat. On the outskirts of the city, the desert provides a constant reminder of its presence, leaving a thin layer of dust over everything. Trucks thunder out from the gates of the port, Jeddah Islamic Port, carrying timber to the timber yards along the Mecca Road. It is here that many of the major importers of sawn timber have their warehouses, including Mokbel Al Khalaf, International Timber, Sattra National Timber and Al Fozan, all of whom also have branches throughout the country.

Over a cup of sweet tea or carda momspiced coffee, and snacking on dates, we meet up with a number of

site managers and procurement agents. Pierrot Dirani is engaging in an intense discussion about prices, lengths and qualities. Occasionally, voices are raised and arguments ensue, with people waving their arms and documents to make their point, only for, in the best cases, everyone to agree and finish by saying Inshallah if it is Gods will. Everyone paints the same picture the Saudi timber market has been good for a long time, with lots of major construction projects swallow ing up huge volumes of material. However, there is also agreement that the back end of 2010 will be tough, with wellstocked timber yards and increased price pressures as a result. The first six months of the year were good, but then the summer holidays coincided with Ramadan, explains sales manager Khaldoun Haddara of Mokbel Al Khalaf. And

timber news | 4

now its time for the Hadj, the annual pilgrimage to Mecca, when everything grinds to a halt. But, he adds quickly, we arent worried. The falloff will only be tem porary. Everyone believes that the market will return to normal next year.

Even Anders Marklund, former salesmanager at SCA Timber and currently MD at Uni4, believes that 2011 will be at least as good as previous years. By continuing to focus on cus tomer care and by offering attractive specifications, I believe that Uni4 will secure an increased market share. Were aiming to sell 125,000 m3 for 2011, most of which will be pine.

You could easily mistake the capitalof Saudi Arabia, Riyadh, for being a city taken straight from the pages of a fairytale, particularly at night when all the newly built government struc tures, fantastic viewing towers, glass faced banking palaces and designer hotels are lit up by spotlights and multicoloured lamps. Riyadh is home to the countrys 86yearold monarch King Abdullah, who lives there in one of his many palaces. The entire Saudi royal family, with its 6,000 princes, lives in the city, which will also be the site of Princess Noura University, set to be the first

institute of higher education in the country specifically for women, with places for 26,000 students. Riyadh also plays host to the head offices of the major timber importers. Most of these are part of a larger cor porate group that has many different areas of operation. A substantial number of these companies are owned by the big, powerful and wealthy families that hold significant sway in Saudi Arabia. Basheer Hashem Sons Co also has its offices in the city. In 1954, it became the first timber importer oper ating in the Saudi Arabia. Pierrot Dirani has collaborated with the com pany for the past 32 years. When our father started the busi ness, customers had to queue for hours simply to buy a board, says Mohammed Ziad Hashem.

Every time we enter one of thebrightly lit, airconditioned offices, the procedure is the same. We are wel comed and shown into a conference room where water, tea and coffee are served, along with dates, which appear to be something of a manda tory snack. Soon, the laptops and fold ers come out, mobile phones start to ring at increasingly uncontrolled inter vals, the pitch in the room becomes higher, the gestures more pronounced. Time passes. Soon, English becomes

insufficient. Dirani and our guests switch over to speaking Arabic. Finally, a general feeling of relaxation kicks in and a sumptuous lunch is often offered as a way of concluding the meeting. It only takes one word to be mis understood for the whole thing to come crashing down like a house of cards, says Dirani. Its like a tennis match, where both parties must have access to a racket in order to be able to play each other. But out in the small carpentry workshops on the outskirts of Riyadh, where a large proportion of the timber imported from Sweden is transformed into furniture, windows, doors and door frames destined to satisfy the needs of a growing population, it is price and quality that are the deciding factors when choosing which raw materials to buy. And the fact that it is sawn in lengths that minimise wastage, sum marises Dirani.Text and photographs: Mats Wigardt

Facts Saudi Arabia:Population: 28 million, including approx. 6 million guestworkers

Head of State: Kung Abdullah bin Abdul Aziz Al Saud Constitution: Absolute monarchy Economy: Saudi Arabia is the biggest economy in the Middle East and is the only Arabic country that is a member of the G-20. The country is Swedens most important trading partner in the Middle East, with exports totalling around SEK 10 billion. IKEA, H&M, Volvo Trucks and Tetra Pak all have a presence. Other: To conclude successful timber deals you must havea long-term approach, provide regular deliveries and demonstrate a consistent level of quality. Patience is a virtue the approach here is very much that everything will be alright in the end, Inshallah, if it is Gods will. In 2009, SCA Timber sold around 11,000 m3 sawn timber to Saudi Arabia. In total, SCA sold 192,000 m3 to countries in North Africa and the Middle East during 2009. The biggest single market in the region was Egypt, which took delivery of almost 100,000 m3.

5 | timber news

Strong growth the target foThe North African and Middle Eastern markets have become increasingly important for the Swedish sawmill industry. Sales company Uni4 Marketing acts as sales channel for just over 500,000 cubic metres of timber on behalf of its owners. The companys new MD is Anders Marklund. Our aim is continued strong growth, he summarises.Sandstrms successor, Anders Marklund, also sees major future opportunities. Its a unique company, he says. We have established and long lasting contacts at individual level, we are good at logistics and document flow processes and we know the business culture. Marklund took over as MD of Uni4 Mar keting on 1 October this year. He comes originally from Vnnsby, just outside Ume. He joined SCA Timber in 1990, occupying the roles of Assistant Marketing Manager and later Sales Manager for the Scandinavian market region. I had a really enjoyable time, during which we experienced positive growth and succeeded in selling huge vol umes of timber, he says.

W

ith efficient logistics solutions, good product knowledge, well-backed owners and insight into the needs of the market, in the space of 20 years, Uni4 Marketing has managed to achieve an exceptionally strong position as a supplier of sawn solid wood products to several countries in North Africa and the Middle East. In recent years, volume growth has also been very strong. Between 2007 and 2010, sold volumes increased from just over 200,000 m3 to around 550,000 m3. The vision for three years time is to have increased the companys market share and to have a supplied volume that is closer to 800,000 m3.

Carl-Henrik Sandstrm, Senior Advisor atUni4 Marketing, has identified several fac

tors that will enable continued growth: increased pine felling in southern Sweden, Sdras expansion of its Vr sawmill and operations starting at Holmens new saw mill in Braviken. In addition, he adds, we hope to increase the proportion of external suppliers we use. Add to this the fact that the population in countries such as Egypt, Algeria, Saudi Arabia and Tunisia are all very young. In Egypt alone, a new child is born every 20 seconds. This means that there is a massive need for new housing, something which has seen imports of solid wood products double in just a short space of time. This, combined with the stagnation of the European solid wood products market, undeniably gives Uni4 Marketing a reason for optimism for the future.

According to Marklund, part of the recipefor success is to have good knowledge of the range of products available and to be able to generate confidence and cultivate relationships with customers. Knowledge and customer care oil the machinery and form the basis for all sales. But its essential that you have a good team behind you, he says.

Global trade reliant on shipping

I

Photo: Mats Wigardt

Around 85 percent of Swedens trade with the world is shipped by boat, including sawn products from SCA sawmills, which are sent to ports throughout globe. According to Magnus Svensson, CEO of SCA-owned Transforest, after the economic fluctuations of the first decade of the 21st century, we are now beginning to see a cautious rise in shipping prices.

nternational shipping has experienced significant growth, particularly during the last decade. Since 1980, year on year growth in the sector has averaged at around 3.1 percent. Further industrialisation, increased rates of globalisation and an ever-increasing demand for consumables have contributed to more and larger ships being built, allow ing greater volumes of goods to be trans ported on the worlds around 50,000 reg istered merchant vessels. Through the last decade, until Q2 2008, we saw a growth in the merchant fleet that has no historical parallel, says Sven sson.

China and, to a certain extent, India havebeen the driving forces behind this trend. From all corners of the globe, raw materi als have been shipped to Asia to be turned into consumables.

timber news | 6

or new MDMarklund seems to have picked up on SCAs tradition of having several more activities on the go with priority customers than our competitors do, and that SCAs sales staff are more decisive than their col leagues at other companies. Its created a good sense of self-confi dence within the sales team, he believes. But now SCA is history for Marklund. Or, to put it more accurately, his contact with SCA, which is one of the owners of Uni4 Marketing, will be more indirect in future.

SCA and the other companies behindUni4 Marketing Holmen, Sdra and Mar tinson guarantee stability and reliable access to large volumes of timber, creating a sense of security for customers. Swedens biggest privately owned saw mill group, Vida AB, is now also a share holder in Uni4 Marketing. This gives us access to a cost-effective sales organisation in the growing markets of North Africa and the Middle East, says Mns Johansson, CEO of Vida Wood. Top of Anders Marklunds agenda is to get to know the business at his new work place in more detail and to become part of

Anders Marklund, MD, Uni4 Marketing

Photo: Mats Wigardt

the team at Uni4 Marketing. This will involve paying visits to shareholders various saw mills, but he will also try to get to know cus tomers in their respective countries. We need more customers in Algeria who can buy pine grown in southern

Sweden, he says. And with Vida in the family, we now have access to significantly larger volumes of spruce.Mats Wigardt

The finished products are then shipped back to North America and Europe. The huge demand for sea freight has resulted in a lack of capacity, which in turn has caused dramatic price hikes and massive profits for everyone with access to spare tonnage.

Then came the crash. October 2008marked the end of the boom. The global economy ground to a halt and shipping prices fell to the levels of the 1990s. Since then, prices have slowly recovered. But it is China and India that have, almost single-handedly, got the wheels of the world economy turning. In Europe and the US, the brakes are still firmly on.

now being loaded in containers. The advantage with containers is that they are international, standardised and easy to load, says Svensson. And they pro tect the products they carry. In addition, container transports are effi cient, relatively inexpensive and can be loaded and sealed at the factory. In October 2010, around 10 percent of the worlds mer chant shipping was made up of container vessels, and this is expected to increase over the next few years.

shipping between Sundsvall and Rotterdam. In the opposite direction, the price for a container holding 20 tonnes of goods in October 2009 was comparable to a oneway economy class airline ticket on the same route. The shipping cost for a TV set from Asia to Europe was around SEK 70.

One way of keeping shipping prices uphas been to limit the manufacture of new containers. Many shipping lines also use a practice called slow-steaming, which quite simply involves reducing the speed of vessels, keeping demand up whilst reducing environmental impact. Although shipping prices are now climbing again, there is a considerable ques tion mark over next year, says Svensson. Were predicting a growth of around 10 percent per year, but the question is whether the increased tonnage will be matched by increased demand.Mats Wigardt

However, when consumption in the Westcontracts, global container traffic volumes decrease. In 2009, this resulted in a loss for companies totalling USD 200 billion. During 2008 and 2009, many containers stood empty in ports around Europe, putting pressure on prices for container traffic to Asia. The price of transporting products in a container between Rotterdam and Shanghai was, for a while at least, about on a par with

In recent years, the face of the merchantfleet has also changed. The number of bulk ships in service has reduced in rela tion to container traffic. More and more goods are being containerised in sealed 20, 40 or 45 foot load carriers. Even many bulk products, such as sawn timber, are

7 | timber news

Dynamic growth in Chinese construction marketChinas powerful economic growth is going hand in hand with sharply higher demand for wood products. However, domestic timber resources cannot by a long way satisfy the voracious wood and forest industry demand. In the first eight months of the year alone, Chinese timber imports climbed 23 percent.million apartments being built every year. However, the Chinese remain sceptical about using wood as a building material. Quite simply, they lack experience of mate rials other than concrete and steel for high buildings. Also, says Taylor, the Chinese have a lot of preconceived ideas about wood. Theyre afraid that buildings made of wood could start burning up or will blow away. that Chinas fibre deficit will total 150 mil lion cubic metres. However, the sharp increases in rates of export duty on Russian logs introduced in 2008 have led to lower deliveries of logs from Chinas northern neighbour, from 50 million cubic metres in 2007 to a mere 22 million cubic metres in 2010 to all markets, and from 27 million cubic metres to 15 million cubic metres in the case of China. In contrast, Russian exports of sawn timber products to China have risen sharply, but only enough to make up a small part of the log deficit. As a result, several other countries stepped in to meet the demand from the Chinese forest industry, including New Zealand, Australia, the USA, Canada and a number of countries in Africa. Demand from Chinese pulp mills for wood chips, too, has increased dramati cally. Chip imports have increased fivefold in just two years.

R

ussel Taylor is one of the worlds fore most analysts in the timber and saw mill industry, and since 1993 has been President of the International Wood Mar kets Group consultancy, based in Vancou ver, Canada. He recently visited SCA to report on the situation in the wood market, for example in China.

However, the Chinese wood industry isworking flat out. Today, the country is the worlds number one producer and exporter of plywood, furniture and fibre board. But an emerging Chinese middle class is also playing a part in driving the very fast growth in domestic consump tion of wood products. The Chinese wood industry consumes around 250 million cubic metres of wood raw materials annually (on a roundwood equivalent). Just over half of the demand for raw materials is met by the countrys own forests. The remainder, approximately 100 million cubic metres, is imported from other countries, making China the second biggest importer of fibre behind the USA.

The International Wood Markets Group, which operates worldwide, provides its clients with advanced market analysis. Taylor himself has many years of experi ence in areas connected with market strat egy, processing of and product development for wood products. His message, that the market potential for wood products in China is expanding rapidly with every year that passes, is hardly likely to come as any surprise. For example, the country is the biggest con struction market in the world, with ten

The gap between the countrys ability tosupply itself with raw materials and an everincreasing need for wood fibre is con tinuing to widen. In 2015, it is estimated

Having successfully established itself in the countries in North Africa and the Middle East, Swedish forest industry is now casting its eyes in the direction of the Chinese market. But Taylor advises Swedish suppliers not to try and compete mainly on price but on quality, especially as large volumes of cheap timber are being shipped from Canada totimber news | 8

Photo: Per-Anders Sjquist

The point will be for example to convince the Chinese that timber houses are more resistant to earthquakes as other types of building and that they offer many other green and cost advantagesRussel Taylor, MD for International Wood Markets Group

China as a result of the ravages of the mountain pine beetle epidemic in British Columbia. To date, Swedish exports of wood prod ucts to China have been fairly negligible,

at less than one percent of total exports of wood products. But now it is important to take advantage of any opportunities that are offered. A joint venture has been operating for

a few years between the Swedish forest industry and its counterparts in several European countries. The venture, known as EWI, the European Wood Initiative, is intended to promote the advantages of wood as a construction material and to develop usable construction standards. The point will be for example to con vince the Chinese that timber houses are more resistant to earthquakes as other types of building and that they offer many other green and cost advantages, says Taylor. If that aim is achieved, a huge market lies waiting. In addition, adds Taylor, they are already using imported sawn-wood to replace older sloping roofs as now allowed in the building codes for the city of Shang hai. This is a new opportunity to provide many roof trusses, and when this expands to other major cities, this market segment alone will could swallow up tremendous volumes of imported structural timber. Mats Wigardt

New sales company in ChinaFor the past five years, SCA Timber has had a representative in Hong Kong, focusing on sales and contract manufacturing. SCA is now about to take the next step and open a sales company in Hong Kong SCA Timber China & S.E. Asia Ltd.China. Now that the scope of timber deals with Chinese customers is increasing, it is important to review the composition of the marketing organisation. For example, all elements of administrative procedures, business transactions and payment proce dures must be correct. To solve this problem, weve set up a completely new sales company, he says. We will buy timber from SCAs sawmills in Sweden and sell it on to customers in China. is hoped that the company will have share holders and suppliers beyond SCA. With an organisation on site in China that is able to understand and discuss cus tomers requirements and sawmill capa bilities in a professional way, he also expects to be able to negotiate deals that are uniquely attractive to both parties. The aim next year is to sell at least 40,000 cubic metres of timber, a doubling of the volume currently sold. Put simply, our ambition is to grow the Chinese market, says Fridholm. Now that environmental considerations and quality have taken on an increasingly important significance, the requirements imposed on raw materials are becoming more stringent. In addition, Chinese cus tomers will be placing heavier demands on their suppliers in terms of expertise and service. Were now setting up an organisa tion that should be able to satisfy these requirements.Mats Wigardt

T

he solid wood products market in China is becoming more and more interesting. The Chinese furniture industry is swallowing up huge amounts of raw material, opening the door to signifi cant opportunities for the European wood industry to secure outlets for their products in China. In all the years Ive worked in China, weve noticed that when we place more focus on sales, we also make better deals, explains Mathias Fridholm, who has been the SCA presence in China for several years. Until recently, Fridholm and the staff in the Hong Kong office have largely acted as coordinators for the SCA sawmills that sell timber directly to customers in southern

All administration and service for SCAs customers will now go through the com pany in Hong Kong. The result of all this is expected to be better, more efficient pro cedures and a better information flow to customers, given by staff who know Chi nese regulations, speak Chinese and work the same hours as customers. We hope that this will provide our cus tomers with a better service and simplify communication, says Fridholm, who will be CEO of newly formed SCA Timber China & S.E. Asia Ltd. In the long run, it

9 | timber news

Celebrating professional developmentGraduates from SCA Timber Supplys courses, from across the timber and building materials sectors, reunited at a special event on 9th November to celebrate 10 years of SCAs timber training programme. Entitled: Wood. For Buildings? For Bio mass? Or ..?, the event was also designed to provide Continuing Professional Devel opment (CPD) for those present, by in creasing their understanding of wider issues affecting the UKs wood supply chain. For extra inspiration, the event was held in the ancient woodpanelled hall of Britains oldest moated building: New Hall, in Sutton Coldfield. We must never stop asking questions and learning more about the material we sell, SCAs managing director Rob Simp son told attendees. Its that depth of knowledge, built up over years of continu ing to learn about and experience wood for yourselves that will set your companies apart from the rest in the marketplace. Joining the celebration, Dr Peter Bon field, Chief Executive of BRE, told merchants that significant business opportunitiesexisted for wood in sustainable building, but that they should be more innovative in developing products and services for their customer base. Ian Tubby of Forestry Commission England, who helped set up the Commis sions Biomass Energy Centre information service, demonstrated the opportunities offered by increasing interest in smallscale woodfuel biomass boilers. He also reas sured delegates that there were untapped UK woodland resources to furnish at least a proportion of the fuel that such boilers would require. To close the event, Rob Simpson, man aging director of SCA Timber Supply and instigator of SCAs training programme, had the honour of cutting the celebration cake to share with guests.Camilla Hair

Ten years ago, Rob Simpson created SCA Timber Supplys customer training programme.

SCA Skogs forest environmental work given clean bill of healthThe annual FSC audit at SCA Skog has now been completed, and the results are very good. The audit looked at the forest management operations inNorrbotten and ngermanland, as well as the activities of SCA Skog Virke and Norrplant. At the final meeting held on 19 October, the auditors from SGS Qualifor stated that SCA Skogs working methods, procedures and systems were of the highest class. This result is only preliminary. It will be still be a while before the official audit report is published. One thing to come out of the audit is that the outstanding FSC nonconformances can now be closed, says Per Simons son, a forest ecologist on the forest management team. This years FSC audit was conducted in accordance with the new FSC standard, which only came into force on 1 June 2010. This meant that the auditors issued a number of minor CARs (Corrective Action Requests) concerning areas in which SCA Skog had not had sufficient time to adapt instructions and guidelines to satisfy the requirements of the new standard. This was, however, expected. Mats Sandgren, CEO of SCA Skog, is happy with the out come. As was the case last year, the environmental audit demon strates that our environmental work is of the highest quality. Our working methods, procedures and systems are well thought through and deliver good results out in the forest. Its all very gratifying. The drive to do a good job and the desire to satisfy our ambitions is strong from all quarters of the busi ness. Over the last few years, many people have made valuable contributions towards the excellent development we have experienced in this area.

Photo: Prestige Photography.

The SCA logo has been given a new appendage c/o life. It is short for care of life and sums up SCAs core values in a nutshell sustainable operations, a close partner for customers, a good workplace for employees and a company that focuses on products used in everyday life.

SCA Timber France broadens its expertise

Two new back ofce sales join Tunadal sawmillMarkus Henningsson,Product Manager at Tunadal sawmill, will, for a period starting in spring 2011, strengthen the lineup at SCA Timber France, working on business development issues.

Anna-Lena Gann and Elisabet Jonsson have been recruited as salessupport for the market department of Tunadal sawmill. AnnaLena and Elisabet took up their new posts on 18 October 2010 and succeed AnnChristin Godin and Ann Christine Bonr, who will be working in parallel with them until the end of the year.

timbernews | 10

Too high production in relation to consumption = worried customersFollowing a period of balance in the market, increases inproduction during 2010 have resulted in more stockpiling at sawmills and yet customers being increasingly reluctant to add to their stocks during the autumn. Consumption of construction and renovation-related products has been adversely affected by the second wave of the global financial crisis. This can be seen in many Mediterranean countries, as well as in the UK and the US. House-building is currently at what is an historically low level in both Europe and the US. During spring 2010, there was hope that the upturn in construction activity then underway would gain momentum and gradually return to the level deemed necessary to meet the housing require ments that exist on our markets. so important to Swedish sawmills, is developing positively, even in respect of new builds.

Production in the five biggest producing nations in Europe (Germany, Russia, Sweden, Austria and Finland) dur ing 2010 has increased approximately 7 percent from the very low levels of the previous year. However, the rate of increase is now declining month by month and has, just recently, been replaced by numerours press releases from individual companies notifying of the imposition of market-related production limitations.

Prices of sawn solid wood products increased throughspring 2010. However, this trend ceased since the summer holidays. Sawmill order books are reasonably full for Q4, whilst the situation for Q1 2011 remains unsure excessive ly increasing yheir inventories debateable. Customers continue to be sceptical of sawmills ability to maintain prices, for both pine and spruce, which means that they now continually test producers price stability. A decisive factor prior to the onset of winter will be whether sawmills can avoid excessively increasing their stockpiles.

Renewed economic turmoil experienced in the summer in both the US and the UK, as well as in the PIIGS coun tries, unfortunately resulted in activity in the construc tion sector contracting once again, and hopes for a recov ery have been put back to 2011. However, construction volumes in the major markets of North Africa and the Middle East continued to be good, as did those in many of the major markets in Asia. The renovation sector continues to develop better than its new-build counterpart. The domestic market, which iseurope Monthly imports of sooftwood lumber Main importing countriesUK Italy Germany Netherlands France Denmark Spain

SCA Timber will be closing down production at the companys sawmills for around two weeks at the end of December and into January. Production of standard solid wood prod ucts will be limited, whilst production of processed wood products, components and finished products will continue as normal. Other major producers in Sweden, Finland, Germany and Austria will be implementing similar measures. The aim is to gradually reduce production so that it balances with market consumption. Doing this will restore customers confidence in maintaining their own stock levels.Anders Ek, Marketing Director, SCA Timber

1 000 m3 700 600 500 400 300 200 100 0 2003-01

2004-01

2005-01

2006-01

2007-01 2008-01

2009-01

2010-01 2011-01Last observation 10121 000 m3 2 500 2 250 2 000 1 750

Woodstat 10-11-24

Seasonaly adjusted figures

northt africa Nordic Pine and price develomentNordic Pine Price

Price 160 155 145 135 130 125 120 115 105 100 95 90

1 000 m3 500 400 300 200 100 0 2003-01

china Monthly imports of softwood lumber

Change 10 2010/09: 20,1%

Russia Canada Chile U.S. Finland Sweden

1 500 1 250 1 000 750 500 250

2004-01

2005-01

2006-01

2007-01

2008-01

2009-01

2010-01 2011-01Last observation 1012

0 -0,3 1 000 m3 2 500 2 250 2 000 1 750 1 500 1 250 1 000 750 500 250

-0,4

-0,5

-0,6

-0,7

-0,8

-0,9

-10 Price 160 155 145 135 130 125 120 115 105 100 95 90

Woodstat 10-11-24

Seasonally adjusted figures

Nordic Spruce and price develomentNordic Spruce Price

1 000 m3 650 600 550 500 450 400 350 300 300 250 2003-01

north africa Monthly imports of softwood lumber from leading exporters

Change 10 2010/09: 24,0%

2004-01

2005-01 2006-01 2007-01 2008-01Seasonally adjusted figures

2009-01

2010-01 2011-01Last observation 1012

Woodstat 10-11-26

0 -0,3

-0,4

-0,5

-0,6

-0,7

-0,8

-0,9

-10

A proportion of sawmill exports have been moved from Europe towards developing markets in Africa and Asia. (Source: Woodstat)

Total sawmill stocks in Scandinavia and indexed price trends (as of 30 Sept.) (Source: SCA)

11 | timber news

Ingrid lund turns bark into our that she uses when she bakes.

Bark and birch sap in award-winning breadA staple of the past has now become a delicious delicacy. Ingrid lunds wood stove-baked bark bread has literally been selling like hot cakes. Her rye bread and crispbread have been declared the best in Sweden on more than one occasion. Warm bark bread with butter! It doesnt get any tastier than that, she says.hen Ingrid was forced to give up farming due to hay fever and her services as a biomedical analyst were no longer in demand, she decided to do something she had always wanted to try: bake bread. As a young girl at home in the tiny northern Swedish village of Gide, I always helped my mum when she baked her flatbread, she says. I learned to roll dough at an early age. Its probably in the genes. now she bakes flatbread, crisp bread and sour dough loaves in a woodfired stove in Ullnger, also in northern Sweden. But Ingrid, or SkogsHilda, which is the name of her company, has also launched a range of bark bread. In the old days when the har vest failed, you had to mix bark into the bread, she says. I do the same thing now, only this time I do it on purpose. flour in her dough, which is made of equal parts of organic rye flour and barley meal. The bark gives the bread a special taste. But it is also nutri tious, rich in both minerals and vitamin C, she says.

Things are going well for SkogsHildas bread products. At the Swedish food craft championships held this past autumn in ster sund, she was awarded four gold medals. The warming scent of fresh bread emanating from Ingrids oven gets your mouth watering. The butter melts on the hot bark bread. The crisp, slightly sticky bread has an altogether distinctive taste. Delicious is the resounding verdict.Mats Wigardt

W

In the spring, when the trees startto emit their sap, Ingrid cuts down young birches growing in her own wood. She strips the rough outer bark and then extracts the thin inner bark, which is soaked, dried and milled into flour. She also uses the sap produced by the birches in her wood as the liquid to bind the dough for baking crispbread. In the past, half the flour could be replaced with bark. Ingrid now uses approximately 15 percent bark

The dream of having her ownbakery has become a reality, and

Also see www.skogs-hildas.se

Photo: Skogs-Hilda