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WhatWood Global Trends Review Global Trends Review, June 02-15, 2014: large M&A deals in the Baltics; EU parquet trends in Q1

Global Trends Review, June 02-15, 2014: large M&A deals in the Baltics; EU parquet trends in Q1

20 June 2014 ` 11:07  

On 10 June 2014, Metsä Group agreed to sell its Estonian subsidiary Metsä Wood Eesti AS to the local company Combimill OÜ. Simultaneously with the transaction, the parties have agreed on commercial cooperation in raw material procurement as well as by-product and sawn timber sales, the group said in a press release.

The company explained the sale by its strategy to maintain industrial efficiency and competitiveness of the core business.

Sawmilling activities of Metsä Wood Eesti AS are located at the production unit in Reopalu, Järva County, central Estonia. The annual capacity of the Reopalu sawmill is 75,000 m3 of spruce timber. Turnover of Metsä Wood Eesti AS amounted to approximately €16 million last year.

Combimill OÜ is an Estonian producer of pine sawn timber with a production facility located in Kõidama. The transaction is expected to be completed by the end of Q3/2014, after the approval by Estonian competition authorities.

Riga Wood Finland OY, a Finnish subsidiary of plywood producer Latvijas Finieris, has acquired a birch plywood mill in Sastamala, Finland. Among this year’s goals the Latvian group named stabilization of work in three shifts at this enterprise. As CEO of Latvijas Finieris Janis Ciems said, the deal will help improve company’s logistic solutions.

More than 90% of plywood by Latvijas Finieris is exported and marketed in over sixty countries, most of it in Germany, Great Britain, France, Finland, Turkey and Italy.


Discussions at the spring meeting of the European wood flooring manufacturers association FEP indicate that the industry continues to face major challenges, ITTO reported. There are some signs of improving demand in a few countries and of a more stable situation in others. However the market remains very difficult in Southern Europe. Lack of consumer confidence, the weak European construction sector as well as an ever increasing competition are daily challenges for the European wood flooring industry.

In Finland, parquet consumption is expected to remain stable during 2014 with total sales of around 1 million m2.

In France, the year started badly with parquet sales down an estimated 8% to 10% in the first quarter of 2014 compared to the same period in 2013. Consumer confidence is still lacking. Traditional retailers no longer regard wood flooring as a priority product. Competition with other flooring types is becoming even more intense.

Despite the good economic situation in Germany, the parquet market remains static with zero growth expected this year and intense competition from other products. As in the past, wider boards are becoming increasingly popular. DIY stores are moving towards new products such as luxury vinyl tiles (LVT).

After a very poor year in 2012, the market in the Netherlands stabilised in 2013. First quarter sales in 2014 were the same as in the first quarter of 2013.

In Sweden, parquet consumption was up around 2% in the first quarter of 2014 compared to the same period in 2013. The housing sector is starting to recover.

Meanwhile, Sweden’s export volumes of sawn and planed timber in January-March were up 9% compared with the first quarter last year, TTJ reported.

The latest figures from Statistics Sweden reveal that sawn redwood made the bigger gain of 7.8%, against sawn spruce volumes which rose by 1.9%. Prices rose by an average 8.6% during the quarter.

Exports to the UK made one of the biggest gains – up 19.1% – while Germany registered an increase of 3.3%. Denmark and the Netherlands, two other major European consumers of Swedish timber, have also increased their imports significantly.

A 23.5% decline in spruce volumes to Japan led to an 11.5% drop in volumes overall.

Egyptian lumber deliveries from Sweden skyrocketed by 55.1%. The other two major African customer countries are Algeria and Morocco, though with a decline in imports of Swedish lumber by 11% and 14% respectively.

Swedish company Södra Timber is initiating a collaboration with the Polish Wood Brokers for sales in Poland, as this company has a large established network throughout the country. As Södra Timber President Håkan Svensson said, Poland is a new and interesting market.

According to Fordaq, exports of sawn timber from Sweden to Poland amounted to 150,000 m3 last year, which is 20% higher on-year. This trend is predicted to continue, and the company wants to participate in this development, Svensson concluded. Note that earlier another Swedish group, Setra, announced opening of a sales office in Poland.

As of 1 August, Scottish sawmill group BSW Timber will take over R.F. Giddings company based in the south of England. This will raise BSW Timber’s number of sawmills to eight – seven in Britain and one in Latvia. The new owner intends to double production capacity to 60,000 m3 within a year, Holzkurier said quoting Builders Merchants Journal.

BSW is also going to expand its Newbridge mill capacity after the company successfully secured additional 600,000 m3 of larch log supply over a ten-year period, with all logs being sourced from Welsh woodlands, TTJ reported. Existing annual log supplies of more than 700,000 m3 have also been resecured over the same period.

Current Newbridge capacity is 150,000 m3 annually. The log deal will also provide a ready market for larch, which has to be felled as part of the project to combat the tree disease phytophthora ramorum, which is affecting about a fifth of Welsh larch.

The deal will maximise BSW’s production of home-grown timber and provide exciting new opportunities for the market, as company CEO Tony Hackney said.

Chugoku Lumber, the largest Douglas fir lumber manufacturer in Japan, decided to reduce dry beam prices by 2,000 yen per m3 ($19.6), as the lumber market has been weak since April after a 3% hike in consumption tax. Construction materials trade has been slowing since January 2014, and the prices reached its peak in the same month, ITTO reported. Competing laminated lumber prices are also weakening. Douglas fir log export prices dropped for two months in a row, April and May.

WhatWood’s reviews are prepared using corporate press releases, Holzkurier, Timber Trades Journal, Fordaq, EUWID Wood Products, ITTO, ForestTalk, and EUWID Paper.

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