Ahec’s convention in Budapest

Following the global economic recession, the U.S. hardwood industry’s infrastructure has gone through great change. However, following 5 difficult years with the loss of 40 percent of its sawmills and a dramatic decrease in production, both the domestic and export markets are now recovering. During the global economic recession, it was China that kept business alive for U.S. hardwood producers; in fact annual exports of U.S. hardwood to China increased by 192 percent between 2009 and 2012 and are still set to rise. It is estimated that 234 million new households are going to enter the ranks in China in the next 10 years and this extraordinary growth will only further increase the demand for building products.   

 

Despite the troubled European economy and booming markets in China, Ahec Executive Director Mike Snow reiterated that Europe remains a vitally important region for long term U.S. exports. “After China, half of the world’s top 10 largest hardwood importers are European countries – Italy, Germany, Uk, Belgium and Netherlands so they are markets that the U.S. will not ignore”,’ he said. However, markets across the European region are still very volatile. Total U.S. hardwood lumber exports to Europe in the first six months of 2013 were 178,800 m³, down 4% compared to the same period in 2012 and in value terms, year-on-year exports were down 3% at $128.8 million. The decline is mainly due to lower exports to Germany during the first quarter of 2013. Exports were also weak into the Benelux countries during the period. However, Mike Snow reported positively that exports remained robust to the UK and have begun to recover to France and Southern Europe, including into Italy, Spain, Portugal, and Greece. Despite the turbulence since 2008, American hardwoods have retained their market share whereas tropical timbers such as Brazilian and Malaysian hardwoods have seen a loss in market share in Europe in the last few years. 

 

On another positive note, there are early signs of economic recovery as the 2^nd quarter of 2013 saw Eu Gdp up by 0.4 percent compared to the first quarter and data reveals a rising trend in U.S. hardwood lumber exports to Europe during the course of 2013. This aligns with emerging signs that the European economy may have hit bottom in the opening months of 2013 and is at last on the long road to recovery.

 

Growing concern from trade representatives at the Convention were now centred on supply. Mike Snow, Ahec Executive Director explained, “Supply is now a much more important issue than demand. Numerous factors have conspired to reduce production of grade lumber including: closure of numerous sawmills in recent years; lack of loggers and truckers; difficulty of obtaining credit in the logging and sawmilling sectors; and diversion of wood to industrial markets which are easier to service and where payment is received more quickly. At the same time, more of the grade lumber being produced is now being diverted to other global markets, notably China. However, it was made clear that supply is a global issue. An essential message that Ahec was keen to deliver is that the industry can increase production without endangering the growth to removal rate”. Professor Scott Bowe from University of Wisconsin later described the U.S. hardwood resources as, ‘one of the most important wood fibre baskets in the world. The forests are currently being underutilised. A healthy forest industry is a healthy forest and we need to harvest trees to keep the forests healthy.’ 

 

The U.S. hardwood industry has a very good story to tell about its sustainability and legality and Ahec has worked to provide the data to help communicate these messages to the wider industry to alleviate misconceptions about uncertified timber. In a session about certification, Professor Scott Bowe commented, With over 56 percent of the hardwood resource being privately owned land, it is unrealistic to expect certified timber from the U.S. Landowners shouldn’t be made to look bad if they don’t certify their land; certification is simply an added cost and wouldn’t change the way they manage their land.’ Discussions concluded that Green Building Systems must be based on science and there is a real frustration with approaches that still favour only Fsc certified wood and are based on unscientific credit systems. 

 

Ahec’s proactive approach to providing data to back up and communicate the industry’s strong environmental credentials all the way down the supply chain from importer, to manufacturer, to architect and to consumer, has resulted in a new American Hardwood Environmental Profile (Ahep). This is a shipping document that Ahec members will be able to start using by the end of the year which will provide access to information on the sustainability of the U.S. hardwood species contained in that consignment, together with quantitative data on the environmental impacts associated with delivering each specific consignment to an individual customer. The structure and content of the Ahep aligns with the requirements of the Eu Timber Regulation and will combine data from the Ahec Life Cycle Assessment (LCA) project with information derived from other credible data sources to demonstrate the legality and sustainability of U.S. hardwood lumber and veneer delivered into export markets. Ahec members will be able to attach these documents to each shipment by the end of the year. 

 

This is Ahec’s most forward thinking environmental strategy that combines it recent work on the Seneca Creek Study (which is due to be updated in 2014) and the Life Cycle Assessment study. Mike Snow concluded, “Where we are still in a world where people think wood is bad, we can only convince them with credible, scientific facts”.’ As part of this ethos, Ahec now produces environmental impact assessments for design projects such as ‘Out of the Woods’ in 2012 and Endless Stair in 2013 to encourage transparency in product design and building. 

 

With an industry goal to increase sales of U.S. hardwoods, Ahec is focused on developing existing markets and finding new markets and applications for American hardwoods. Neil Summers from Timber Dimension and Dr. Wolfram Scheiding from Ihd Technical Institute in Germany presented on thermal treatment, a technology to increase hardwood’s durability. Heat treated timber for exterior joinery, decking, cladding and window manufacture is becoming increasingly popular with consumers because of its enhanced durability classification. Its advantages include that it is free of chemicals, it hides any staining on the raw timber, it eliminates the need for stainless steel fixings, and it has excellent machining properties and better thermal values.   Heat treatment also allows for better utilisation of American hardwoods because after treatment the finished colour is consistent regardless of colour variations from the heartwood and sapwood of the raw material. A big misunderstanding amongst architects and designers is that heat treatment dulls the colour and character; Neil Summers commented, ‘The colour and tone depends on the degree to which the timber is heated. Depending on the species, the grain pattern is still very apparent and colour can vary from pale to dark chocolate brown.’ Many species work with heat treatment but particularly good results are achieved with high grade ash and tulipwood. High density and ring porous species do not perform as well. Neil Summers referenced the Mucem museum in Marseille where 1200m² of heat treated American ash decking was fitted with excellent results.

 

There are significant opportunities for heat treated timber in the window market. In the 1970s, 90 percent of the window market was for timber windows, however with the expansion of Pvc and plastic markets, it is now down to a mere 5 percent. With growing environmental awareness favouring timber products, there is huge potential to gain back some of this market share. Windows only require a durability rating of 2-3 so the timber does not need to be heat treated to the highest temperature.

 

Dr. Wolfram Scheiding confirmed that Germany is already using heat treated cores in windows because it improves the thermal performance of the windows by 10 percent. There are currently 92 heat treatment plants in Europe with much room for growth.  There are only 10 heat treatment facilities in the United States; Scott Seyler from Northland Forest Products, an Ahec Member Company involved in heat treatment of hardwoods, described ‘good increasing demand’ for the product. 

 

Ahec recently commissioned durability testing with Catas, in Italy. This process exposes multiple samples of various species to fungi for sixteen weeks and the timber is weighed at the beginning and end of this process to determine its durability. It is hugely encouraging for the industry that American heat treated hardwoods scored the highest possible durability rating of ‘1’. This information will now be taken forward to standards committees to be communicated to the wider industry. Ahec will continue researching applications for heat treated hardwoods by commissioning strength testing for heat treated hardwoods to see if there is potential for use in engineered timber solutions. 

There has been a long term decline in construction in Europe and its total value in August 2013 was 10 percent lower than in 2010 and 25 percent lower than in 2008. However, within the construction mix, wood in construction is actually gaining market share and Ahec and the U.S. industry is right to look at this as a market opportunity.   Andrew Lawrence from Arup reported, ‘people are beginning to realise that timber is easy to work with and is popular with consumers.’ For instance, Tesco has now built 30 supermarkets in Uk with timber being the prominent material and sales figures show that people spend more time and money in their timber stores. It might seem a dubious way to account for increased profits, but studies prove that people react well to timber buildings.  It is a similar situation with schools in Uk where over half the new schools built in the last 10 years have been built in wood. They are quick and quiet to erect and warmer, more relaxing internal environments. 

In recent years, the building industry has seen huge development in engineered timber solutions. One of these solutions, cross-laminated timber (Clt), was the basis of Ahec’s recent collaboration with Arup, ‘Endless Stair’ – a seven metre high structure designed by dRmm Architects that was built for the London Design Festival outside Tate Modern. Tens of thousands of people climbed the structure, picked up brochures and watched the films, all of which hugely raised the profile of U.S. hardwoods and engaged the public in the importance of timber in construction.

 

Clt offers exciting potential for American hardwoods and particularly for American tulipwood which has a high strength to weight ratio. Tulipwood has a similar density to a typical softwood and yet testing commissioned by Ahec at Trento University found that tulipwood Clt had three times the rolling shear strength and is three times stiffer than softwood Clt which is a hugely exciting result for the hardwood industry. In fact, when the installation of Endless Stair was completed and the scaffolding removed, the top cantilever stair deflected by only 3mm, far less than expected, proving the material was actually stiffer than the original data showed.

 

The Clt for Endless Stair was made in low grade ‘number two common’ timber which reduces the cost significantly. Low grade timber is not a problem because any imperfection in one layer is dealt with in the next. In a panel discussion with Chad Cole from Imola Legno, who fabricated the tulipwood Clt panels, Cole said, “Our business is heavily focused on Fas stock so I was curious about how the low grade timber would look and how we could sort it to produce a prime product from the material. We managed to optimise the material with as little waste as possible. The strength gained from the tulipwood Clt was great but what is almost even more exciting is the beauty of the finished product which comes from the natural character of the hardwood”. Andrew Lawrence agreed that there is real potential in the panels as a finished product, “In the Uk, Clt is generally covered with limewash because it can be quite ugly, however here we have a really attractive product”.  

 

Detailed work is already underway to assess the technical performance and economics of hardwood Clt. Looking at the bigger picture of the construction industry, European’s are starting to look seriously into adding hardwoods to their product mix, including various hybrid solutions such as beech Lvl and softwood glulam with a hardwood face. Hardwoods are competitively priced, offer up to twice the inherent strength and give an aesthetic finish. Ahec was pleased so see such resounding positivity from the convention audience and will continue to communicate the potential to the construction industry.

 

Drawing on an analysis of Eu hardwood trade flows undertaken for the European Timber Trade Federation, Rupert Oliver from Forest Industries Intelligence, highlighted that there is no significant boundary in trends before and after enforcement of the Eutr in March 2013. This is contrary to widespread expectations that Eutr might lead to a very rapid decline in imports of hardwood from countries perceived to be high risk from a legality perspective, notably in the tropics, or that have particularly complex supply chains, such as China.

 

While Eu tropical hardwood imports have been declining in 2013, this is only a continuation of trends that began well before Eutr implementation. Meanwhile imports of plywood, flooring and furniture from China dipped a little in March and April 2013. However, the dip was not significantly out of line with seasonal trends in previous years and trade with China quickly recovered in the following months. The temporary downturn in Chinese imports was also apparent in non-wood furniture products which are not Eutr regulated, suggesting other commercial factors were just as significant in driving the trend.

 

Nor is there any evidence yet that Eutr is leading to diversion of trade in more sensitive products from Eu Member States with tough sanctions to those with weaker enforcement regimes.

 

Lack of any step-change in trading patterns following Eutr enforcement should come as no surprise given the evidence of significant delays in issuance of guidance and recognition of Monitoring Organisations by the European Commission, and in the passage of laws and development of capacity to enforce Eutr at national level in the Eu. However Rupert Oliver went on to comment, “It would be premature to conclude from this that Eutr is irrelevant. Inspections by Competent Authorities are now getting underway in many Eu Member States and reports are just emerging of the first enforcement actions. It’s very evident that environmental groups are closely scrutinising trade flows and are on the look-out for breaches. There is mounting pressure on Member States to increase capacity for enforcement”. The Ec approved the first tranche of Monitoring Organisation in early September.

 

It was also emphasised that a large section of the European wood importing sector has been in the front-line of environmental campaigning and developing responsible procurement practices already for many years. The lack of a step change in trade in March 2013 may be interpreted as a positive sign that existing private sector due diligence procedures are working effectively and reasonably robust.

 

Eutr may not be a game-changer capable of driving a radical shift in trade flows on its own, but it has an important role to play to reinforce existing trends, and to catalyse further developments in due diligence practices. 

 

Of the 2013 Ahec European Convention in Budapest, Ahec European Director David Venables said, “The role of the European Convention continues to provide a unique discussion platform to help both the European trade and U.S. industry to develop new markets and communicate the potential for greater use of a wider range of U.S. hardwoods”.