The objective of this study was to provide an up-to-date, quantified, description of the current and future markets of high-value tropical sawnwood, veneer and plywood in Europe, with a rough comparison to the markets in North America and Japan. Further objectives were to provide a comprehensive description of the main marketing factors for accessing the markets and to identify important attributes that can be used in the marketing of tropical hardwoods, in particular, to various end-use segments.
Although traders and industrial buyers offer certified forest products in Northern Europe (the United Kingdom, Germany and the Netherlands), it is not a requirement of buyers, nor are they generally prepared to pay a price premium, unless it is a specialist niche market. Although desirable for buyers groups and stakeholders to have mutual recognition of certification schemes (Forest Stewardship Council [FSC], Pan European Forest Certification [PEFC] Scheme and others), this is not currently the situation. Mediterranean countries and France (like Japan and the United States of America) are less likely to require certification of forest products.
Conservatism about the use of plantation teak comes primarily from the merchants, importers and manufacturers rather than the final consumers or end users who often appreciate the aesthetic natural qualities of the wood. Overall the opportunities for plantation grown teak in Europe are considered to be good. However, the marketing of plantation and lesser-known species was reported by the industry as being difficult. In these instances, introduction is more appropriate through use in value added products where design, quality and service are considered more important than the tradition of using certain species in a particular country for a given end use.
The European tropical hardwood industry, over recent years, has suffered from a loss of markets. There are many reasons for this loss; however, some of the main factors include:
· negative public perception of tropical timber products arising from campaigns by non-governmental organizations (NGOs) linking tropical timber consumption with tropical forest depletion;
· change in fashion from dark coloured species to lighter coloured species;
· increased competition from other wood, as well as non-wood, substitute materials (e.g. plastics in window manufacture);
· reduced margins within the timber industry `squeezing' tropical timber profitability;
· policy changes by exporting countries (especially Southeast Asia), shifting export emphasis from primary products (logs, sawnwood, plywood and veneers) to secondary processed products.
There are now, however, some signs of optimism regarding the future of tropical timber products. These result from:
· public perception of timber is changing: wood, in general, is seen by many to be a `green' material;
· mounting concern over the environmental credentials of substitute materials, particularly plastics;
· fashion: some evidence suggests that there is a reversal in the trend for lighter coloured species, with darker woods gaining popularity in some areas.
In general, the future markets for tropical timbers are seen to be predominantly in the maintenance of existing, `traditional' markets (joinery, furniture) with the possible regaining of market share lost in recent years. It is unlikely that significant `new' markets will open up for tropical timbers, with the possible exception of indoor flooring and outdoor decking material.
There has been a general decline in the importation of tropical primary products into Europe over the past ten years, whilst the regions of supply have changed markedly. Over the same period, the level of imports of secondary processed products have increased rapidly and in 1998 accounted for a third of the value of all tropical products imported into Europe. This trend seems likely to continue.
The supply of plantation (and lesser-known) species is likely to increase in the future. The opportunities of these materials would appear to lie in product development and by adding value through the manufacture of secondary processed products in the exporting countries.
In terms of how primary tropical timber products compete against alternative materials, in general, the `natural' or technical properties are perceived to be their strongest attributes. However, product specifications and particularly issues of supply are seen to be weaknesses of tropical timbers.
With regard to the supply chain, traditional importers and traders are those still, in the main, dealing with exporters. There is, however, a trend to shorten the supply chains and `e-commerce' is likely to affect this still further.
Price is a key factor influencing purchasing decisions, but is not the sole buying criterion.
A comparison with other economic regions reveals that, as in Europe, Japanese imports of primary products are falling. In North America, tropical primary product imports only form a small fraction of the total. The situation with secondary products is different; in Europe and North America the value of these is rising, however, in Japan levels have not changed over the past five years.
Based on the findings of this report, the following are the key recommendations for maintaining and promoting markets for tropical hardwoods in the future:
· Limited data on end uses are available. Research should, therefore, be undertaken to elucidate key areas at a European level. This would enable more effective, targeted promotional campaigns to be undertaken.
· Contacts with key personnel within industry, prepared to give regular feedback on the market situation, should be developed and maintained.
· Traditional markets are seen as the key continuing markets for tropical timbers. Promotional campaigns aimed at maintaining or increasing market shares in these sectors are recommended. Any problems associated with such promotion should be elucidated and strategies for dealing with these issues developed.
· Education campaigns, highlighting the benefits of tropical timbers, which target architects and builders' merchants (and any others involved in recommending/specifying materials) should be instigated.
· Tropical timber is considered to be synonymous with `quality'. The development of value added markets for tropical hardwoods, particularly plantation grown species, is thought to be one way of gaining market share.
· Research should be conducted into end user requirements in terms of tropical timber product appearance (i.e. the presence of natural defects such as knots) since there is some evidence to suggest that this contradicts what the industry believes consumers require. This may be of particular relevance to the introduction of plantation or lesser known species.
· Measures should be taken to ensure the quality, regularity and dependability of tropical timber supply.