Chapter 1
INTRODUCTION

1.1 Background

In 1991, FAO published a study on "High-Value Markets for Tropical Sawnwood, Plywood and Veneer in the European Community", with the aim of drawing attention to the need for a change in the marketing practices within the industry. At the time, marketing practices appeared to be based on a highly commodity-orientated approach. Then, the raw material for tropical hardwood, sawnwood, veneer and plywood originated almost exclusively from natural forests. However, recent studies carried out under the project "Hardwood Plantations in the Tropics and Sub-Tropics", indicate that an increasing volume of tropical hardwoods, particularly teak, will originate from plantations in the future.

1.2 Aims and objectives

The aims of this study were to:

· provide an up-to-date 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 Japan and North America);

· give a description of the main marketing factors for accessing the markets;

· contribute to the identification of important attributes, which can be used in the marketing of tropical hardwoods in general and plantation grown tropical hardwoods in particular, to various end-use segments;

· describe the main features of the current marketing/business environment and changes to it as they may affect the tropical hardwood sector.

A full copy of the terms of reference of the project as laid down in the letter of agreement is included in Appendix 1.

1.3 Methodology

A variety of different methods were used for gathering data/information for this report. Essentially, however, this consisted of a programme of `desk research' and direct contact (telephone and personal interviews) with a number businesses and organizations. Obtaining contacts for interviews proved harder than originally anticipated for a number of reasons, including unavailability of staff, companies not willing to take part or not responding to correspondence. Contacts for the study were found by a process of `linear sampling', from an original contact (obtained by personal recommendation and literature searches) information was sought from that person of other contacts within the industry who might be willing to co-operate. Personal interviews were carried out in a number of European countries. A large number of those contacted reported that they did not have any data on the type of information being collected and declined interviews (although most expressed an interest in obtaining the results of the completed study).

While some of the companies contacted gave freely their time and information to the project, many of the companies reported that they were being asked to provide `marketing information' and to take part in surveys more and more frequently. This `overload' was one possible reason for companies not wishing to participate. Other contributory factors could be failure to get any useful feedback from surveys and the highly competitive market, traditional conservatism of the industry and sensitivity to criticism about tropical timbers. In some instances companies are reported to be requesting payment for participating in such surveys and questionnaires. In order to maintain confidentiality with the companies/individuals that did participate in this report, their names have not been included.

Table 1.1 presents the countries and types of business sectors in which personal interviews were carried out (or where other significant contact via telephone or written correspondence was established). Most contacts with timber traders were with managers responsible for both buying and selling of imported timbers. Contacts with end users were with buyers and production personnel.

Table 1.1: Types of business/country of origin participating in the survey

For the reasons mentioned above, the distribution of companies interviewed both geographically and in terms of the business sectors covered was smaller than originally anticipated. The problem of obtaining data proved much harder and far more time-consuming than was expected. Whilst much time and effort was expended in trying to establish contacts and chasing leads, few statistics on end uses of tropical timber products were gathered. An interesting point arising from this was, however, that many of the individuals/organizations contacted were under the impression that FAO, the International Tropical Timber Organization (ITTO) or various trade federations would be the organizations most likely to have gathered information on the end uses of tropical hardwoods in Europe. Although most companies contacted expressed an interest in obtaining such information, most said that they did not actually collect such data, or if they did, they were unwilling to divulge it.