Enlarge image
Sawn timber is the new gold:
The Scandinavian forest giants Stora Enso and SCA are currently benefiting particularly from the sharp price increases
Photo: Bloomberg Creative / Getty Images / Bloomberg Creative Photos
Up until now it was more the exception than the rule that German house builders were confronted directly with the calamities of the world markets.
Well, the accident of the container ship "Ever Given" in the Suez Canal a few weeks ago caused a shortage of plastic parts in some hardware stores.
This may have caused delays for one or the other new property builder.
However, this has hardly called house construction as such into question.
With one important raw material, however, things are different: construction timber is currently not only comparatively scarce in Germany, its price has also risen sharply: companies are complaining about price increases of a good third this year alone.
In Germany, forest owners want to put the trading groups under pressure with a "saw strike" because, in their opinion, they hardly benefit from the rising prices.
The big money in the wood boom is currently not earning the German sawmill associations - but two Scandinavian forest giants: Stora Enso and SCA were once known for paper production, but are now skilfully jumping on the megatrend of sustainability - with huge forest areas behind them.
The price increases in Germany - compared to the world market price - are downright harmless: within a year, the price for sawn timber has risen by almost 400 percent.
1000 board feet, around 2.36 cubic meters of wood, are currently being traded for 1630 dollars on the world market.
At the beginning of May 2020 it was still around $ 330.
So the price has almost quintupled.
The reasons for the enormous price increases: On the one hand, a pest has caused great damage in Canada, the world's largest wood exporter.
This scarcity affects the price.
On the other hand, the corona pandemic has led to a construction boom around the world.
Wood is currently in demand as a building material from a sustainability point of view, including in the USA, which is the world's largest importer of coniferous sawn timber.
Their main wood supplier to date, Canada, from which over 90 percent of the wood imported into the USA comes from, is struggling with supply problems.
That is why the USA is now increasingly switching to sawn timber imports from Europe - even if industry experts do not consider this to be sensible in the long term.
German timber exports to the USA increased by 55 percent
According to the specialist magazine "Holzkurier", the old continent already supplied 8.5 percent of US import requirements in 2020.
In Central Europe, i.e. in Germany, Austria and the Czech Republic, wood production increased by 12 percent between 2015 and 2020.
Since consumption in the three countries remained almost stable during this period, the additional coniferous wood cuttings were primarily used for export.
Americans can apparently cope with rising prices at the moment, probably also because of the economic upturn and the generous corona aid from the US government.
The lack of wood currently means that the price of a new house in the USA has increased by $ 24,000, according to the national home builders' association.
But that doesn't seem to be slowing down demand at the moment.
This is also felt by the German wood processors and sellers, i.e. the local sawing industry: According to the Federal Association of the German Sawing and Wood Industry, 20 million cubic meters of round and sawn timber were exported in 2020 - an increase of 80 percent compared to the previous year.
The sawmill associations work according to their own information "at the stop".
However, with around 2,000 companies, the industry is quite fragmented.
According to the Association of the German Sawmill and Wood Industry, only 34 companies are large companies with over 250 employees.
Forest giants Stora Enso and SCA become wood winners
In contrast, there are real forest and wood processing giants that are also active in Germany in the northern neighbors: For example, the Finnish-Swedish company Stora Enso, which owns a whopping 1.6 million hectares of forest (16,000 square kilometers).
Europe's largest private forest owner with 2.6 million hectares (26,000 square kilometers) of forest stock is its Swedish competitor Svenska Cellulosa Aktienbolaget, better known under the acronym SCA.
For decades, the two forest giants have used their forest for paper and cellulose production.
But both companies are gradually saying goodbye to this line of business.
One reason for this is increasing digitization: Smartphones, tablets and screens have been used as reading and writing devices for a long time.
Stora Enso plans to shut down two of its paper mills this year. In the future, only 10 percent of group sales will come from printing paper production, a decade ago it was a whopping 70 percent. Stora Enso wants to grow in the future with the production of packaging material and fiber materials - and with the sale of sawn timber.
Four years ago, competitor SCA spun off its Essity hygiene division and went public - Essity processes wood into end products such as Tempo or Zewa handkerchiefs. SCA has now completely withdrawn from paper production, and the group closed its last own paper mill in the first quarter of 2021. In the future, the Swedish group intends to concentrate exclusively on the management of the forest - and to sell lumber, which is also used for the manufacture of packaging and energy generation.
If you look at the latest quarterly balance sheets of both groups, you have an inkling of where the journey is going: The "market situation for solid wood products has continued to intensify", says SCA's preliminary balance sheet for the first quarter, which led to higher market prices in all regional markets " Although SCA's quarterly sales fell from 4.8 billion Swedish kronor in the same quarter of the previous year, which SCA justified with the closure of its paper mill, earnings before interest, taxes, depreciation and amortization rose by 32 percent to 1.4 Billions of crowns because of "higher sales prices in all product areas"
Stora Enso now describes itself on its website as a "renewable materials company" - there is hardly anything left to read about the stupid paper and cellulose manufacturer. Recently, three business areas - packaging, pulp and wood products - have developed well, according to the quarterly balance sheet. Their sales increased by 14 percent to 2.3 billion euros compared to the same quarter of the previous year, and operating EBIT almost doubled to 360 million euros.
The forest division recorded favorable harvest conditions this winter, it is said, which was able to ensure "efficient wood delivery" to the company's own wood production units.
The group wants to grow in the future with a focus on packaging, wood construction and biomaterials.
Given the high wood prices, Stora Enso can easily afford the necessary investments.
wed