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Timber crisis threatens mills amid race for costly imports | FURNTR
Timber crisis threatens mills amid race for costly imports


Timber crisis threatens mills amid race for costly imports


Timber providers are hiking prices amid a domestic supply crisis and surging costs for imports.

They warn that, unless the Government breaks the logjam, Ireland soon will run short of essential construction products and pallets, disrupting home building and supply chains – and forcing timber production lines to shut.

Managing directors of several top sawmills in Ireland say the only reason they have not run out of logs is because of an unexpected consequence of the Covid-19 lockdown. When  building sites went quiet, their stocks briefly increased.

“If we didn’t have the lockdown, all sawmills would be out of wood today,” said Mike Glennon, co-director of Longford-based Glennon Brothers Timber. “Builders and builders merchants shut, so demand stopped for five weeks. If we had a normal run of activity, we’d be out of logs already.”

Nonetheless, most of those stocks are gone – and shift shutdowns and layoffs could be only weeks away.

“We have given our staff notice that there’s a potential for layoffs coming down the tracks,” said Niall Grainger, managing director of GP Wood, which operates two Co Cork sawmills and co-owns the pallet block manufacturer Eirebloc. “I could start leaving people go from October onwards.”

GP Wood and Eirebloc employ 450. “All those people’s jobs are in jeopardy,” he said.

The central reason for the supply crisis is homegrown.

A Department of Agriculture permit system for planting and harvesting trees has become overwhelmed by 1,800 applications and 400 approved permits being appealed by a handful of environmentalists.

Its Forestry Appeals Committee is being inundated with objections to most licences intended to prevent the planting of conifers and block the felling of commercial forests.

The State forestry agency Coillte, which supplies nearly three-quarters of all logs to sawmills, normally holds monthly auctions to keep supply steady. It has cancelled at least a half-dozen this year, and has no contracts secured for next year. Virtually all of the required permits are stuck in a colossal queue.

“We’ll enter the new year with no Coillte contract. That’s when we’ll see the car crash,” said John Murray, managing director of Murray Timber, whose Co Galway-based firm is getting less than a quarter of its usual log supply.

The sector’s umbrella body, Forestry Industries Ireland, estimates the trees tied up in appeals equates to 1.1 million cubic metres of logs – nearly a third of the sawmills’ normal annual consumption.

“The timber that the economy needs right now is still in the ground. It’s in a two-year queue, and if you’re lucky you could end up in another two-year queue,” said Forestry Industries Ireland director Mark McAuley. “It’s so crazy.”

Foresters are counting on the Government to amend the Agricultural Appeals Act quickly to give the Forestry Appeals Committee enough resources and authority to clear the backlog. An expected draft bill is not yet published.

That agenda can’t have been helped by the Government’s appointment of three agriculture ministers in two months.

Builders merchants who rely on sawmills for much of their goods are scrambling for foreign substitutes despite escalating costs.

Sourcing sawn timber from overseas is unusually difficult now because prices have just hit record peaks in the US, driven by a pandemic-fanned home DIY boom. Timber demand is surging in reopened China, too. This means European producers are preferring to service those vastly bigger and more lucrative markets, putting Irish buyers near the back of the queue.

“We have had to switch a lot of our purchases to imported timber from Latvia, Russia and Scandinavia to try to meet the demand. But it’s not going to be sufficient,” said Sean Moran, chief executive of HPC Group and its chain of TJ O’Mahony builders merchants.

TJ O’Mahony outlets normally import about 40pc of their timber products. Mr Moran expects that to top 75pc as Irish supply plunges.

He said TJ O’Mahony’s cost of sourcing Irish timber has increased by 6pc in recent days, imports by 15pc.

Its stores are struggling to source Irish wall plate, a core 100x75 (4”x3”) component for supporting roof structures.

“It is a critically important size. Lack of availability will have a negative impact on house building and will likely hold up projects,” he said.

At rival merchant Brooks Timber, managing director Mark Lohan raised its timber prices by about 5pc in mid-August. Brooks also told customers in the firm’s latest newsletter “all timber will increase by €10 per square metre” on September 21. “We expect price increases in October and November. At that point we could see people moving away from timber to native products. We could see lasting damage to our timber industry, because once people switch supplier they might not switch back,” Mr Lohan said. “The sawmills face a medium-term risk of remaining closed.”

Sawmills trying to fill orders can’t import logs from continental Europe because of pest controls. But they’re importing from the UK, which has no licence-driven supply issues.

About 30pc of Glennon Brothers’ current log supply is coming from Scotland.

Mr Glennon said those imports should keep its mills running to the first week of November.

Mr Grainger of GP Wood said Irish logs typically cost around €75. But the Scottish logs he’s importing via the Port of Cork are €110 to €120 each.

“The serial objectors have stopped us processing Irish trees from down the road, so instead we’re taking more logs by truck and ferry from Scotland,” he said. “In environmental terms, it is totally bonkers.”

News Author : Selma SEZGİN

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