Since 24 June last year – the day after the Brexit vote – when sterling slumped against the euro and a three-decade low against the dollar, Irish timber processors have seen the value of their exports drop by 15%.

Midlands – Laois Sawmill

While the UK construction market is dominated by imports, the reverse is true of the pallet/packaging and fencing markets, which are dominated by UK-produced timber.

This is the market in which chair of the Irish Timber Council (ITC) and director of Laois Sawmills Ltd Jim McNamara has to compete. Laois sawn exports comprise fencing and pallet products, while the mill has diversified to wood pellets in recent years for the energy market through Greenwood Pellets, which he established in 2009.

“Although Brexit has created uncertainty, so far the market for our own products remains strong despite the currency downturn,” he said.

He believes that the industry can take some of the uncertainty out of the market by adopting a unified approach, which is emerging through the Timber Industry Brexit Forum.

“In this regard, the decision by Coillte to move away from 100% auction sales to develop a new timber marketing system was a welcome development because it provided a degree of certainty in price and also supply,” he said.

“The new system sells 50% through annual contracts and 50% through auction sales, which provides greater stability for both Coillte and its customers,” he said. “This was a good business decision by Coillte CEO Fergal Leamy and his team and I believe that the company and their customers would benefit by further increasing contract quota sales to 75% or 80%.”

West – ECC

Managing director of ECC Daryl Fahy welcomed Coillte’s recent decision to increase log supply and acknowledged that private timber supply was also increasing.

“The sector needs a concerted effort towards improving wood mobilisation of the private timber resource,” he said.

“The sawmill industry has come through a tough 12 months due mainly to currency volatility and Brexit concerns. However, the fundamentals are positive at present with increasing demand from domestic and export markets.”

South – Glennons

Joint managing director of Glennon Brothers Mike Glennon outlined the main threat to wood exports. “The UK is the largest importer of sawn timber in Europe, and our only logical market for exports,” he said.

“Log costs are lower in the UK than in Ireland, and with additional haulage costs and the impact of the deteriorating sterling exchange rate, this makes it incredibly challenging to be competitive in this market.”

Despite the projected timber increase from 4 to 8 million m3 by 2035, the industry is facing a supply-demand imbalance over the next three years, he maintained.

“The mobilisation of the private estate is a challenge that must be faced by all parties in the sector and room must be left for the private sector to grow,” he said.

North – Balcas

Timber trade between the Republic and Northern Ireland is important.

Balcas, the Enniskillen-based sawmill is a major exporter not only to the UK but also to the Republic.

“It is essential that sawmills have continued ease of access to markets,” said Brian Murphy, Balcas CEO. “Trading impediments such as VAT at point of entry would cause major economic and administrative burdens to sawmills throughout Ireland.”

Leitrim – Masonite

Ireland has three major panelboard processing mills, including Masonite, Carrick-on-Shannon, which generates a €25m spend in Leitrim and surrounding counties.

These are major consumers of sawmill residue and pulpwood from forest thinning in Ireland, so their future is interlinked with sawmills, forest owners, contractors and rural communities who benefit from the wealth generation that forestry creates.

The effects of Brexit are being felt in Masonite, “but markets continue to recover albeit slowly,” maintained Brendan Dee, Masonite purchasing manager. “While the impact from Brexit is still unknown, the potential for tariffs and customs delays leading to increased costs is a concern.”

“The increase in private forestry is welcome and we need to continue to work with private forest owners to maximise the output to the benefit of the whole industry.”

Read more

Focus: Forestry & chainsaws