Half a year after the first survey, the German Sawmill and Wood Industry Association (DeSH) asked its members again about the effects of the coronavirus crisis. The result: The levels of concern vary widely across the industry. The hardwood sawmills, of which 56 percent are still in an economically difficult situation, are still facing particular challenges. In the case of softwood companies, it is only around 27 percent.
“Fortunately, the coronavirus crisis has not yet hit the sawmill and wood industry as badly as we expected at the beginning of the lockdown. However, our survey shows how differently the individual sub-sectors have come through the crisis. Softwood companies were able to compensate for the initial weakness in demand and in some cases even overcompensate for it. On the other hand, the majority of the hardwood mills are still seeing clearly negative effects even after months,” explains DeSH managing director Lars Schmidt.
This can also be seen in short-time work: “At the moment, eleven percent of our companies report that they have registered short-time work. However, the hardwood mills (27 percent) are significantly more affected than the softwood mills (2 percent). “
Softwood lumber sales better than last year – hardwood strongly negative
At the beginning of the coronavirus crisis, lumber sales fell sharply in both softwood and hardwood. In the course of the crisis, the softwood companies were able to compensate for these failures and for the first time increased their sales again in September. The situation is different with the hardwood sawmills: Here the negative trend has perpetuated. This is not only due to the stronger (overseas) foreign business, which has collapsed disproportionately, the high incidence of calamity wood also led to a substitution of hardwood with softwood, especially in the packaging area.
Sawmill byproducts and credit insurance as increasing problems
Across almost all the areas surveyed, the companies rate the effects of the coronavirus pandemic on their business operations as significantly less negative than in the last survey at the end of April (18th calendar week). Only sawmill sales and log logistics were rated worse. The number of corona cases in the companies has not increased significantly either; so far, no company has had to be closed. “This shows that the companies have handled the rules of conduct and hygiene very carefully,” says Schmidt. A new problem is emerging in trade credit insurance. The two largest credit insurers in the sawmill industry have announced that they will significantly reduce their business from January 1, 2021. This affects 60 percent of the companies surveyed. “For the companies, the elimination of insurance coverage means further uncertainty about the current difficult market conditions,” concluded Schmidt.
The post Germany: Hardwood and softwood industry impacted differently by the corona crisis appeared first on Timber Industry News.