Lauchlan Wright

Wright Forest Products

When asked to take off your corporate hat and visualise where you see our industry heading into the next two years, it’s not an easy thing to do.

We have enjoyed five strong years in the industry, and now we are seeing the downward part of the housing cycle, which ultimately drives our industry.

But how far will it go? Will it be a ‘J’ curve or an ‘S’ curve or worse or maybe this is the bottom as the ANZ Bank is suggesting?

A hard or a soft landing but even more important, how do we predict change?

Changes in supply, new products and solutions to old problems, new players arriving and some older ones departing can never be predicted for sure.

One thing is for sure, ‘corporatization’ and globalization at all levels of the industry from the tree to the house builder will continue.

With this will bring change; disaster for some and opportunity for others.

A look at the recent past sets the benchmark. Departed; unseasoned hardwood for framing and subfloors; Ash for mouldings and skirtings; and Western Red Cedar for cladding and panelling and where did that huge Douglas Fir business go, and what about Jarrah and Karri for F17 and moulded product.

New kids on the block include sustainable high quality softwoods for cladding and joinery from Europe including Thermowood heat treatment process for durability and stability.

Mass volume engineered products like Glulam and “I” Joists from new high tech high capital cost manufacturing plants off shore and here in Australia too.

Mass volume finger-jointed products, new treatments and priming are now commonly accepted.

All these innovations are working towards more efficient use of materials, better manufactured, but most importantly delivering the customer a competitive and superior product than the competition.

Competition will improve products and services in the next two years. Competition will be relentless as we see static consumption at the tail end of the building boom.

I see ever increasing production at the milling and processing level both domestically and internationally. The profound change will be the changes in the channels to market.

Big boxes, specialist timber retailers and trade centres are continuing to change the merchant landscape.

Now there are a few dominant mass volume building companies with still a large part of the segment retained by specialized and boutique builders.

In the next two years we will see the emergence of multinationals entering the building and building supply market, although this may be restrained if the building cycle continues to remain static.

More sophisticated and technically advanced building materials will require the manufacturers to get the message to builders and specifiers, a task formerly that of the traditional timber merchants.

For that I see the manufacturers who will win, will be focussed not so much on reducing the cost per cubic metre, but getting the Brand and its product advantages to the specifier or designer and delivering it at the lowest possible cost to the customer.

Timber and wood products are growing in favour by many users in the world so there will always be that growing base demand.

Marketing and product innovation in its many forms, and improved distribution channels including the Internet will be the big influences over the next two years.

The ever increasing size of production units and smarter building techniques will continue to present opportunities in the timber industry for large players and small alike.