Interview
Excellent relationships with customers can compensate for many turbulences
Leonhard Scherer, Sales Manager for Sawn Timber at Pfeifer, talks about the global flow of goods, active customer focus and not giving in to panic.
An ample supply of sawn timber is the basis for a booming timber construction sector. Do you think global supply to timber processors is secure in the long term?
Generally, I think so. After all, sustainable forestry acts on the principle to never use more wood than the forests can grow back, making sure that future generations have enough raw material at their disposal. However, it also depends on how strongly the timer construction industry is actually booming. In Central Europe, we will probably see adjustments in the export sector. And lower export quotas will result in more wood being delivered to processing firms.
How much sawn timber is Pfeifer using for timber construction vs. packaging timber?
Some 30 % of our entire sawmill output goes into packaging. Since our cross laminated timber plant in Schlitz went online, it has changed a little. Now, a part of the goods that we used to deliver to the construction industry or exported is now used in our own processing plants. Nothing has changed in production, however. We still sell the same quantities to the packaging sector as always.
How did the war in Ukraine affect global sawn timber flows?
Globally, the sawn timber flows have only been adjusted somewhat. Large flows between Europe and the US, for instance, have grown over the last few years. The flow of goods from Russia to Western Europe, on the other hand, is a thing of the past or has shifted towards China and other countries that still buy goods from Russia. The Scandinavian countries somewhat compensate for this loss. Siberian larch will need to be replaced by other products – some by the Scandinavian countries or local sawmills. When it comes to Europe, I expect export quantities to decrease somewhat while the domestic market remains stable. Sawn timber production has already fallen slightly and will not increase again this year, but will fall back to the level of 2021.
What role does the supply of the domestic market play at Pfeifer? Are existing customers treated preferentially?
Pfeifer is strong in Central Europe. While the overseas market fluctuates between 15 and 20 %, the Central European market is by far the largest for us. Here, we have long-standing customers that indeed enjoy a somewhat preferential treatment. However, we also export various products and ranges. And the ones the Central European market doesn’t need to this extent, are mostly exported. The Central European market is also not really interested in reject goods. Depending on range and quality, there will always be a certain portion that is exported. When it comes to higher quality products, however, the Central European markets and our long-standing customers come first.
What other benefits do Pfeifer sawn timber customers enjoy?
Generally speaking, Pfeifer is very well represented on the market with its 9 sawmills in Central Europe and Scandinavia. Thanks to our acquisition in Finland, we further safeguarded round timber supply. We offer our customers a wide range of products and produce similar ranges in several plants. This results in strong constant delivery readiness. Due to long-standing relationships with round timber suppliers, we are able to secure our raw material supply and can respond flexibly to fluctuations in demand within the construction and packaging industry within the Pfeifer Group. A further plus: Our professional sales team knows the markets and customer requirements very well. We are always open to listen to our customers’ requests. Through Euroblock, we maintain close ties to the packaging and pallet market. Logistics is another area where Pfeifer stands out: Apart from standard trucks we push inter-modal transport, establish railway connections to our plants wherever possible and use water transport as well.
The last few years were challenging for the sawn timber market. Did you learn anything important during this time?
One thing we learned is that partnerships are becoming more and more important. Strong relationships with suppliers and customers can compensate many a turbulence and provide continuity. The fact that Pfeifer has always aimed for long-standing business relationships that provide a win-win has paid off. We grow with our customers and their economical success.
Adding to this is the insight that there is no reason to panic even when markets change quickly. Despite strong price fluctuations in the last years, there was always enough wood in the end – at adjusted prices, but the markets will always change. We shouldn’t worry too much about everything.