EU Snapshot of the pallet and packaging industry FEFPEB CONGRESS INTERPAL VIII Bordeaux

EU Snapshot of the pallet and packaging industry

FEFPEB CONGRESSINTERPAL VIII

Bordeaux

18 October 2013

http://www.hager.fr/

COHESIUM France – INTERPAL VIII, Bordeaux

1 – Table of contents2

► Research objectives and methodology

► General overview of the EU pallet industry

Pallet industry data

HT & KD

► European Market trends

Main market trends

Specific market trends per country

Research objectives and methodology


4Research objectives

To better understan

d the wooden

pallet market across Europe

Qualitative and

practical overview

of the wooden

pallet market in

EU

To see national wooden

pallet market

perceptions in EU

Wood vs. other

materials (plastic, metal)

To foresee future

challenges on the EU

market


5Methodology

12 key pallet manufacturers, repairers

and timber sawmillers were interviewed per

countryEach interview lasted from

45 minutes to 3 hoursDatabase provided by national federations

General overview of the European pallet industry


7General overview of the European pallet industry (1)

EU Wood packaging industry

WPM = shipment of 90 – 95% of goods

WPM sector ≃ 8.6% of the woodworking industry24 million m3 of timber

used per year ≃ 20% of EU sawn timber

Pallets ≃ 75% of total WPM production

Industrial and light-weight packaging ≃ 25% of WPM

There are significant variations per country depending on pallet and packaging industry and availability of wood.


8EU Heat Treatment Capacities (2)

•Italy (45%), •France (50%), •the United Kingdom (57%)

1. Capacity to HT ≃ ½ total annual

productions

•Belgium (70%), •the Netherlands (75%) •Germany (80%)

2. Capacity to HT ≃ 2/3 total annual productions

•Spain ≃ 20% of the new pallet production•20% of Spanish companies produce 70% of national production : HT capacity ≃ 100% of their productions

3. Capacity to HT < 1/3 total annual

productions


9EU Kiln Drying capacities (3)

Around 20% less than HT productions

KD methods & reasons

Mainly through probes drilled

inside the wood

Some brands


10

Types of energy used to power kilns (4)Source : FCEC report and interviews

European market trends


12 Main market trends

Main strengths

• Capacity to adapt to clients’ needs (Production flexibility and deadline observation),

• Ability to meet clients’ demands in quality and volume,

• Diversification strategies used regarding supply and services,

• Wooden pallet supremacy versus competing materials in general

Pallet Repairers : • Possibilities to collect used pallets abroad, • increase of repaired pallets demand because of

clients’ willingness to reduce usage charges


13 Main market trends

Main challenges

• General economic downturn,• Pallet production overcapacity and saturated

market,• Highly competitive market regarding selling

prices,• Profit margin reductions • Lack of loyalty to companies in highly

competitive markets• Plastic pallet development, • Strong competition with pallets/timber

imported from Eastern European and Scandinavian countries

• Competition of biomass fuel• Vast majority of pallet repairers that are not

registered (underground economy)


Main challenges

Timber sawmillers : • sawmill

concentration,

• expensive cost of log supply,

• risk to reduce pallet timber availability on markets

Pallet manufactur

ers: • Industry

essentially made of SME and

large leading groups,

• inability to HT all pallet

productions,

Pallet repairers : •Vast majority of pallet repairers that are not registered (underground economy)

14


Germany

Current situation in Germany • German group leaders important in Germany and in EU• 60% of pallet timbers imported from Scandinavia and Eastern Europe• New pallet share : 25% ≃ ; repaired pallets share : 75 %≃• 84.8 million new pallets produced in 2012• Theoretical capacity to HT all pallet productions• Number of KD pallets > number of HT pallets• Strong competition between national companies • Strong competition with pallets imported from Eastern Europe• Logging limitation with annual quotas, • Competition coming from biomassStrategy

• External growth forecasted : development of big German leading groups in Europe

Perspectives and future

• To follow client production outsourcing in foreign countries• Rise of pallet exports in neighbouring countries

15


Spain

Current situation in Spain• Government willingness to reforest• 1.5 million m3 of WPM imported / year (mostly from France)• 35-40% of Spanish timber sold to the WP sector• 20-25 million pallets produced in 2012• Limited number of leading companies : 20% of pallet manufacturers produce

80% of the total number of pallets• Inability to HT all pallet productions• Financial difficulties and companies in debt• Companies wish to save family businesses at all costs• Vast majority of pallet repairers that are not registered (underground economy) Strategy

• National industry mainly made of SME• Alliances and wood supply partnerships between timber sawmillers and pallet

manufacturers


• External growth is not a priority• Low exports towards neighbouring countries• Development of Biomass energy and pooling 16


Italy

Current situation in Italy• Nearly non-existence of timber sawmillers and outdated operations• Lack of timber resources on the mid and long run (few forests)• Countries dependent on timber imports • 80% of timber used imported from Germany, Austria and Eastern Europe• Production of 92.6 million new pallets in 2012• Inability to HT all pallet productions• Competition coming from biomass• Financial difficulties and companies in debt• Companies wish to save family businesses at all costs• Vast majority of pallet repairers that are not registered (underground economy) Strategy

• National industry mostly made of SME


• External growth is not a priority• Low exports towards neighbouring countries• Development of Biomass energy 17


The Netherlands

Current situation in the Netherlands• Leading position of a few Dutch companies in Europe• Nearly non-existence of timber sawmillers and outdated operations• Lack of timber resources on the mid and long run (few forests)• Companies dependent on timber imports• 90% of timber used is imported from Germany, Scandinavia and Eastern Europe• Production of 18 million new pallets in 2012• Inability to HT all pallet productions• Companies facing financial difficulties • Strong competition with pallets imported from Eastern EuropeStrategy

• External growth forecasted : development of Dutch leading groups in Europe


• Repairing and pooling developments (20% of the market)• Strong plastic pallet development• Possibilities to collect used pallets abroad and to export pallets in neighboring

countries18


The United Kingdom

Current situation in the UK• The top 6 companies supply a high % of the market but there are many small

volume pallet producers, • Concern about timber resources in the mid and long run - Replanting issue that

Timcon and other foresty associations are addressing• There are significant reductions in Baltic timber in recent years and homegrown

timber now supplies over 80% of timber for the UK pallet market• 1/3 of the British resinous production used for wood packaging• 1.55 million m3 of timber used in 2011• 30.44 million new pallets produced in 2011• 41.5 million pallets repaired in 2011• 10.6 million pallets HT in 2011• Only 1/3 of TIMCON members have kilns : inability to HT all pallet production

Strategy

• External growth forecasted : development of British leading groups


• Sawmillers’ focus on higher value added products, different from pallet timber depending upon UK market conditions

• Pallet pools have very high share of UK food & beverage market 19


Belgium

Current situation in Belgium

• Lack of timber resources on the mid and long run (few forests)• Country dependent on timber imports • Limited number of sawmillers• Inability to HT all pallet productions• Strong competition with pallets and timber imported from France, the Netherlands and Eastern European countries• Leading position of a few Belgian companies in Europe

Strategy

• Restructured pallet manufacturing industry (market mostly made of big groups, few mid-sized pallet manufacturers remain)• Increasing trends of recovery of used pallets from clients’ premises • Many pallet dealers


• Possibilities to collect used pallets abroad and to export pallets in neighboring countries

20


France

Current situation in France• National industry mostly made of SME• 54 million new pallets produced in 2012• Reused pallet market share : 75% (Pallets reused on the market, not necessarily

repaired)• Market that used to be focused on pallet producing . Now it tends to offer more

a global service where pallet is just an element.• More than 90% timber used is French. Procurement radius : 63% comes from a

distance < 100km • 32% newly produced pallets are HTStrategy

• Restructuring pallet manufacturing industry• Diversification of services associated with pallets (i.e. : recovery of used pallets

from clients’ premises, etc.)


• Necessity to adapt to timber prices• Competition of biomass energy• Research of innovative solutions to improve and develop new services about

pallets (i.e. new ways to measure pallet mechanical resistance) 21

Merci

Documents

EU Snapshot of the pallet and packaging industry FEFPEB CONGRESS INTERPAL VIII Bordeaux