June 13, 2017
Last week, I was fortunate enough to attend the Interzum trade fair in Cologne where some of our downstream users presented their latest innovations to the furniture industry. The European Panel Federation (EPF) seized this opportunity to present the preliminary results of their upcoming annual report 2016/2017. Paolo Fantoni, the EPF President, also shared his vision on several important developments for the panel industry. This month, we digest the key takeaways for you.
Wood availability is a strategic focus for the panel industry. Last year, the European Commission announced a legislative package to promote a European circular economy as part of the EU growth and jobs policy agenda.
As a major producer of renewable and recycled materials, the European Panel Federation has been on the front line explaining to policy-makers the importance of wood for the European manufacturing sector. Following a year of political negotiations, Paolo Fantoni has welcomed the proposal for higher targets in the Circular Economy Package aimed at increasing the use of recycled materials.
The recognition of the “cascading use” of wood (prioritising the value of wood by utilising non-fuel uses first i.e. burning wood for energy only after it has been used, re-used and recycled as a material ) as a core element of the new legislation on waste is the most important expected qualitative improvement in his view. It also a first step towards harmonising national practices behind this guiding principle.
Paolo Fantoni stressed that this legislative improvement is even more important in a context where customers are aware of the high quality of panels made from recycled materials. The perception among the customer base has changed over the past few years, as it has done in the past with paper, and the panel market continues to send very positive signals in this regard.
In the first months of 2017, the panel industry observed the impact of the coming US EPA standards in Europe. Major players and distributors have expressed their desire to deal increasingly with CARB2 panels in order to facilitate the management of their stock. This new reality will be an ongoing discussion between wood panel manufacturers and the main distributors going forward.
The preliminary results of the EPF Annual Report confirmed an improvement in 2016, driven largely by growth in the construction sector. As overall capacity continued to strengthen gradually in 2016, an increase in production took place for all product types, with the exception of hardboards. Total European production has increased by 1.7 million m³ to roughly 55 million m³, confirming a positive trend and continued recovery of the industry.
The strongest growth was observed in the OSB segment (+7%) compared with the previous year, followed by the softboards (+4%) segment. MDF and Particleboard production both increased by approximately 1% in 2016, while plywood production is estimated to have increased by 2.5%.
The outlook is also positive. Indicators in the construction sector are very encouraging with Euro construct predicting growth of 6.8% in 2017 and 5.3% in 2018. Today, an estimated 33% of the 55 million m³ are used for the construction sector.
Please note that all the above figures remain provisional. The final results will be announced at the June EPF General Assembly, which will take place in Porto on 29 June 2017
On the whole, the outlook is positive for the wood-based panels industry with promising policy and market dynamics. Looking ahead, we expect significant developments in the coming weeks with the publication of the final risk management option analysis on worker health and safety by ANSES. As always, we will keep you informed and up to date with the latest and most relevant developments.