It is easy to look at Scottish or UK business sectors from a narrow, domestic viewpoint and forget the global context in which they operate – mega-trends that have real relevance for Scotland.
Forestry and timber is no different and at the recent conference on realising the potential of Scotland’s indigenous industry, I provided some international context which highlighted the successes of the domestic sector, but also the need for its further development.
The first very basic point is that there is increasing global demand for timber. This has been created by a number of factors, including the post-recession recovery of the US housing market, which is largely wood-based. However, by far the most significant factor is the enormous demand for timber and fibre from the rapidly-growing economies of Asia, notably China.
Asia is “hoovering up” any substantial timber supplies coming onto the world market. China alone is importing more fibre (essentially all wood products, including logs, pulp and paper, and woodchips) every year than is produced by the behemoth of the Canadian forest industry.
In addition, forestry and forest products are increasingly recognised as central to a sustainable global future, and wood has a very important part to play in the future of construction.
Buildings are a major source of emissions and account for around 40 per cent of total energy consumed in the European Union. Analysis has shown the carbon load of wood buildings is much lower over a building’s lifecycle. Wood has the ability to act as a carbon sink and has a far, far lower environmental impact than other building materials like steel, brick and concrete.
As a result, regulations and design trends are encouraging and reflecting the enhanced use of wood in construction, adding to demand.
There has also been a major growth in the use of wood for renewable energy. Woody biomass is crucial to the achievement of EU renewable energy targets, but the amount required exceeds Europe’s capacity to supply, leading to significant imports of wood pellets from North America.
There is uncertainty around how this area will develop, but it is contributing to a clear global picture for the forestry and timber sector – of demand increasing strongly, creating greater interest in where future supply will come from. There are emerging, geographical imbalances, with Asia the most extreme “deficit area” but with Europe( outside Scandinavia) in tow.
Pressure for greater supply could very well create renewed pressure on the world’s indigenous woodlands, a big geopolitical and environmental challenge. Scotland has a responsibility to develop its own resources and not rely on utilising those of others.
However, there are enormous opportunities – as well as major challenges – from these global mega-trends.
The clear opportunities are for those who can supply timber and timber products into a high-demand market and the financial opportunities arising from that.
The challenges are around securing sufficient wood, getting the best value use from forest resources – and securing investment capital and skilled people.
In places like Brazil, a forestry and timber career is viewed as desirable and high-status. In Scotland, it does not have the same level of respect and we need to bridge the gap to ensure the flow of talent needed to capitalise on a booming industry.
For a country like Scotland the economic backdrop of the global industry is very significant. Domestic production in the industry has increased in recent years, with output up 40 per cent since 2000 – higher than the 30 per cent UK growth and way above the 3 per cent growth across the EU in the same period.
This growth in domestic output has helped displace an estimated £1 billion of imported timber every year in the UK as a whole. On a world scale, the Scottish forest and timber sector is small – but it is productive and expanding, supporting 40,000 jobs and adding £1.7 billion in annual value to the economy, bringing jobs and investment to Scotland’s rural areas. With growing markets and strong investment in modern processing by companies like Glennon Brothers, James Jones & Sons, and BSW, there are very solid foundations for further growth in the medium and long-term.
In the coming decades, strong demand – both domestically and globally – makes it imperative to expand the existing Scottish forestry and timber sector. The parallel growth of the low-carbon economy and an ever-stronger focus on sustainability will place even greater demands on wood, fuelling further demand and making this expansion essential.
In order to achieve this, more productive planting is needed now. This is the only way to continue growing the sector in the long-term, and placing it in a positive position as the global forestry and timber sector enters a period of challenge – but also great opportunity.
• Clive Suckling is an independent adviser to the forestry and timber sector who spoke at the forestry conference organised by Confor www.confor.org.uk