1. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Hardwood Markets in Europe and United States in 2002 and 2003 By Ed Pepke Project Leader Forest Products Marketing Programme UN Economic Commission for Europe and Food and Agricultural Organization Geneva, Switzerland

2. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Bim-vindos a Lisboa! (Welcome to Lisbon!)

3. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Program Hardwood markets: US and Europe Promotion and issues Panel discussion on above Hardwood consumption realities Panel discussion Dimension and component opportunities Breakout sessions by country groupings Country reports in plenary

4. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Announcements Turn off mobile telephones, please Governed by US anti-trust laws Speakers requested to respect timing Audience requested to respect timing too Hold questions for panel discussions

5. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Content of presentation Overall market developments, 2002 & 2003 –Overall –Hardwoods –Certified forest products –Other forest products markets Hardwood production, consumption and trade Promotion necessities

6. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Sources of info UNECE/FAO TIMBER database (forest products statistics) FAOSTAT Forestry Database website UNECE/FAO Timber Bulletin, “Forest Products Annual Market Review, 2001-2002” Timber Committee market forecasts and statement, 2002-2003

7. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Overall market conditions, highlights of Forest Products Annual Market Review, 2001-2002 Viable forest products markets, supported by policy reforms, underpin sustainable development in some central and eastern European countries (CEECs). Following 10 years of growth, consumption of primary-processed forest products in the UNECE region declined sharply in 2001. Consumption of wood products in the CIS, notably Russia, gained 7% in 2001.

8. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Overall market conditions, highlights of Forest Products Annual Market Review, 2001-2002 North American markets were buoyed up by extraordinary strength of US housing-related demand for wood products. Market effects from Europe’s 1999 windstorms still affected markets. Strong US$ influenced 2001 markets, and weakened $ in 2002 is changing competitive positions and trade. Structural change in US and western European furniture manufacturing.

9. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Overall market conditions, highlights of Forest Products Annual Market Review, 2001-2002 Certified forest product markets growing, but remain small compared to surge in certified forest area. Panel markets expanded in 2001, achieving new records for OSB and MDF. Cross sectoral policy issues directly influence forest products sector.

10. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Timber Committee Market Statement General Forecasts for 2002-2003 Following record levels in 2000, a downturn in forest products markets occurred in the UNECE region in 2001. Weak economic conditions in North America and Europe persist in 2002. Central and eastern European and CIS (ex- USSR) forecast rising consumption, production and trade. Slight improvement forecast for 2003.

11. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Timber Committee Market Statement General Forecasts for 2002-2003 Encouraged countries to work together to achieve maximum benefits from promotional efforts. Promoting sound use of wood is important to maintain and increase wood’s market share. International approaches to wood promotion are importaqnt to ensure sustainable markets, a vital component of sustainable forest management.

12. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Certified Forest Products

13. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Timber Committee Certified Forest Products Forecasts for 2002-2003 Certified forestland increased by 25% in UNECE region in 2002. 90% of world’s certified forests are in the UNECE region. Most of the markets for CFPs are within the region.

14. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Timber Committee Certified Forest Products Forecasts for 2002-2003 Current problems include weak market demand, lack of mutual recognition, lack of chain of custody. Many products from certified forests are being sold without labels.

15. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Timber Committee Hardwood Lumber Forecasts for 2002-2003 US exports forecast to leap 22% in 2002. US exports to reach record 3.2 million m 3  Largest export market for US is now China. Some US exports reimported in furniture. More optimism in central and eastern (CEECs) than western Europe. Value-added exports increasing for CEECs and tropical countries.

16. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Hardwood lumber (also known as sawn hardwood)

17. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Hardwood highlights of Forest Products Annual Market Review, 2001-2002 Total sawn hardwood production in the UNECE region declined in 2001. Sawnwood production increased significantly in central and eastern European countries. Production remained constant in western Europe. Drop in western European production attributed to 1999 windstorms oversupply.

18. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Highlights of Forest Products Annual Market Review 2001-2002 Exports for the UNECE region were down by 5%. UNECE region imports of sawn hardwood in 2001 were down by 6%. Apparent consumption in the UNECE region fell from its 2000 peak. Central and eastern European countries consumption of sawn hardwood is increasing.

19. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Highlights of Forest Products Annual Market Review Events of 11 September 2001 accentuate reduced demand. Rapid development of Asian furniture industries affecting hardwood trade and furniture production in UNECE region. Markets affected by currency exchange rates. Environmental issues, certification, legality, getting press.

20. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Europe: Sawn hardwood

21. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Europe: Hardwood lumber

22. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon North America: Sawn hardwood

23. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon North America: Hardwood Lumber

24. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon USA Hardwood Lumber Forecasts

25. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon USA Hardwood Lumber Forecasts

26. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Comparison to other forest products markets in 2002-2003

27. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Europe: Softwood lumber

28. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Europe: Softwood lumber

29. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon North America: Softwood lumber

30. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon North America: Softwood lumber

31. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon North America: Paper and paperboard

32. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon North America: Paper and paperboard

33. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Europe: Paper and paperboard

34. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Europe: Paper and paperboard

35. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Europe: MDF

36. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon North America: MDF

37. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon North America: Particleboard

38. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Europe: Particleboard

39. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Promotion of forest products

40. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Annual change in forest area, 1990-2000 N & C America South America Europe Asia Africa Oceania

41. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Forest resources summary Removals considerably below growth in UNECE region. Wide variance in utilisation rates of NAI. Growing stock increasing in Europe. Oversupply compared to demand for wood. Increasing alternative demands on forests.

42. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Growing too much wood? Not enough wood products demand? What are the solutions?

43. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Grow the wood markets ! Guarantee that today’s wood products meet consumers’ needs Develop new products to meet evolving needs Develop new markets for wood products (substitute for non-renewable materials)

44. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon How can we grow the wood markets? Through coordinated, international promotion programs Example: the FAO-ECE Forest Communicators Network creates a positive image of the forest and forest industries sector by: –networking among members –identifying key common messages and concepts –building of PR capacity

45. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Findings on the market effects of wood promotion from Forest Products Annual Market Review Attitudes influenced by cultural and technical dimensions Credibility is important quality Key elements of promotional work –Competence –Neutrality –Sufficient financial resources

46. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Findings on the market effects of wood promotion from Forest Products Annual Market Review Fund raising a problem in fragmented industry Multi-country promotions must overcome cultural differences Wood promotion is a success story!

47. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon 2001 Timber Committee Market Statement “In light of the economic downturn in 2001, the Timber Committee stated that it is imperative to develop new products to expand existing markets and to establish new markets to meet consumers’ needs. The Committee reasserted the importance for the forest products industry to work internationally to promote the environmental advantages of the sustainable production of wood.”

48. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon 2001 Timber Committee Market Statement “The Committee discussed the need to increase the wood culture in the UNECE region. Delegates mentioned on-going national and subregional campaigns to promote the use of wood. The Committee suggested coordinating efforts in order to achieve greater success.”

49. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon 2002 Timber Committee Market Statement “Encouraged countries to work together to achieve the maximum benefits of their promotional efforts. Multi-country promotion of the sound use of wood is important to maintain and increase wood’s market share.”

50. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon 2002 Timber Committee Market Statement “Many effective communication strategies can be shared through collaboration between countries, trade associations and promotional groups. These international approaches to wood promotion are important to ensure sustainable markets which are a vital component of sustainable forest management.”

51. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Convention Summary

52. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Major themes Portugal: nation of vision US hardwood manufacturing restructuring –Changing export markets –Evolution in domestic market –Costs rising faster than prices –1.8 million homes using more hardwoods

53. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Major themes Global forces on hardwood markets –Fashion business –Acceptance –Viability –Environmental issues Business environment Forest

54. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Major themes Increasing value-added production Shifting markets Domestic consumption increasing in developing countries Illegal logging to affect hardwood trade Political issues working in wood’s favor

55. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Major themes Economic development important in environment development Enhanced use of wood Challenges & opportunities for dimension Shifting production for cost savings

56. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Recommendations Influence decision makers Develop image Influence fashion Repeat positive messages about hardwoods to decision makers Continuous engagement in int’l processes

57. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon Recommendations Necessity of cooperative international promotion Promote enhanced use of wood Promote alternative products and species Listen to European’s market needs

58. American Hardwood in Europe 10 th AHEC Convention, 24-25 October 2002, Lisbon La fin