TIMBER UPDATE March 2022

by | Mar 17, 2022

TIMBER UPDATE MARCH 2022

AKD Post & Poles to use green and gold kangaroo

It recently surprised AKD’s Post & Poles General Manager, John Browne that a prospective new customer did not realise AKD’s roundwood products are, of course, locally owned and made.  

According to Roy Morgan Research, the Australian Made logo is now recognised by 99 per cent of Australians and trusted by 92 per cent. It is currently used by more than 4200 businesses on thousands of products sold all over Australia and the rest of the world.  

The Australian Made logo is in particularly high demand currently as Australians deal with the impact of COVID and on-going supply issues. In 2021, the brand garnered record levels of interest with monthly applications to use the logo up around 300 per cent compared to pre-COVID rates.  

AKD Post & Poles businesses are amongst those recent applications and following its approval last month to become an Australian Made Campaign Limited licensee, the AKD Post & Poles businesses can now ensure every customer – and their customers’ customers – know about the local product.

AKD’s Post & Pole products are used as rural fencing solutions and also as vineyard posts − in doing this, they protect millions of dollars of livestock, crops and grapevines across Australia. 

AKD’s two roundwood businesses include AKD Jelfor Timbers in Traralgon and AKD Portland Pine located in Heywood, Victoria.

With a combined processing experience of over 87 years, AKD Portland Pine and AKD Jelfor Timbers specialise in the production of round wood products, predominantly for the rural and semi-rural areas of Victoria, South Australia, New South Wales and Western Australia. 

Both manufacturing businesses also have reliable access to sawn products via their parent company AKD, which is the largest softwood sawmilling company in Australia. It is also unique as it remains a private family-owned Australian company.

AKD’s radiata pine post and pole resource comes from sustainably managed plantations from across Victoria and South Australia. 

The two sites have long-term supply contracts with most major forestry companies for the ongoing supply of raw materials and AKD also owns substantial plantations which can, and do, supply the AKD roundwood manufacturing sites as well.

Possible Russian trade sanctions worry importers

The Australian Timber Importers Federation (ATIF) has written to the Hon Dan Tehan MP, Minister for Trade regarding the potential negative impacts on the Australian timber supply chain and on building and construction activity if trade sanctions are imposed on Russia. At their request, the ATIF has also provided advice to the Treasury on this matter.

The Ukrainian army preparing to defend itself against Russian invasion.

ATIF General Manager John Halkett said that while the ATIF respects the moral stance that the Commonwealth Government has taken in relation to the current Russia-Ukraine situation, he believes it is pertinent to explain the serious knock-on effects of any trade sanctions against Russian timber product supply chains on the broader construction industry. The ATIF estimates that there will be substantial detrimental consequences, notably on the supply of Engineered Wood Products (EWPs) to building and construction projects if trade sanctions are imposed. 

“The ATIF estimates that restrictions on timber product imports from Russia will result in a 10 to 20 per cent reduction on employment across the supply chain. Plus subsequent delays to building activity are also likely to further exacerbate supply difficulties and put upward pressure on product and building prices,” he said.

The Australian housing industry will be faced with a significant risk should Russian timber product imports be threatened by trade sanctions, Mr Halkett said. 

“While the complexity and instability of the political scene in Europe is acknowledged, severe trade sanctions against Russia will result in substantial risks to the Australian housing industry,” Mr Halkett said.

A number of ATIF member companies import timber products from Russia, notably a range of EWPs. Collectively it is estimated that these imports supply somewhere between 40 and 50 per cent of the Australian building market demand. These products comprise of Laminated Veneered Lumber (LVL), including Formwork LVL that is an essential component of all concrete constructions in multi-residential, high-rise, commercial buildings and some civil works, and I-Joist beams.

LVL is now found in virtually every detached home built in Australia and in many commercial construction projects. Currently, there are no structural alternatives to LVL in any meaningful volume available from other sources, according to the ATIF with Australia constructing around 140,000 detached dwellings in the last 12 months, and this level of activity to expected to continue for at least 18 months.

Any sanctions placed on the Russian suppliers at a time of global timber product shortages will adversely affect the Australian economy, according to the ATIF with the federation contending that the Commonwealth Government should take these facts and associated risks into consideration in their formulation of Australia’s foreign and trade policy approach to the Russia-Ukraine situation.

A recent Industry Edge report also revealed that Australian imported wood products from Russia were valued at $80 million – with just $2.6 million imported from Ukraine in 2021, and Russia’s imports to Australia are valued at 30 times that of Ukraine.

The pattern of wood products imported from Russia has also changed over recent years according to the report, with imports more than doubling from 2020 driven by what is described as ‘other’ or builder’s wooden posts and beams – essentially structural elements of housing construction. 

In 2021 Australia’s imports of wood products were valued at $2.726 billion. Russia accounted for 2.9 per cent of this amount while Ukraine accounted for just 0.1 per cent, with likely bans on the importation of Russian wood products expected to be manageable for Australia, albeit not negligible, according to the Industry Edge report.

However a Business Insider Australia report has revealed that sanctions could see lumber prices rattled even further because Russia is not only the largest lumber exporter in the world, but its forest-product exports were worth more than $12 billion last year, according to data from Wood Resource Quarterly.