The news earlier this week that the major Austrian producer of cross laminated timber and other solid laminate timber products, Binderholz, had agreed a takeover of the UK’s largest sawmill operator certainly came as something of a surprise to those of us who try to keep track of developments in this fast expanding sector of global construction.
It wasn’t clear from the initial press release what the bigger intentions behind this corporate move were: sure, Binderholz might have made this move in order to ensure security of timber supply in a wildly fluctuating marketplace, a not inconceivable reason when its international manufacturing activities surely cannot continue to be serviced from Tyrolean forests alone. The company has been investing heavily of late in expanding its operations in the USA, taking over a number of sawmills there but its end game - indeed its specialism and its position in the marketplace - is based on its position as an international leader in CLT manufacture and supply.
The world has changed dramatically over the past two years and although the company remains competitive with North American manufacturers - even though it has to ship its product all the way across the Atlantic - the impetus towards localised manufacture is a direct consequence of concerns over the climate emergency, embodied carbon emissions, etc. and are ones that require innovative and urgent action to remedy. For Binderholz and other European CLT manufacturers, the USA is fast emerging as the most important global market for engineered timber products and one in which the number of indigenous producers is constantly increasing. To be a player in this market, you clearly need to be there and be seen to be there: the US internal market is nothing if not hugely competitive.
Binderholz is, however, one of the most experienced operators in the CLT world and has grown over the past decade into a world-leading player. It is in this context that its takeover of BSW needs to be understood. The UK market for CLT - despite the regressive legislation affecting residential timber construction introduced in England and Wales following the Grenfell Tower tragedy - continues to grow apace, but the same supply and embodied carbon issues referred to above apply even more so in the UK where, in its post-Brexit condition, a range of factors are proving problematic for mass timber construction. These can quickly be summarised as manufacturing time lags, shipping delays, port and distribution problems and exponentially increasing timber and transportation costs.
Taking each of these in turn, the largest manufacturers exporting to the UK - Binderholz, KLH and Stora Enso - are, to a certain extent, victims of their own success and needing to operate around the clock from multiple manufacturing facilities to meet international demand. Inevitably, the timescale to meet all orders has become protracted.
Then there is the additional problem of supply: transportation within the European mainland is relatively straightforward, with the bulk of CLT used in the UK coming from the continent’s CLT manufacturing heartland of Austria Southern Germany and Switzerland, with Finland, France, Spain, Sweden and the Baltic States making up the balance. Much of this material arrives through the ports of Felixstowe and Immingham, with recent delays at the former very publicly highlighted across the UK’s news media. Shortages of HGV drivers has meant containers being stockpiled at the port, so much so that some of the major shippers such as Maersk, have been rerouting their massive container carriers to Rotterdam.
So, back to Binderholz’s decision and the interview in Holzkurier with the its owner, Reinhard Binder which makes the company’s objectives crystal clear: with 9 sawmills in the UK and Latvia and a proposed sawmill in Austria’s neighbour Slovenia, BSW already has a a highly integrated processing system for softwood and, unlike Binders acquisitions in the USA, an existing experience management team. The total output of softwood from the combined operations amounts to 4.8 million cubic metres - about the same as Stora Enso, but when its sawmills in the USA come fully on stream, Binderholz’s annual output at around 5.2 million cubic metres will make it the number one European producer.
What difference will this make in the UK?
Again, the words of Reinhard Binder: “The establishment of CLT production is our top priority. Producing CLT with our own sawn timber in Great Britain is therefore the motto.”
Prior to the takeover announcement, BSW was already involved in (successful) small-scale trial production of CLT from Sitka spruce using the vacuum press at the Construction Scotland Innovation Centre. It will be interesting to see how long it takes for Binderholz to bring its considerable experience, business panache and highly automated production processes to bear in the UK.
So, could this be a game-changer for UK forestry, timber processing and manufacture?
Absolutely. Production of a high added value construction product from renewable local resources: what’s not to like?
Will it change UK construction from its stubborn dependence on traditional methods?
Possibly, but it will likely take some time - and for architects and engineers to be fully trained to maximise the opportunity presented by local manufacture of a well-established modern timber technology.
Will it force revision of outdated regulations and the recent introduction of legislation antipathetic to all forms of timber construction?
Yes, if objectivity, rationality and demand can be made to prevail over vested interests. Considerable energy is being expended to address the former, with highly experienced practitioners such as Waugh Thistleton Architects and dRMM leading the CLT charge in the UK. Now with Binderholz’s pro-active initiative and vision likely to join the vanguard of this endeavour, now is perhaps the time when we might justifiably begin to feel optimistic.
Peter Wilson, 22 October 2021