EUCALYPTOLOGICS: GIT Forestry Consulting Information Resources on Eucalyptus Cultivation Worldwide: Galician Timber Industry: over 500 Million € Lost due to Global Crisis

Impacts of the Global Crisis on Galician Roundwood Harvests & Timber Industry Productivity

Gustavo Iglesias Trabado

GIT Forestry Consulting SL - Consultoría y Servicios de Ingeniería Agroforestal - www.git-forestry.com - EUCALYPTOLOGICS

As the worst of the crisis starts to dissipate in the financial markets and optimism messages are spread worldwide to reboost the global economy, we frequently forget that certain productive sectors experience delayed and longer lasting effects than the purely financial. Timber, an always scarce commodity processed to manufacture products you and I use everyday is no exception.

Galician Timber Industry LOST 500 Million Euro and 3300 jobs during 2009 / Effects of the Global Crisis on Galician Timber / La industria forestal gallega pierde 500 millones de euros de facturacion y 3300 empleos durante 2009 / Efectos de la crisis en la Industria Forestal de Galicia

Today, thanks to the kind input from Fearmaga, the Asociación Galega Monte Industria, the Cluster de la Madera de Galicia & Feceg, we can explore the effects of the global crisis and its impact on timber harvests and the productivity of the Galician timber industry during 2009.

Numbers are grim, but the worst is already over. Recovery is slower than for other industrial sectors, or even for the same forestry sector in other countries, but the storm shall pass. Producing roughly 50% of yearly harvested roundwood in Spain, Galician forestry will survive.

Some Macro-magnitudes

After a historic peak timber harvest record during 2008, delivering over 8 million cubic metres, two events unfolded rapidly during early 2009. By January, Biscay Bay Storm Klaus hit the Eucalyptus & Pine forests of Northern Spain en route to Les Landes d'Aquitaine in Southwestern France. As a consequence, a huge mountain of stormwood was scattered in a very short timespan over Galicia. Non economic harvest of the unexpected stock, carried on as "relief operation" hampered timber harvests during a part of the year and helped push timber prices down. In addition, Klaus stormwood entered the Iberian markets as the French government heavily subsidized the fallen pine wood.

At once, the domino effect of the financial crisis, causing the burst of the "Real Estate and Construction Bubble" in Spain stopped the demand for a varied range of products, from sawn timber for scaffolding, passing by panels and flooring, to furniture and embelishment timbers.

As a result of these and other factors timber industry activity nearly stopped for some product lines, or continued at a daily loss while timber yards were filled and product stocks accumulated.

Galician Timber Industry lost 500 Million Euro and 3300 jobs / Effects of the Global Crisis on Galician Timber / Galician Timber Results 2009, by Fearmaga, Asociacion Galega Monte Industria, Cluster de la Madera de Galicia and Feceg / La industria forestal gallega pierde 500 millones de euros de facturacion y 3300 empleos / Efectos de la crisis en la Industria Forestal de Galicia / Resultados de la Industria de la Madera de Galicia 2009 / Galician Timber Industry Macromagnitudes / Galician Timber Industry Productivity and Income / GIT Forestry Consulting SL / Gustavo Iglesias Trabado, Roberto Carballeira Tenreiro and Javier Folgueira Lozano / GIT Forestry Consulting SL, Consultoría y Servicios de Ingeniería Agroforestal, Lugo, Galicia, España, Spain / Eucalyptologics, information resources on Eucalyptus cultivation around the world / Eucalyptologics, recursos de informacion sobre el cultivo del eucalipto en el mundo

Fig. 1: Galician Roundwood Harvest, Timber Industry Productivity and Income variations for 2009. (Click image to enlarge)

The consequences, dire. Timber harvests, even including Klaus Stormwood, decreased a 22% compared to 2008. Low timber prices, decreasing industrial demand and stormwood availability paralyzed harvests during the first semester. Industrial productivity fell sharply due to decreased product demand and declining prices, with peak decreases of a 42% for sawmilling lines and 26% for wood panels and board lines compared to 2008. Only Eucalyptus Kraft Pulp productivity kept the levels of the previous year, increasing lightly a 3% thanks to more efficient handling of the industrial process, but global BEKP pulp prices fell sharply diminishing income a 22%.

The overall income of the Galician timber industry for 2009 experienced a decrease for an amount over 500 million € compared to 2008, forcing closure of industrial lines, reduced labour input needs, and the loss of 3,300 jobs.

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