Finnforest's Rod Allan: securing the supply chain.

Finnforest responds to market challenges

Published:  05 December, 2011

LONDON: Finnforest hosted a 'meet the press' day last week at which it shared its predictions for the New Year about how it will be proceeding and what the timber market will be like in 2012.

"Although some elements of the market have stabilised, such as housing starts, other areas such as public sector expenditure and RMI have declined which has resulted in an over-decline in market volumes," said managing director Rod Allan "The key challenges for us have been managing the cost base against this decline."

Mr Allan explained that investments in technology, in particular SAP enterprise systems and radio frequency management of stock and warehousing have facilitated cost reductions. "These have been considerable investments in development over the past 10 years and although the Tilbury closure was a difficult step to take, it was a positive step as these enterprise systems allowed us to be efficient and operate on a smaller footprint when future growth comes."

According to Finnforest, the biggest challenges facing merchants this year have been the declining market. "Naturally, competition intensifies as everyone fights for a slice of a market that has got smaller," said Mr Allan.

"Supporting merchants through both buoyant and tough times is always a key focus for us and will continue to be. 

"Marketing support has remained strong and our service offering has had to adapt – as merchants wish to hold less stock they want suppliers to deliver little and often. Availability is key and availability of raw material is crucial. 

"As a vertically integrated company our access to raw material is unrivalled and security in the supply chain has been a challenge this year and will continue in to next."

The company's plans for the coming months into the New Year will be focused on security of supply. "The warm weather being experienced across Europe at the moment has prevented many early harvests taking place," Mr Allan explained.

On the economic front, "recent news about the increased availability of lending, in particular for mortgages, is a positive sign and should have a positive impact on housebuilders. That should filter back through to merchants, so there are some positive signs," he said. 

Finnforest, he added, was wellpositioned to take advantage of any upturn in business. " We are ready to support our customers when it happens," Mr Allan concluded.

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