Another look at thermally & chemically modified woodFriday 13 Dec 2013 Is modified wood on the cusp of a market invasion, or dying a slow and painful death? Currently, there are two techniques for modifying wood: Thermal modification (heating the wood in low oxygen conditions) and Chemical modification (impregnating the wood with chemicals within a vacuum pressure tank).Modified wood products are generally more expensive than traditional “outdoor” woods such as cedar and pressure-treated southern yellow pine (SYP), but less expensive than hardwoods. Manufacturers tout their products’ aesthetic qualities and eco-friendly attributes as key selling points. A number of these new products have yet to make a profit, and manufacturers of others have quietly exited the marketplace. AccSys Technologies’ annual reports indicate that its Arnhem factory is running at only 50% capacity. Eastman Chemical recognized a US$17 million restructuring charge on its Q4/2012 annual report to account for “inventory costs in excess of recoverable value.” In an interview with U.K. magazine TTJ, Kebony admitted that the company’s manufacturing plant has yet to make a profit. Other producers have had to cancel product lines, supply partnerships, and/or distribution agreements. In the U.S. especially, the structure and culture of the building products market have made it difficult for modified wood to gain a toehold. The two-step distribution process has contributed to a slow uptake of new products, as recession-weary distributors have had little cash to spend building inventories for multiple or new product lines. Furthermore, most modified wood manufacturers are relatively small in comparison to their customers and competitors (think Home Depot and Trex), and as such are at multiple disadvantages. Both builders and large distribution chains tend to favour large, well-established firms that can supply multi-region or even continent-sized territories, and honour warranties. In addition, in a crowded marketplace, small producers have a hard time competing with their deep-pocketed rivals for market recognition. In the European marketplace, manufacturers are counting on the recently adopted EU Timber Regulation (EUTR) to provide a window of opportunity for modified wood products to break into the market, replacing tropically sourced hardwoods. Given that many tropical timber-producing countries have yet to sign FLEGT (Forest Law Enforcement, Governance, and Trade) Voluntary Partnership Agreements (required for export to the EU), shortages of tropical wood are expected. In addition, the environmentally friendly nature of the products (non-toxic chemicals, FSC-certified timber) has been widely touted. Modified wood producers face a tough business environment. A lack of economies of scale puts them at a cost and market disadvantage, and new products have often lost money over their first few years in production. Modified wood has key advantages of being long-lasting, durable, dimensionally stable, aesthetically pleasing, and environmentally friendly. However, it is relatively expensive and has a niche application at the high end of the market, where performance is required. Succeeding in the marketplace will require identifying a customer base that appreciates — and is willing to pay for — the wood’s superior qualities. Source: International Wood Markets Group, www.woodmarkets.com . |
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