2013-07-15  facebooktwitterrss
Investment In Forestry Continues to Provide Outstanding Returns say UPM Tilhill

The latest UPM Tilhill Timber Bulletin highlights and provides a unique insight into key factors relating to UK standing coniferous timber sales such as market share, performance of the market with a view to investment and, additionally, the impact of the growth in renewable energy.

Very positive news is that UK processors continue to increase their market share which has risen from 41 per cent to 44.6 per cent by volume. This, says the report’s author UPM Tilhill’s Timber Operations Director Peter Whitfield, is a huge achievement.

Timber Extraction

He explains: “There was a dip in timber prices at the end of 2012 but there are signs of recovery in the first half of 2013. An increase in market share of nearly 4 per cent is an outstanding achievement which I believe has been helped by significant investment across the UK timber processing sector.”

Investment in forestry continues to provide outstanding returns compared to practically any other investment. In 2012 the return on investment was 18.3 per cent and over the last 10 years the annualised return was 16.3 per cent.

With the most recent forecast[ii] of softwood availability for the UK forest estate showing an increase to an average of 16 million m3 over the next 25 year period - 10.6 million m3 of this totalfromthe private sector and 5.4 million m3 from the Forestry Commission – the future looks bright for both the industry and investors.

The report highlights the impact of pests and diseases on commercial tree species, particularly the spread of Phytophthora ramorum and Dothistroma needle blight on Pines, which is forcing processors to review how they handle the potential additional volumes of these species coming to market and driving foresters to examine alternative species. It also says the Sterling/Euro exchange rate remains a crucial factor in the success of the UK timber industry.

Peter concluded: “Looking ahead there is good evidence that the level of timber market activity should continue as it has for the past few years, driven by favourable exchange rates, continued investment and growth of domestic processors, available timber and the demand for biomass.”

UPM Tilhill, established more than 60 years ago, is a national company operating from a network of offices throughout the UK. UPM Tilhill is the UK’s largest forest management and timber harvesting company. The company provides a full range of consultancy and contracting services to the forest owner and forestry investor.


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