Love of French oak by Chinese millennials driving up exports

The love of French oak by Chinese millennials have place France at world no. 2 in oak log exports to China.

Due to heightened demand of oak from China, especially from millennials who have developed a taste for high-quality wooden floors and furniture from Europe, oak tree growers in France are seeing brisk business.

Traditionally, French oak producers have sold oak logs to mills, which then cut them into lumber for making products ranging from wine barrels, furniture to coffins and floors. But now thanks to Chinese millennials who are willing to pay a premium for the wood, private forest owners have started selling logs directly to Chinese buyers who process the logs themselves, leaving many French sawmills short of wood to process.

“The problem is that oak has never been as expensive in France and we, the processors, have never had as little of it,” said David Chavot, head of the Margaritelli Fontaines sawmill.

For now, sawmills with big stocks of oak are safe but they too are likely to face problems buying new stock since they will have to pay much higher prices, said Nicolas Douzain-Didier, head of France’s National Forest Association (FNB).

He went on to add, smaller mills will lose customers and shed jobs.

“The most fragile will go under, one after another,” said Douzain-Didier.

In France, the world’s third largest producer of oak logs, nearly 26,000 jobs have a directly link with the oak industry.

By late March 2018, around 80% of French sawmills had 30% less stock than they needed to fulfill orders.

If the industry were to lose jobs, it would place French President Emmanuel Macron, in an akward position since he made made reducing unemployment a priority. While sawmill producers have appealed to him for help, a meeting organised by France’s farm minister with oak log producers and sawmill owners, earlier this year in March, did not secure a compromise.

In an effort to regulate the industry, France has imposed the placing of an “EU label” on logs coming from public forests, thereby ensuring that they are processed in the EU. However French sawmills say that the same conditions should be applied to privately owned forests as well since they account for the nearly 80% of wooded areas in France.

Oak tree growers from France, who typically cut trees that are 100-150 year old, the price rise has been a boon to them.

“They (the sawmills) need to live but so do we,” said Antoine d’Amecourt, who led the private forest owners who attended the March meeting with farm minister Stéphane Travert.

While “owners prefer the wood to be processed in France but they need to regenerate forests for the next generations”, he explained saying it made little difference where the oak is processed.

According to FNB data, the export of French oak log to China have risen by 35% in the year to January 2018 and now account for 70% of all French oak log exports. This places France as the second biggest supplier of oak logs to China, ahead of Russia and behind the U.S.

($1 = 6.3875 Chinese yuan renminbi)

Categories: Creativity, Economy & Finance, Entrepreneurship, Strategy

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