Covid, Brexit, and rising prices: Forestry figures on the last 12 months

IN a few weeks’ time it will be two years since the COVID-19 pandemic forced the UK, along with countless other parts of the world, into complete lockdowns of society and industry. Governments and health officials searched for ways to combat the deadly threat. Hand sanitising, social distancing, mask wearing, self-isolation, and furlough became the new buzzwords for us all.

The forestry sector did not escape the impact, with some parts closing down while others, deemed essential, worked on.

READ MORE: One year on: how the forestry sector has adapted to COVID-19

Throughout the pandemic, Forestry Journal has kept in touch with operators right across the sector, seeking to understand its effects on them and their businesses. Now, as we approach this two-year milestone, we have been talking to a number of them to seek their views on the following: 

1)     Learning: What has been their biggest lesson learned from COVID-19?
2)     Support: Have they taken advantage of any government grants or financial support?
3)     Future: How do they see their business performing in 2022?
4)     Impact: What do they think the impact on the forestry sector has been from COVID-19?
5)     Brexit: How has Brexit affected things?

TREE SURGERY AND HARVESTING

Operating in and around the Falkirk area, O’Neill Terrain Services offers a range of services to clients including woodland management, tree planting, milling, fencing, and thinnings. Andy O’Neill set up his business a year and a half before COVID-19 struck.

Learning: “Have more eggs in more baskets! Having opted to serve a narrow client base with high–quality and responsive services gaining lots of repeat custom prior to COVID, we have found agents working more remotely and spending less time on the ground, which means we are down on the overall volume of work and are having to up our marketing and networking.” 

Support: “We got the standard grant given to most businesses. I also saw a bounce-back loan as an opportunity to purchase some kit that would otherwise have taken a little longer to bring into service. Whatever level of the industry you operate in, it is very capital intensive to say the least, even though we are very much at the small end of the spectrum.”

Future: “We are optimistic for the future and hopeful we have weathered the worst of the storm and have come out the other side more resilient. As a business only established 16 months before COVID hit, I am grateful we have made it this far. I also feel the work we have done on the business to address our weaknesses will pay dividends in the future. Part of our plan is to engage more with the forestry community in what is a small and unique industry.”

Andy O’Neill has worked with other contractors through the pandemic and plans to engage more with the forestry community as he looks to build his business.

Impact: “I feel the industry could do more to promote local forestry and challenge the often negative perception of forestry from the general public. The term key worker is totally justified and applies to many in the industry whether they knew it or not prior to COVID.”

Brexit: “I’m sure most businesses have felt some impact from Brexit, as have most people. To me, it seems harder to get hold of machinery and spares in some cases, with longer lead times.” 

KF Forestry, based in Fife but operating throughout Central Scotland, has a foot in both forestry and arboriculture. It operated throughout the pandemic with manager Kieran Kelly happy with its workload.

Learning: “We had to learn how to plan to take account of the regulations with regards to more vehicles to travel to and from sites and the management of social distancing, PPE and staff breaks.”

Support: “We didn’t require any government support or assistance. We were fortunate to be able to keep trading.”

Future: “Two words – flat out! We are going to be fully employed on both thinning and establishment jobs. I have not had time to fully catch up on COP26 and what that means for the industry, but anything that involves trees and their planting has to be a step forward. The good news is I am currently finding no shortage of trees for establishment. I recently needed 7,500 Sitkas for a job and feared a long delivery lead time, but it turned out to only be three weeks. In addition, in 2022 we have our own nursery coming on stream so we should be even better placed.” 

KF Forestry is building a new nursery, to be ready during 2022.

Impact: “I don’t see any negatives personally. Timber prices are at their highest in years and there is a real demand for timber. It is a great time for forestry and a real opportunity for all parts of it to share in the success.”

Brexit: “I do hear of reports of some equipment taking longer to deliver. We have found that some parts are taking longer to come than in pre-Brexit times. It sometimes feels like a real lottery when you are ordering things.”

HAND CUTTING AND ESTABLISHMENT

Jonny Younger’s Hi-Line Forestry business operates from Haddington in East Lothian. 

Learning: “It hasn’t helped us learn anything other than being flexible around team members’ issues like childcare. On the days I had issues, it became about flexing and changing our plans to suit.”

Support: “As we kept working we didn’t need to use the furlough scheme. I have added a Gremo 1050 harvester to our fleet, but did not use the Coronavirus Business Interruption Loan Scheme (CBILS), opting rather for a normal loan where I had a regular monthly outgoings figure throughout the loan period.”

Hi-Line Forestry invested in two new machines during the pandemic – a Gremo 1050 harvester and a Gremo forwarder.

Future: “I see us continuing to do well, hence my investment in the harvester to accompany the Gremo forwarder that we got during 2020. This gives us the capability to harvest timber safely and efficiently with low ground impact. I predict a busy year ahead for us in 2022.”

Impact: “I think the sector showed resilience. As the mills closed, production moved to chip, and, as they opened back up, to mill logs. During COVID, we also had Brexit and that has maybe helped with fewer imports. The sector is booming now, so the impact combined has been positive.”

READ MORE: How a fresh tree planting strategy can help us diversify the UK's population

Brexit: “The only direct impact we’ve seen has been on sourcing parts for machines and equipment. Some of them are taking longer. Thankfully, we have not needed to buy new machinery as I hear that is taking much longer.”

For Mike Ramage of Mike Ramage Forestry (MRF), the pandemic has seen him both cautious and optimistic about the way things were heading at different times. MRF is an establishment business from Melrose operating across Scotland and Northern England.

Timber production carried on at KF Forestry throughout the pandemic.

Learning: “The biggest business lesson for me has been to acknowledge we are lucky enough to work in an industry where we have managed to keep going while others have really struggled. We were seen as essential and our work could go on pretty much unchanged, other than adapting to the COVID-19 rules on travel and social distancing.”

Support: “I didn’t take any of the grants or business loans that were on offer because we were able to keep operating and therefore not as affected as other businesses or sectors. I did have some guys on furlough when there was a slight dip in work but it was not for too long so overall we were very fortunate compared to others.”

Future: “In 2022, we are more or less fully booked with work. The only downside now seems to be an increase in the time taken to get the jobs signed off and agreed to allow us to get on with the planting. This definitely seems to have gotten longer since COVID-19; whether that’s because of more home working I am not sure. The other issue could be if petrol prices keep increasing, along with the cost of motor repairs, that will add to our costs, but the work is certainly in place. COP26 appears to have reaffirmed the need for tree planting, so that can only be good for us and the industry overall.” 

Impact: “If I am brutally honest, I think it probably has affected forest managers more than us. They have lost the office sounding block and working on your own all the time can obviously become a bit monotonous. There also appears to be a bit of movement of personnel within the industry, which is affecting continuity at the ground level and getting decisions made.”

Brexit: “The biggest impact has been on getting vehicles, parts, the costs of repairs and getting new machinery. I recently ordered some strimmers that I needed for a job and the earliest delivery date was a month away from when I needed them. Whether this is Brexit or the post-COVID world or a bit of both I’m not sure. One thing that will be because of Brexit is the shortage of staff in the future, with the complexity of hiring EU workers compared to before.”

SAWMILLS

The BSW K2 sawmill at Fort William shut down for a period during lockdown and then reopened. Mill manager Olly Stephen, when Forestry Journal last caught up with him, said he had experienced a lot of challenges, but was predicting busy times ahead.

Learning: “At the ground level, we learned a lot trying to digest and work through the government guidelines for keeping the business going and the staff safe. At a higher level, it became a task, which we achieved, to keep our shift patterns going and keep operating all the different machinery in the mill. Delivering upskilling and multi-skilling of our staff was a positive learning outcome.”

Support: “We had to furlough staff at varying times and used the government scheme. This was handled in the main by our group human resource function.”

A drone shot of the £2.3 m resurfacing works being undertaken at the K2 sawmill at Corpach.

Future: “We are finding the patterns of demand have now settled back to pre-pandemic levels and timings. I feel our recent takeover by Binderholz will offer more opportunities with what to do with our chip and sawdust to create more added value.”

Impact: “The sector has been buoyant for the last 12–15 months and the biggest impact we are finding is on staff turnover. People are staying for shorter periods before wanting to move on to other jobs. There is also the obvious impact on timber haulage by road, due to the shortage of lorry drivers.”

Brexit: “The driver shortage, as I said, has led us to start shipping more timber by sea. In addition, we operate a HewSaw line at the mill and have had parts on order for it, from Finland, that have taken much longer to arrive than they would have done in the past. We are also finding the cost of parts a bit more expensive than they were pre-Brexit.”

Stephen Havranek, owner and operator of James Carr and Sons sawmill near Dundee, was able to keep his mill open and operating throughout the pandemic. He put this down setting up robust COVID-19 protocols at the mill and engaging with his workforce.

Learning: “Getting the right staff has become so vital. It has been difficult getting staff with sawmill experience, so much so that I now use agency staff, if they look like they have the capability to be trained up, as they have a desire to work. The other big learning curve has been to keep up my timber stocks in the yard. In the past, I was able to get timber pretty much as I needed it. Now, with the high demand, I need to think and plan more.”

Support: “I managed to keep operating the sawmill throughout and did not need to take any loans or furlough staff (albeit there were some staff members who would have liked to be furloughed). The only extra expense we incurred was for PPE and putting COVID measures in place around the sawmill, which we are still following.”

Future: “It is manic now and I don’t see that stopping any time soon! My view is that people who have been unable to go on foreign holidays are investing in their homes and gardens, driving demand. I see this continuing through 2022.”

Impact: “I do not see any negatives from COVID-19 in the industry. Add in COP26 and the desire for more tree planting and I feel things are good.” 

Mixed hardwood destined for the railway sector at the James Carr and Sons sawmills

Brexit: “Paperwork and red tape is my experience of Brexit. So much so that I have stopped supplying timber components to the railway sector in France. Bigger companies may have the resources and time to deal with it, but I do not. To date, we have not had any machinery issues so I am not having problems with getting spare parts, but I know others are.”

SKYLINING AND SHIPPING

It took a lot of hard work and effort for Calum Duffy to get his business back on track after an initial three-month shutdown, but things were looking good for Duffy Skylining at the time of the last COVID-19 feature in May 2020, since when he has continued development of the Safe Forestry app.

Learning: “Taking finance–payment holidays is not an easy process and, though helpful at the time, they do take a lot of sorting out in the long term. I am glad I did it as I was out of work with no income for three months. The stress of watching money going out and none coming in would have been very difficult to deal with. So it helped at the time, but once it all started being activated again there was a lot of confusion, with payments no longer matching up, and higher in many cases.” 

Support: “I didn’t want to take money I hadn’t earned and, in my case, it would have given a false impression of being more secure than I actually was.” 

Future: “The sector seems to have thrived during Covid and I’m not sure why!”
Impact: “My plan for Duffy Skylining is to keep steadily working away. I have no intention of expansion, and no investment planned. The future now will be about consolidation of the crews and equipment.” 

Brexit: “I have found bringing in parts from the EU is a very painful, expensive, and slow process now. Sending parts back is a lot more onerous, too. Part prices have gone up significantly. Availability has become an issue. I also lost two EU employees due to Brexit. In short... I hate Brexit.” 

On the development of the Safe Forestry app, he added: “It is developing slowly but we are getting closer to offline functionality. I now have the android version in test mode and iOS is ready. I am hoping that when this feature is being read we will have offered it in test mode to a few more contractors for feedback. It is a much slower process than I imagined. Also, being an impatient contractor, it is not something I am used to. That said, it is working great for me when I have a signal and, where I do not, I get digital comms in – it’s that important to my daily functionality.” 

With the sawmills closing down during the first lockdown, Liam Browning, who runs the Great Glen Shipping Company, had to find cargo other than timber to ship. On the recommencement of its operations, with increasing demand for timber, he was reporting a better situation.

Learning: “Diversify! As industries closed down at the start of the pandemic, I had to seek cargoes from other areas to keep the ships operating. Lots of other coastal ship operators were chasing the same cargoes, but I was successful and kept the business going. While it was difficult at the time, looking back now it was a really positive experience and has ultimately helped the business.”

Calum Duffy’s current plans are for consolidation of crews and equipment going forward.

Support: “There were not any specific grants for shipping. Through my own bank, I did take a loan under the CBILS, to help with cash flow at the critical time. This was a great help, allowing me to stabilise the business and then seek other cargoes to move forward.”

Future: “I think things are going really well. The timber sector is buoyant at the moment and helping to drive things. Having operated for 12 years or so shipping timber, I realise that it can by cyclical, but now it is on an upward trend. The demand for coastal ships to transport goods and materials is as high as it has been for 20 years. Post pandemic, there has been a surge in building and a real boom in many sectors looking to recover from the last 18 months, and I see that continuing into 2022.”

Impact: “I personally don’t think there has been any bad impact. Yes, it was worrying at the start and for three months when the mills closed, but since then, the demand for sawn timber has been very high. We are back to being above the pre-pandemic levels of business. There is a lot of timber moving. We are shipping increased levels into Corpach for BSW and to Workington for Iggesund and BSW, while there is a lot coming off Mull for Tilhill both to Corpach and Troon, as well as our regular shipping movements of timber to Ireland.”

Brexit: “There is a bit more paperwork and red tape to gain customs clearance, but as we are only shipping single commodities it is having less of an impact on us than perhaps other businesses or sectors. That said, I would estimate that it has probably added around one per cent to our port costs.”

FIREWOOD AND CHAINSAW CARVING

At Pentland Biomass, owner Richard Spray has responded to the challenges of the last two years by driving operational efficiencies and investing in new kit to help on the firewood side of the business. 

Learning: “I’ve learned the importance of looking at every aspect of the business to see if we can fine–tune or improve what we do. COVID-19 made me think about how I use the team. I was, as everyone else, forced to consider how to get them to jobs safely so I did not end up losing a number of the team if one contracted COVID. While that made sense during the pandemic, it sometimes also made sense from a business point of view. Therefore, resource utilisation is probably the biggest learning for me.”

Support: “As an essential business we kept operating and therefore it was pretty much business in the ‘new normal’ for us. Demand for biofuels was good and we had enough work going to keep the team fully employed. People tended to buy extra as well during this time because of the uncertainty. However, our family horticultural and gardening centre business did have to close and furlough staff for a period.”

READ MORE: Forestry Journal and essentialARB offer free 30-day subscription

Future: “We are as busy now as we have ever been and I see that carrying on into 2022. On our domestic biofuel supply side we are running 30 per cent up, probably as a result of the hike in energy costs and maybe as a result of a bit of uncertainty over how this winter will pan out with COVID. On the commercial side, we have orders booked solid right through to April. Timber prices have gone up and supply can be a bit of an issue – or rather getting contractors to be able to cut it at our smaller 3–4,000-tonne levels as they are flat out on much bigger jobs. That said, we have built up supplies and have around 4,000 tonnes in the yard right now, so I do not anticipate any problems.”

Impact: “Personally, I think it has been good. While the sawmills closed for a bit, since they reopened they have been flat out and there has been a big demand for timber. There seems to have been a big catch-up effect, as lots of building works or projects or sectors requiring timber have sought to make up for time and money lost during the lockdown.”

Brexit: “There has been a problem with both getting spare parts and the time it takes. There has been an increase in red tape. Also, in some cases, the charges for carriage and tax have been more than the cost of the actual part itself! Trying to move goods in and out of Ireland, Holland and most of Europe has required more paperwork and more information from us. For example, if you change the named driver of the truck, this can lead to a four- or five-hour delay at the port to get the paperwork re-done and submitted. For us, this will probably mean that we look to do less business there.”

Chainsaw carving during the pandemic has been impacted by the cancellation of annual shows. However, as carvers tend to work on their own, adopting and implementing the COVID-19 protocols was quite straightforward. Sam Bowsher started his own business, Sam Bowsher Chainsaw Carving, just before COVID struck.

Learning: “My biggest learning curve was probably about how important social media is. I had a decent following on the likes of Facebook, but after realising it was going to be the only way people would see my work for a whole year I spent a fair chunk of time and money on improving my presence.”

Brexit once again dominated the discussion

Support: “I haven’t taken on any grants or financial help as the work thankfully kept coming.”

Future: “I guess you can never be too confident about the future as you don’t know what’s coming. However, I am hoping for 2022 to be a successful year and a nice change to the last two. It also looks like it’s going to be possible for shows to be fully back on and that will be good as it is always nice to meet customers rather than just messaging online.”

Impact: “As I’m not directly involved in the forestry sector I can’t give that educated an answer, but from my own experience I know I’m now paying around two-and-a-half times more for logs than I was 12 months ago. I guess there is a multitude of reasons for that, but hopefully one is that there is so much demand for it.”  

Brexit: “On my own business matters I would say no impacts as I didn’t send anything abroad before or since Brexit. However, one thing that has been noticeable is the delay on parts, especially the likes of saw parts. Again though, I don’t know if Brexit is the only thing to blame there or if it’s COVID again.”

COVID-19 certainly seems to have had an impact on many of the businesses Forestry Journal has spoken to and probably many others across the sector. Many have used this to shape and change their businesses going forward. Some took up the government support on offer, but others did not.

The future, certainly in the shape of 2022, almost without exception looks positive. Many believe COVID-19 has had a positive impact of the forestry sector and most certainly think that Brexit has had a negative one, in terms of parts deliveries, costs, and red tape. On a positive note, the most common feedback these businesses provided, on contact, was that they were extremely busy and working flat out.