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2009 UPM Tilhill Timber Bulletin - out now

The 2009 UPM Tilhill Timber Bulletin: 'Trends and influences on the UK standing coniferous timber sales market', is out today, 18 September 2009.

The bulletin, published as an aid to growers and forest managers, shows the impact on the UK forestry industry of the most severe recession since the Second World War. "As predicted in last year's issue, the highs of 2007 have quickly dropped away," said Peter Whitfield, Timber Operations Director. "However, the UK forest industry has proven robust and shown its ability to weather these turbulent times."

The weak pound has resulted in imports being significantly reduced. This has benefited domestic producers, despite overall demand for sawn and board products remaining weak. UK producers have managed to substitute volumes lost as imports and the significant fall in oil prices has helped in holding overall operating costs. Although this is good news, we are now seeing a trend of rising oil prices and a weakening of the US dollar.

Timber prices have been hit, but not to the extent that may have been feared. The fall in prices over last winter has led to a significant decline in the volume of standing timber being brought forward from the private sector. Despite the downturn in sawn timber consumption, there is still good demand for standing timber and prices are already showing signs of recovery.

On a positive note, demand for energy wood continues to increase and new capacity in Scotland in 2009 alone equates to an additional annual demand of 850,000t of biomass. This fuel comes from sources including roundwood, forest residues and recycled wood.

“Looking ahead, doubts remain as to whether the economy has bottomed out," added Peter Whitfield. "Undoubtedly, much of the positive impact on the timber industry in recent months has been exchange rate driven. Forecasters are suggesting a return to mid 2008 exchange rate levels on the euro but the UK forestry industry is well placed to adapt to changing circumstances."

For a copy of the UPM Tilhill Timber Bulletin, contact UPM Tilhill on 01892 861008 or download from the website www.upm-tilhill.com||

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Notes to editors:
For further press information contact:
Ruth Roy
01892 861008/07771 940494
ruth.roy@upm-kymmene.com

Or
Kate Spencer
01892 861008
kate.spencer@upm-kymmene.com

UPM Tilhill is the UK’s largest timber harvesting and forest management company. It harvests and markets over 2.0 million tonnes out of a UK market in excess of 8 million tonnes per year. The company provides a full range of consultancy and contracting services to the forest owner and forestry investor. It also provides market leading services in utility arboriculture and commercial landscaping throughout the UK. Further information is available on the company’s website at www.upm-tilhill.com.

UPM is one of the world\'s leading forest industry groups. UPM consists of three Business Groups: Energy and pulp, Paper, and Engineered materials. Our competitiveness is based on cost leadership, change readiness and leading innovation. The Group employs around 24,000 people and it has production facilities in 14 countries. In 2008, UPM made sales of EUR 9.5 billion. UPM\'s shares are listed on the Helsinki stock exchange. www.upm-kymmene.com||