Wood-based panel producer Kronospan is warning the building industry of sustained price rises due to an unprecedented increase in raw material costs.
Kronospan CEO, Ludwig Scheiblreiter, says distributors and retailers must pass the rises down the supply line now rather than try and swallow the increases themselves.
He says: “This year will be critical and decisive, even without the effects of the new age of austerity. This is not a wave any of us will be able to sit out, nor will any of us be able to continue the absorption of cost increases within the supply chain.”
He says that the subsidies – worth up to four times the current price levels of timber residues and post consumer wood waste – being paid to the biomass industry to burn wood to create electricity is “well meaning but ill conceived legislation” as it is squeezing the availability of the core raw material and increasing prices.
Plus, the fact that 90% of the world’s urea supply is needed as fertilizer for food is impacting on supply, since urea is the main chemical used in resin for the wood panel industry process.
“The key action is for everyone to campaign to abolish subsidies to the biomass industry for burning still useable wood. Anyone can do this by supporting the Wood Panel Industry Federation’s (WPIF) Make Wood Work campaign.” www.makewoodwork.co.uk.