The high demand for pine products, including sawn and pine framing for construction in Australia is causing a shortage in the market.
While the government stimulus for the residential building sector is driving the demand for more timber, the COVID-19 pandemic is another factor impacting the market. Many importers are also seeing their supply routed to the USA where the timber commands a higher price. Additionally, the Australian market continues to deal with the consequences of the 2020 bushfire crisis, which has taken out a phenomenal amount of future supply.
However, D & R Henderson had the foresight seven years ago to predict a shortage of matured Radiata Pine between 2018 and 2022. A Radiata tree takes 30 years to grow to an optimal yield, and D&R knew there weren’t enough trees planted 30 years ago. Low imports and bushfires have only compounded the shortage problem in 2020.
A strategic business decision taken seven years ago to acquire privately owned forestry is helping the company maintain supplies to their loyal customers at a competitive rate.
Since the heavy demand will continue to stretch the supply chain in the coming months, D&R is stepping up production to fill the orders. Ultimately, it will come down to having enough log. It is refreshing to see the industry pick up after a disastrous year; however, the road will be rocky for some time to come.