Required Report - public distribution

**Date:** 3/10/2004

**GAIN Report Number:** NL4009

NL4000

**Netherlands**

**Solid Wood Products**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Roger Wentzel

U.S. embassy, The Hague

**Prepared by:**

Marcel Pinckaers

**Report Highlights:**

Wood demand is expected to increase in 2004 due to higher investment in
the overall construction sector and more spending on furniture and
interiors.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

The Hague \[NL1\]

\[NL\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[Policy 4](#policy)

[The Netherlands 4](#the-netherlands)

[The European Union 4](#the-european-union)

[Construction Sector 5](#construction-sector)

[Residential: Facts and Figures 5](#residential-facts-and-figures)

[Residential: Changes and Challenges
5](#residential-changes-and-challenges)

[Utility: Facts and Figures 6](#utility-facts-and-figures)

[Utility: Changes and Challenges 6](#utility-changes-and-challenges)

[Infrastructure: Facts and Figures 6](#infrastructure-facts-and-figures)

[Infrastructure: Changes and Challenges
6](#infrastructure-changes-and-challenges)

[Furniture and Interiors Sector 7](#furniture-and-interiors-sector)

[Furniture and Interiors: Facts and Figures
7](#furniture-and-interiors-facts-and-figures)

[Furniture and Interiors: Changes and Challenges
7](#furniture-and-interiors-changes-and-challenges)

[Material Handling Sector 8](#material-handling-sector)

[Material Handling: Facts and Figures
8](#material-handling-facts-and-figures)

[Material Handling: Changes and Challenges
8](#material-handling-changes-and-challenges)

[Pulp and Paper Sector 9](#pulp-and-paper-sector)

[Tropical Wood 10](#tropical-wood)

[Marketing 11](#marketing)

[Certification 12](#certification)

# Executive Summary

Wood demand is expected to increase in 2004 due to higher investments in
the overall construction sector and more spending on furniture and
interiors.

# Policy

## 

## The Netherlands

Dutch Forestry Policy is detailed in the "Nota Natuur, bos en Landschap
in de 21e eeuw; Natuur voor Mensen, Mensen voor Natuur", and
administered by the Ministry of Agriculture, Nature and Food Quality.
See <http://www.minlnv.nl/thema/groen/natuur/nbl21/>

Trade barriers that constrain imports of US wood products into the
Netherlands:

\- Import duties and VAT for US wood and wood products for the Dutch
market see: [www.douane.nl/taric-nl/](http://www.douane.nl/taric-nl/)

\- Restrictions on treated wood imports see:
[www.vhn.org](http://www.vhn.org/)

NOTE: Links are often in Dutch, contact the Office of Agriculture
Affairs in The Hague if further assistance is necessary.

## The European Union

EU regulations on solid wood products, please contact:

The U.S. Mission to the European Union

Office of Agricultural Affairs

Boulevard du Regent 27

B-1000 Brussels, Belgium

Tel: 32-2-508-2760

Fax: 32-2-511-0918

[www.useu.be/agri](http://www.useu.be/agri)

# Construction Sector 

After 2 years of decreases, investment in the construction sector is
expected to increase by 2.5 percent in 2004. This will result in an
increase in demand for wood products. Expected growth in the residential
sector will more than compensate for an expected decline in utility and
infrastructure construction.

![](media/image2.wmf){width="3.220833333333333in"
height="2.20625in"}Figure 1: Overview of the Dutch Construction Section

Source: ministry VROM, FAS estimates

## Residential: Facts and Figures

Investment in the residential construction sector dropped by 4.6% to
EURO 15,8 billion in 2002. Spending in the sector did not change in 2003
but is expected to grow by 5% in 2004. The two main factors behind this
growth are (1) the expected increase of the Dutch GDP by 1% and (2) the
expectation that consumers are regaining confidence in the economy.

## Residential: Changes and Challenges

The Dutch Door, Frame and Stairs industry consists of a few hundred
producers, manufacturing exterior doors, interior doors, stairs and
frames. For the Dutch Door, Frame and Stairs Industry the future looks
difficult. Despite the fact that the residential construction sector is
recovering from a period (2001-2003) of low investment, they face
increasing competition from low labor-cost countries. Some 10 to 20% of
Dutch capacity has moved to these countries to be closer to raw
materials and to take advantage of lower production costs.

The Dutch Doors, Frame and Stairs industry uses wood, synthetic and
steel as input. Wood is by far the most-used material. Doors and Stairs
are generally made from wood, while doorframes are sometimes made from
steel and/or synthetics. Compared to other European countries the use of
synthetics and steel in Dutch residential construction is low.

Scandinavian woods are very popular with the industry because of their
low price and durable quality. In addition, distance, transportation
time and logistics add to their popularity. US softwood is less popular.
Species like Douglas Fir, Hemlock, Yellow Pine and Balsam are used for
interior doors while Western Red Cedar and Red Wood is more used for
exterior doors.

## Utility: Facts and Figures

The Utility sector includes the Government sector (government, education
and healthcare) and the Private sector (agriculture, industry, trade,
hotels and restaurants, transport, communication and service).

During 2002, for the first time since 1994, investment in the utility
sector dropped. The value decreased by 5.2% to EURO 12.1 billion. The
value of the sector last year dropped by another 3.4% to EURO 11,7
billion and is expected to drop even further to EURO 11,5 billion this
year. Recovery is not expected before 2005 or even 2006.

Figure 2: overview of the Dutch construction sector

  ------------------------ ----------- ----------- ----------- -----------
                           2002        2003        2004        2005

  Government sector        8,780       8,100       7,750       7,830

  Private sector           3,340       3,630       3,730       3,870

  Utility sector           12,120      11,730      11,480      11,700
  ------------------------ ----------- ----------- ----------- -----------

Source: Ministry VROM

## Utility: Changes and Challenges

The slowdown in the economy, disappointing developments on the stock
market and within the Information and Communication Technology (ICT)
sector and the rise and fall of the dotcom industry, hit the corporate
sector in the Netherlands severely. The overcapacity in the Dutch
office-space sector is huge. Currently, the Netherlands has an office
space surplus of 1.2 million square meters.

Also the Dutch Trade and HRI sector have suffered from the slow economy.
Specifically the HRI sector is going through some stormy times as they
are faced with consumers' unwillingness to spend freely.

Doors, Frames and Stairs used in the utility sector are still
predominantly made from wood. Synthetic and steel is still used on a
limited scale. Also for this industry, wood from Scandinavia and the
Baltic states is very popular.

## Infrastructure: Facts and Figures

Investment in the infrastructure sector dropped by 3% to EURO 7,8
billion in 2002. This trend continued through 2003. This year,
investments are expected to grow by over 4% to EURO 8,0 billion.
Government's spending priorities, which change from year to year, are
difficult to predict and will determine future investment in
infrastructure.

## Infrastructure: Changes and Challenges 

Use of wood in the Infrastructure Construction is very small compared to
the Residential and Utility Construction sectors.

# Furniture and Interiors Sector

## 

## Furniture and Interiors: Facts and Figures

The total turnover of the Dutch furniture sector in 2002 was EURO 2.1
billion, 2.8% lower than the preceding year. In 2000, the industry's
turnover was over 2.3 billion EURO. For 2003, the CBM estimates a
further decline in total turnover of 5%. This year turnover is expected
to grow and that growth is to continue into 2005, driven by growth in
GDP and increasing consumer' willingness to spend on consumer goods.
This trend will have a positive effect on wood demand in the Dutch
furniture and interiors sector.

## Furniture and Interiors: Changes and Challenges

The Dutch furniture and interior sector is a major importer of wood
components and semi-manufactured products. Currently, the majority of
those products come from neighboring Germany and Belgium and some
semi-manufactured products from Italy and Spain. However, current E.U.
countries are losing market share at the expense of Central and Eastern
European Countries and Asia, due to their cost price advantage and
access to abundant raw materials.

Figure 3: Total imports of furniture

  --------------------- ------------- ------------- ----------------------
                        2001          2002          \% Change

  Wood                  1,085         1,072         \- 0.2

  Metal                 316           277           -12.3

  Synthetic             310           340           +9.6

  Total                 1,711         1,689         -7.1
  --------------------- ------------- ------------- ----------------------

Source: CBS

Trends in the Dutch Furniture and Interior Sector are:

Furniture:

-   Desire for bigger tables.

-   Strong preference for wood or a combination with wood as material
    for furniture.

-   Preference for walnut, cherry and oak.

-   Wood end-products must have a natural and light look.

-   American walnut is popular.

-   American red oak is losing popularity at the expense of European
    oak.

-   Wood combined with steel is gaining popularity.

-   Certified wood is slowly gaining market share due to sustained
    promotional efforts.

Flooring:

-   Laminate is passé, wooden floors with knots is in (again natural
    look).

-   Popularity: 1) oak, 2) beech and 3) hard maple.

Interior:

-   Natural look is preferred.

-   Wood combined with glass and stainless steel.

# Material Handling Sector

## 

## Material Handling: Facts and Figures

The Dutch Material Handling sector is dominated by the pallet industry,
worth EURO 250 million. Smaller industries include the industrial
packaging and the lightweight case industry worth EURO 100 million and
EURO 25 million, respectively.

## Material Handling: Changes and Challenges

Annually, approximately 18 million new wooden pallets are annually
produced. This involves the use of almost 1-million cubic meters of
wood. A mere 8 percent is Dutch wood and the rest imported.
Traditionally, the main supplying regions are Scandinavia, the Baltic
States and Southern and Central Europe. US wood is not used in the Dutch
material-handling sector and this is not expected to change in 2004.

Dynamics in the Dutch Material Handling Industry are:

Substitution:

-   The material handling industry relies heavily on the use of wood. It
    is expected that this will not change within the near future. In
    some markets, for instance the food market, the use of plastic has
    increased.

EU-enlargement:

-   Due to the enlargement of the EU with 10 new central and eastern
    European countries this year, the import of pallets from these
    countries is expected to increase. In addition, due to the lower
    labor costs in this region, it is expected that the Dutch industry
    will gradually move to this area. On the other hand, because of the
    enlargement, the Dutch will expand their transportation and
    logistics activities in the material handling industry.

ISPM 15:

-   The Dutch industry has invested to fully comply with the new ISPM 15
    guidelines on Wood Packaging. For more information on ISPM 15, see
    [www.smhv.nl](http://www.smhv.nl/).

NOTE: Links are often in Dutch, contact the Office of Agriculture
Affairs in The Hague if further assistance is necessary.

# Pulp and Paper Sector

In value, the Dutch pulp and paper industry dominates the import market
of wood and wood products. Over 50 percent of import value is generated
by this sector. Main suppliers are Germany (25%), Sweden (21%), Finland
(12%) and Belgium (12%). The market share of the US is very small,
supplying pulp and paper for the graphics industry, and expected to
remain stable in 2004.

![](media/image3.wmf){width="4.061805555555556in"
height="2.7819444444444446in"}

Figure 4: US exports of paper and pulp to the Netherlands

Source: [www.vnp-online.nl](http://www.vnp-online.nl/)

NOTE: Knowing that the Netherlands is a big trader in paper and pulp, it
is difficult to analyze what percentage of US imports are used in the
Netherlands and what percentage is re-exported. The high market share of
Belgium can also be explained as a consequence of the high volume of
regional trade through the Netherlands (Imported in Antwerp but destined
for the Dutch market).

# Tropical Wood

The use of tropical wood is declining in the Netherlands. Between 1992
and 2002 use fell from approximately 815,000 m3 to 567,000 m3,
respectively. Decreases in use are noticeable in lumber, round wood and
plywood and veneer. This trend is expected to continue.

# Marketing 

**The following trade shows are planned in the Netherlands:**

Bouw RAI

RAI, Amsterdam, Netherlands

30 March -- 2 April 2004

[www.bouwrai.nl](http://www.bouwrai.nl/)

Interieurbouw Vakbeurs en Hout & Kunststof Vakbeurs

Evenementenhal Hardenberg, Netherlands

31 August -- 2 September 2004

Hout Dag

Ahoy, Rotterdam, Netherlands

26 -- 30 October 2004

[www.hout.nl](http://www.hout.nl/)

Internationale Bouw Beurs

Jaarbeurs, Utrecht, Netherlands

21 -- 26 February 2005

<http://sites.vnuexhibitions.com/sites/bouwbeurs/nl/index.asp>

Logistica Beurs

Jaarbeurs, Utrecht, Netherlands

November 2006

[www.logistica.nl](http://www.logistica.nl/)

# Certification

Both product certificates (for wood products) and process certificates
(for the management of forests and the management of harvesting, trading
and processing) are increasingly common in the Netherlands.

Discussions on tropical wood have triggered several initiatives aimed at
improving forestry management. Some 10 percent of Dutch wood consumption
is tropical wood and originates from countries such as Malaysia,
Indonesia, Cameroon and Gabon. To promote wood harvesting from forests
where reforestation is pursued, several certification arrangements have
been developed.

![](media/image4.wmf){width="3.0166666666666666in" height="2.0625in"}

Figure 5: Market shares of several global certification initiatives,
2003

Source: Stichting Bos en hout

One certification initiative known globally is the Forest Stewardship
Council (FSC), established in 1993. Due to variations in certification
criteria around the world, FSC-NL was developed for the Netherlands. In
2001, close to one-third of Dutch forests were certified FSC. The total
availability of FSC certified wood on the Dutch market equals almost 7
percent of the total consumption.

More information on FSC-NL can be found on
[www.fscnl.org](http://www.fscnl.org/).

Another initiative, taken in Europe and launched in 1999, is the Pan
European Forest Certificate (PEFC). More information on PEFC can be
found on [www.pefc.org](http://www.pefc.org/).

With imports meeting 90% of domestic needs, several other programs cover
wood coming to the Netherlands. To make sure that all these certificates
meet the requirements the Dutch industry sets, the Netherlands Timber
Trade Association evaluates every certificate program.

Besides certifying wood products, the management of wood harvesting,
trading and processing can also be certified. Certifying initiatives
include ISO system, VCA certification and the ErBo Regeling. More
information can be found on [www.bosschap.nl](http://www.bosschap.nl/).

For more information on product certification contact the Netherlands
Timber Trade Association at

<http://www.centrumhout.nl/vvnh/vvnheng.html>.

Trends in the certified wood products market on the Dutch market
include:

-   There is some certified US wood coming into the Netherlands.

-   Demand for certified wood for flooring and furniture sector is still
    small, demand by the construction sector is increasing.

-   Over 40% of available certified wood is sold through Do-It-Yourself
    chains like Gamma, Praxis and Bouwmarkt.

-   In 2001, 469,000 cubic meters round wood equivalents were available
    on the Dutch market; domestic production (287,000 M3), import
    (217,000 M3) and export (35,000 M3).

-   The available certified wood equaled 7% of total wood availability
    in 2001. The available volume of certified wood is forecast at
    605,000 M3 in 2003, or 8.3% of total availability.

-   In the past few years, the share of certified wood on the Dutch
    market has gone up substantially. Considering the large number of
    companies and organizations featuring certified wood and that the
    FSC logo is now well known, further growth can be expected.