CEO Berg of Puumerkki Oy: The industry needs to move towards more highly refined wood products

The timber trade is in the midst of a structural change. Consumers are increasingly less interested in basic lumber and are demanding more finished products instead. „I want to push the processing industry towards a higher degree of refinement and product development and a larger appreciation of the domestic market,“ says Petrus Berg, the CEO of Puumerkki.

– It’s about finding the smartest ways of using the world’s best wood material and increasing total demand. Wood is able to answer society’s major challenges such as the need for sustainable development, and this is already reflected in consumer behaviour. Wood has a good story, and we need to let people hear it.

Berg would like to see the industry and trade engaging in more dialogue and mutual product development. – Since the sales of traditional unprocessed planks have more or less died out, the level of processing needs to be raised further. Consumers are now asking for ready-made items sawed to length and prefabricated panels with end joints. The younger generations do not want to spend their valuable free-time toiling away on a project.

– Strong growth areas for the timber trade include decorative products such as painted panels and other wood solutions that are sold installation-ready. Patios, piers and accessory buildings all need to be turnkey products that are ready as they are.

Berg feels that the industry needs to change its mindset. – Part of the manufacturing industry only focuses on exports, and a small share concentrates on the domestic market. It is problematic from a trade perspective that the industry only looks at the domestic market when exports dwindle. It would be great to see the domestic market being the primary market for some products, Berg points out.

The use of wood is a megatrend

According to Berg, there is a need for a common platform where the industry, product manufacturers and trade experts could come together to develop wood products for the domestic market. We also need small to medium sized wood processing businesses that have the flexibly to meet trade requirements.

– The ongoing megatrends of urbanisation, sustainability and environmental friendliness are a strong driving force for the increased use of wood. Wood is a home-grown material that has a low carbon footprint and can improve society’s wellbeing in a multitude of ways. Trade and industry should join together to respond to this demand by increasing the refining rate and providing a wider range of finished, high quality wood products.

According to Berg, major megatrends, such as the general growth in environmental awareness, support the use of wood. – This is clearly visible in the Central European market and gaining ground here as well. This is simultaneously a challenge and an opportunity for the manufacturing industry, which should be more willing to listen to its potential customers. The industry only seems to understand products of large volume, even though a larger number of products would add up to large sums of money.

– Online sales of wood products are growing steadily, and the growth is specifically in finished products. Online sales grow day by day, even if they a still a mere fraction of the total sales numbers.

Consumers expect to hear a product’s story and receive expert assistance

According to Berg, the consumer is increasingly interested in the origin of a product’s material. – We’re not very good at telling a good story about our wood. We know the origin of the material because we insist on only using certified products. All wood products are unique, and consumers want to know more about them. Storytelling is essential to wood product marketing, but the industry does not seem to be interested in learning it.

Even though the public sector is building more and more schools and day-care centres from wood, public landscaping has not yet embraced wood in the same way according to Berg. – The outdoor areas of schools and day-care centres could be made more pleasant by using wooden structures in place of the current gravel or asphalt coverings. The use of wood improves acoustics and comfort indoors, and there is no reason for not introducing these benefits to the outdoors as well.

– The concept of an experienced timber salesperson needs a revival. Although timber is a relatively simple product, special expertise is needed to get the right product in the right place. There can never be too much of this expertise in sales. The consumer appreciates know-how and high quality products and is willing to pay for them. As online commerce grows, marketing savvy becomes increasingly important.

From the world’s best raw material to the world’s best wood products

Formerly owned by Stora Enso, the Puumerkki retail chain has now been sold to a Swedish capital investment fund. – With the new owner, we are discussing strong development and growth of the company. We used to have more of a maintaining role, whereas now distribution is the core business. We have the opportunity to develop into the go-to timber specialist in Finland and the neighbouring markets.

I want to push the processing industry towards a higher degree of refinement and product development and a larger appreciation of the domestic market. Currently, over 75 percent of the sawmill industry’s exports are raw material because the industry does not want to restrict itself to individual target markets with finished products, instead opting to sell timber to all manufacturers.

According to Berg, wood construction has already been heading in a good direction for the last decade. – Legislation has been updated, design expertise has improved and there is an increased awareness of the many positive impacts of using wood. Although the completed wooden apartment building projects have shown the competitiveness of wood, wood construction has yet to reach the mainstream, Berg laments.

– As the industrial construction of wooden apartment buildings has yet to break into the mainstream, the wood product industry needs to create a completely new viable industrial sector for large-scale wood construction. Since concrete construction companies are not likely to convert to timber, wood needs to fully develop its own value chain of know-how and implementation from design to construction, as has been done in Central Europe.

According to Berg, there are also prejudices and attitudes that hinder increased wood construction in Finland. – Wood construction is considered too old-fashioned and associated with traditional cottages in the woods. But with today’s modern engineered product components, wood construction has immense potential in both architecture and design.

– We need to improve our storytelling skills. Every wood product is unique and has its own unique story, and we already know the product’s origin. We use both certifications that are in use in Finland, and we want to spearhead an increased awareness of the environmental qualities of wood, including its life cycle calculations and carbon footprint labelling. Finnish timber is a brand in itself. Since we have the world’s best timber, it should also be processed into the world’s best wood products.

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Markku Laukkanen