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EXPORTING TIMBER TO AUSTRALIA

Where’s the opportunity?

Australia’s burgeoning building construction sector is generating higher demand for timber.  Australian demand for new housing will rise from 183,000 new dwellings p.a. now to 259,000 p.a. by 2050, driving an increase of almost 50% in demand for timber. Freestanding houses in particular use large quantities of timber, including softwoods (for roof and lightweight framing) and hardwoods (for joinery and flooring). Carpentry typically represents about 20% of the cost of the average new home. So how can you tap into this booming market? Here are our tips to take your marketing mix to the next level.

Our Export Tips:

Product 

Timber products are empowered by technological advances over the past five years. Products such as prefabricated wooden roof trusses are commonly supplied directly to homes and building sites in Australia. Make your timber products stand out by offering customers a range of manufactured timber that have superior strength attributes. These products include laminated veneer lumber, laminated strand lumber, glue laminated timber and I-beams. Furthermore, sustainability is a key feature to highlight in the promotion of timber products. Environmental certification is a voluntary market driven process. Consider using certification schemes to show Australian consumers that your timber products are sourced from responsibly and sustainably managed forests. The two major certification schemes within Australia and internationally are PEFC (called Responsible Wood in Australia) and FSC.

Price 

Current timber shortages in Australia represent attractive profit potential to suppliers seeking to enter Australia. On the one hand, rising residential construction activities have largely increased demand for timber. Strengthening demand is expected to flow through to higher prices. On the other hand, flooding in New South Wales and Queensland, in addition to the Russia-Ukraine conflict have exacerbated supply deficits. Consequently, this imbalance of supply and demand is placing upward pressure on the domestic price of timber in the current year. Experts forecast the domestic price of timber to increase by 1.8% in 2022-23, to reach 160.4 index points. Also, note that timber is a commodity with fluctuating market price. To seize this opportunity, remember to lock your prices with your Australian customers, as negotiation times can be lengthy.

Promotion

Considering the B2B nature of timber exports, mainstream advertising would be ineffective to reach your target audience. Instead, make the most effective use of your time and marketing budget by directly cold calling business development managers, procurement personnel, building construction companies and the like.

Place

Large cities such as Sydney and Melbourne have a high and increasing volume of new home construction, partially caused by strong population growth. Furthermore, consider distributing hardwood for timber flooring and timber decking in Brisbane, which has a particularly big demand for these materials.

Our Strategic Takeaways:

Australia is an attractive market for prospective timber exporters, as it is seeking more softwood and hardwood materials. Moreover, a combination of rising construction activity and supply chain deficit is driving up timber prices in Australia. Equipped with value-adding promotional features such as sustainability certification, timber suppliers can see strong profit potentials in exporting to Australia.