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Timber packets from Sweden are unloaded in King's Lynn on the east coast of England.

2017-05-31

Bright outlook in the shadow of Brexit

While discussions about Brexit dominate the British news, Setra’s business in the UK rolls on at a high pace. There is a great need for new homes and the demand for Swedish raw material remains high.

Timber packets are stacked up on the quayside in King's Lynn. The boat from Sweden has just tied up at the dock and there is a hive of activity as the packets are routed to their right destination. Some are going to Setra's distribution warehouse and processing facility both of which are adjacent to the docks. Others will be driven directly to customers.

"Scandinavian softwood has a good reputation. It is of the highest quality and the Setra brand is in demand extensively," says Stuart Newman, Managing Director of Setra's subsidiary M&S Softwood, as he shows us around the area.

Popular concept

The concept of a distribution warehouse at the docks where customers can buy individual packets quickly and flexibly has been successful. In a short time, Setra has also opened warehouses in Hull, an important port on the east coast with links to Leeds, Manchester and Liverpool, as well as in Rochester, just south of London.

"We thought that the warehouses would primarily cover smaller customers "just in time" requirements. Something we have learned is this is not the case, our stock facility attracts all our customers and certainly strengthens our position as a supplier and in turn the distribution warehouse is a perfect combination to the market," says Bill Urmston, who is a Setra Customer Manager for the UK together with Jason Dodd and Keith Parsons.

Promising market

The UK accounts for 9% of Setra's sales and is one of the biggest single markets. In the spring the country took the first step towards leaving the EU but this has not yet had any effect on construction and timber purchases. On the contrary – business is going really well.

"Brexit is just another challenge for the UK. We have faced many challenges during our history but somehow everything always turns out okay in the end. In our business there is always good underlying demand for Nordic quality pine and spruce," says Jason Dodd.

Up to 300,000 homes need to be completed every year to meet demand in the UK according to official figures. This is twice to three times what is being built today. Stuart Newman sees a bright future.

"Sure there is uncertainty in the market, created by lots of unknowns until a suitable exit is negotiated. Prices and supply are under pressure and nobody knows what the real effect of Brexit will be. But even if it is going to be tough, the UK will continue to be an interesting market which grows and develops its consumption of softwood," he says.

Important to be flexible

Setra's distribution warehouses have proved to be a good way of satisfying new market conditions. Customers who are unsure how the market and prices are going to develop and do not want to make long-term commitments, can use the warehouses to move in and out of the market.

"It's about offering our services flexibly, when and how it suits our customers. We have the same arrangement at M&S's warehouse. You don't need to commit yourself too far ahead and if you call us today we try to ship tomorrow. That's what distinguishes us from the competition," says Stuart Newman.

Text: Linn Treijs
Photo: Emma Sekhon

Setra in the UK

Setra is represented in Beverley in north-east England and Kingsdown in south-east England. The subsidiary M&S Softwood, including further processing and one of the distribution warehouses are in King's Lynn in eastern England. The distribution warehouse in Hull has good links to the northern part of England and to Scotland while Rochester covers the southern part of the country.