We see the World closing down because of the Corona/COVID 19 situation. Many companies, especially small ones, struggle to keep themselves alive as bankruptcy comes closer. What about the forest machine business? We contacted some of the machine manufacturers to ask. Here is a summary.
The forest machine business has been running at full speed for a long time now. In the meantime, many contractors have had problems with both drought in the summertime and the wet winter at present. Also, the bark beetle calamity has brought lots of work for the forest machines.
The picture you get when looking into this is not very clear, which also was noticeable in our contacts with the manufacturers.
It seems that even if the factories are running as normal for the moment most of them are counting on that it will not last for long now. It´s difficult to say if this is because of the ongoing pandemic or if it is a normal decline after the good years. It´s probably a little of both.
Actions clearly taken because of the pandemic are closed doors, meaning that you don´t let the customers into the house. You leave ordered spare parts outside the door for the customer to pick it up, after calling in to order the parts. You don´t invite the customer for a cup of coffee as usual.
Most repairs and service jobs are made in the forest as usual. In those cases when it’s made in a workshop, the customers are limited to move around in the premises – personnel areas are strictly for the personnel.
These actions are however different among the manufacturers and service dealers. To get the right information you will have to contact your local supplier or workshop before going there.
As for office work many manufacturers, like in all industries, is being made from temporary home offices.
Demand for machines
Also here the picture is not all clear. Some manufacturers claim they see no decline in the demands for machines in a near future, while others do. One explanation could be that they operate on different markets.
Canceled demos and fairs
There were many demos and customer activities planned for this spring that has now been canceled due to Corona restrictions. One example is the Finnish manufacturer Ponsse, who are celebrating their 50thanniversary this year. They have interrupted the roadshow that was planned and started, as a celebration of the anniversary.
There were some forestry fairs planned for this spring, and later in the summer. Some are canceled, some postponed and some will be arranged according to plan. We wrote about this recently here, in the article Update on the forestry shows.
The forestry business is affected by what´s going on in other businesses. The decrease of export from China has brought a shortage of containers in Europe which creates problems for companies who export to Asia, such as forest products and machines.
Many forestry nations, like Russia, are dependent on Chinese import of wood and wooden products. When the Chinese industrial production goes down, the demand for forestry equipment in the exporting countries goes down.
As borders close, and fewer ferries and freight ships are operating, it becomes more difficult to deliver sold machines, especially for export. Also, deliveries of components for the machines becomes more complicated due to the closed borders which brings problems for the manufacturers that are dependent on components from abroad.
Are there any good news?
“Can you see the light?”
Well, compared to the crisis in 2008/2009 the financial situation is better now, and the companies are better prepared for a decline in business.
It seems after all, that the demand for forest machines is still quite good on many markets. So far there have been no lay-offs among the forest machine manufacturers, even though some of them are preparing for that.
The current situation, where people are told to stay home and not meet with others, means an increase in shopping over the Internet. This means a higher demand for packages that very often are made from forestry products such as cardboard. Also, all kinds of hygienic paper are in high demand which should help keeping the forestry going.
Finally, when speaking about China, Group sales and marketing director/Deputy CEO at Ponsse, Jarmo Vidgrén , says that “China start to be back in normal situation.” Among the Nordic CTL manufacturers, Ponsse is probably one of the companies that have the best insight into the Chinese forest machine market.