Standards, Procedures and Public Appointments Committee

Meeting date: Thursday, March 3, 2022

Official Report 630KB pdf

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Cross-Party Group

Item 3 is consideration of an application for recognition from the proposed cross-party group on the wood panel industry. I welcome Fergus Ewing, the proposed convener of the CPG, if it is granted accreditation. I hand over to Fergus to introduce the CPG.

Thank you, convener and members, for your time. The cross-party group on the wood panel industry will consider the interests of the sector, which is very important to the economy of Scotland. There are three main wood panel manufacturers in the United Kingdom—namely, Norbord, Egger and Kronospan. Those three companies are the constituent members of the Wood Panel Industries Federation and they operate across six sites located in England, Scotland and Wales. Significantly, three of those sites are in Scotland: Norbord has sites near Inverness and at Cowie, and Egger has a site at Barony.

The member companies operate a business-to-business interface supplying some of the UK’s biggest brands, including B&Q, Jewson, Wickes and Howdens, to name but a few. Manufactured wood-based and panel products such as chipboard, oriented strand board and medium density fibreboard can be identified in virtually every home, office and shop, and they are extensively used in the construction, furniture making, packaging and transportation industries.

The wood panel industry makes a significant contribution to the UK economy and is disproportionately important to Scotland, due to half of the industry being located here. Wood panel manufacturers play an important role in the Scottish economy, helping to support regional employment and local supply chains. In 2018, the average salary of those employed in the industry was £36,235 and the industry has a strong track record of investing in local communities—through successful apprenticeship schemes, for example.

Forestry investment is key to ensuring the sustainable growth of the industry. The UK Government has set a target for planting 30,000 hectares per annum by 2024, with England committed to delivering 7,000 hectares and Wales expecting to deliver up to 4,000 hectares per annum. Scotland is very much leading the way in terms of ambition with our target to plant 18,000 hectares per annum.

One of the key purposes of the group will be to discuss and explore the wood security challenge and to encourage England and Wales to raise their ambitions for tree planting. The sector is working hard to play its role in contributing to net zero aims through the decarbonising of manufacturing processes and the role of wood panelling products in carbon sequestration. That will be another key area for the group to examine.

The group intends to work closely with the Wood Panel Industries Federation to gain a detailed understanding of the challenges that are facing the sector. The WPIF will act as the group’s secretariat, ensuring a clear link with industry partners. At the proposed group’s initial meeting, there was cross-party attendance from members across Scotland. Alongside me as proposed convener, we have elected two proposed deputy conveners—namely, Stephen Kerr MSP from the Conservatives and Colin Smyth MSP from Labour.

The next step for the group will be to agree our policy priorities. We will do that in consultation with the WPIF. Our intention is to draw up policy recommendations for the Scottish Government to inform our engagement with Scottish Government ministers. At Westminster, there is already an all-party parliamentary group for the wood panel industry and we will look for opportunities to work with it to influence the UK Government as well.

Many thanks for the opportunity to set out that brief description of this very important industry to Scotland.

Thank you. Do members have any questions?

I have two questions. First, what is your view as convener of the proposed group of the current high-level threats that are facing the industry?

The industry has been doing pretty well. There has been substantial investment in the industry. For example, the Norbord plant, which is in my constituency, is one of the most modern in Europe and is able to operate very efficiently due to the modern equipment that has recently been installed there, with an investment well in excess of £100 million.

My understanding is that the industry has been doing fairly well of late. The risk of continuing high energy costs is a challenge, as it is a fairly energy-intensive exercise; labour shortages in some areas are a challenge for many employers, as members will appreciate; and, on a wider macro level, the companies do business primarily in the UK but they also have an interest in purchasing materials and doing business with mainland Europe and, as we all know, there is currently considerable uncertainty in relation to the geopolitical situation there.

Will you be touching on the delicate issue of tree planting on arable land?

We will look at the issue from the perspective of the industry, which is that it requires a continuous and reliable supply of raw material, namely timber of a certain quality.

The reason why we have wood panel manufacturing plants in Scotland is that they are located close to large areas of afforestation of commercial species. I was formerly the minister with responsibility for forestry so I know that, in consideration of applications for consent to plant trees, there is a presumption that prime arable land should not be used for tree planting. That issue is a matter for the relevant Scottish Government ministers.

There is ample scope in Scotland for more afforestation. Plainly, the forestry standards that were developed in the mid-1990s are applicable in order to prevent the mistakes that were made in the 1980s, when trees were planted in heavy peat on very steep land that was inaccessible for felling or maintaining. The system of ensuring that the right tree is planted in the right place is a sound, mature and developed one in Scotland.

The group will look closely at how, by working together with farmers, crofters, land managers, landowners, agents, contractors, nurseries and the colleges, we can ensure that targets are met. That is important, because the wood panel industry will continue to grow only if it has a continuous and steady supply of commercial species timber. If it continues to grow, we can increasingly build new houses from wood rather than concrete or brick. I am no expert, but that must be good news for net zero and environmental aims, and it must be something that many people in Scotland want to happen. We are a wee bit further ahead than other countries in the use of wood for house construction.

Initially, our main focus will be on how the Scottish Government can best meet its target of 18,000 hectares and, within that, ensure that there is sufficient supply of commercial species to continue to provide the feedstock for this important sector of the economy.

I am sure that the businesses that are involved will be grateful for Tess White’s interest, and I hope that she and other members will consider joining the group. We would obviously like more people to come along. The wood panel industry is a modern success story in Scotland and it is therefore fitting that it should be the subject of more detailed parliamentary work, with the object of enabling it to achieve even more.

Good morning, Fergus. I have to admit that I am no expert on the wood panel industry in Scotland, as will become apparent. I looked at the committee papers and, because I do not know the sector, it seemed slightly unusual that, where you have listed the organisations that are involved in the cross-party group, you refer to only the Wood Panel Industries Federation and Invicta Public Affairs. Normally, a whole host of organisations and stakeholders come forward to partner with cross-party groups, so that seems quite limited.

I think that you said that there are three main wood panel manufacturers in the UK that are based in Scotland and that they are the key stakeholders in the Wood Panel Industries Federation. I am interested to know whether there are other players in the wood panel industry—perhaps smaller manufacturers that might have a voice and provide different perspectives. I have no idea where large timber merchants fit in. Any more information that you can provide on that would be welcome and helpful.

Due to time constraints, I will roll my two questions together. As I listened to your answers, I was reflecting on the fact that most Scottish consumers do not think about the supply and sustainability of wood, or the economic contribution, job creation or employment involved in the industry. Is there a wider mission for the group to think about how Weegies such as me, who just pitch up and buy their furniture, can learn more about the sector and the contribution that it makes to the economy?

Your final point about spreading awareness and knowledge of the sector in Scotland is very well made. That point has certainly already been put and discussed in our initial discussions at the first meeting of the proposed cross-party group.

10:15  

If more people were aware that Sitka spruce, a species that is much maligned in Scotland, is an invaluable building material for the houses that everyone knows that we need, people might warm towards that excellent species. Mr Mountain will know that it is well suited to being planted in Scotland’s temperate climate. It has good qualities for use in construction, making it an invaluable part of forestry composition in Scotland.

The group could get the message across that, as well as being good for the planet, commercial forestry is a vital source of material for the construction sector, weaning us away from brick and concrete block housing and on to timber housing. Continental Europe and Scandinavia are far ahead of us in their use of wood.

The second question asked me to say more about the panel products sector. It is part of the larger commercial timber sector in Scotland. It is represented by a trade body, the Confederation of Forest Industries. That body is not part of the group, but we will work closely with Confor, which includes companies such as BSW Timber, James Jones and Sons Limited, Glennon Brothers and Gordon Timber in my constituency.

To the best of my knowledge, there are no smaller manufacturers of panel products. Producing panel products requires very substantial capital investment. It cannot really be done on a small scale; it has to be on a large scale to work. I mentioned the scale of the investment that Norbord has made in Dalcross, which was well in excess of £100 million.

There is an important supply chain. Those manufacturers are important to the whole rural economy. They support tree planting and growing and support tree nurseries. They are part of Scotland’s overall timber sector, which is moving from being a Cinderella in the economy to being at centre stage. That is largely for environmental reasons, but also because of the contribution that the manufacturers make to construction and to more specialist applications such as furniture making.

I hope that we will, as Mr Doris implied, bring others on board to contribute to the discussion. That might include commercial firms that are involved in processing applications for forestry consent. Their commercial knowledge would be very useful in informing the debate about how we ensure a sufficient supply of commercial timber as a proportion of the 18,000 hectares per annum and in building up a consensus about a stable and long-term approach to forestry.

When you plant a tree, there is no income for 30 or 40 years. That sets the industry apart from many others. It is a long-term business. Norbord, Egger and Kronospan would not be in Scotland if we had not been able to satisfy them that we are aware of their needs for long-term, secure and continuous planting of commercial species.

That is very helpful.

As there are no further questions, I thank Fergus Ewing for attending. The committee will consider whether to approve the application for recognition under agenda item 4, and the clerks will inform you of that decision thereafter. Thank you for your presentation and for answering the wide-ranging and varied questions.

Agenda item 4 is for the committee to consider whether to accord recognition to the proposed cross-party group on the wood panel industry. Are there any comments or questions?

I see no indication of comments or questions. Does the committee agree to accord recognition to the proposed cross-party group on the wood panel industry?

Members indicated agreement.

That concludes the public part of the meeting.

10:20 Meeting continued in private until 11:30.