Niche Vs. Standard
products and the
Due Dilligence System
A niche product is a distinct segment within any given market, something that is specific and specialized for a purpose. Wood has been used for thousands of years for fuel, construction material, for making tools and weapons, furniture and paper. More recently is being used as feedstock to produce purified cellulose and its derivatives, such as cellophane and cellulose acetate. See a few links I posted earlier on LinkedIn on how some of these products will be very useful in future.
Standard products at Global Timber are logs, sawn timber and veneer.
Global Timber focuses on logs and sawn hardwood as our main products. Standard products are items we can delivery in larger quantities, for example, Oak logs in ABC quality from 30cm up x 3m longer that is widely used in the flooring and furniture industry, where manufactures got a program with variation in quality of products and can use all qualities of the logs and all widths/lengths as well. A product where buyers will have very high yield and thereby the product become high value for money for them. Another example are the standards grades of NHLA lumber and European AB/ABC/BC timber. You can read more about them in my previous posts.
An example of our standard products from America can be several species like Oak, Ash, Walnut in 4/4, 5/4, 6/4 and 8/4 thickness 4” wider x 6’ longer in 1 COM and 4’ longer in 2COM or European species like Oak, Beech and Ash unedged in thickness 27/32/38/52mm x 150mm wider x 1.8m longer in ABC grade. These kinds of products are widely available and is a standard product at Global Timber, something we can deliver in consistent and good volume in a “normal” market situation. Our niche products on the other hand are items we specialize to produce to specific needs. Something where our customers need a very specific product to maximize their yield and minimize their wastes because the material, they buy is normally high in price. With higher price comes a specific product tailor made to specific production. Have you heard the phrase that sometimes you need to spend to save? In this case, it is absolutely true.
Compare it to a manufacturer who must make a 1.5m long handle in 20x20mm. You can buy a container of random width and length 25/26 mm Beech. Or you can buy 1.55 m long elements in 25x25mm…. the waste from buying random width will for sure be high compared to buying cut to size elements ready to use. Production will be much faster as well because the manufacture does not need to cut to size and run through a surface planner before finally shaping the handle. Just shape it as first process.
A specific product can be for a manufacture who need small components that are defect free and got uniform color. Like Beech elements we supply in pretty good quantities to two specific customer who do not want to have any waste. Another item is European Oak to the flooring industry where it is essential to get a super high yield on incoming raw materials. So, we sell them tailor made widths x length products for them to gain a super high yield. Same story for the Door industry but here focus is on length rather than width. A standard door got a standard length, so why buy random length if we can offer fix length?
Tool handles for garden tools. Think about it, how long is the handle on your rag or shovel? Broom handles too. 2m or 1m, no it is something in between. So those manufacture need to buy cut to length otherwise they could soon be with 20% waste. So, Hickory, Beech or Ash in cut to size length in 2” x 2”, all defect free.
For decorative items it can be color that is the all-important factor. A wooden decorative bird maybe needs dark and light color, but it needs to be the same dark and light color on all the 1000’s of birds. We can offer uniform color example smoked Oak and natural Oak, Walnut (dark) and Ash (light).
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A Robust Due Dilligence System
Global Timber has implemented the EU security system that prevents trade with illegal timber, also called the Due Diligence System. Through this system, we verify the origin of the timber we import in order to exclude controversial sources.
The following sources are considered controversial:
• Illegally harvested wood;
• Timber coming from territories in which traditional and civil rights are violated;
• Territories and regions with armed conflicts;
• Natural forests that have been converted to plantations;
• Forests that are planted with genetically modified trees;
Step I Information gathering
As a first step, we collect information from our suppliers. Starting with a supplier declaration form. The declaration contains a commitment not to source wood from controversial sources, as well as information on the origin of the wood at sub-supplier level. We collect details of the suppliers, such as address, VAT number, as well as information about the administrator. We also collect information about the certification status of the supplier.
Step II Assessment of the risks
Based on information collected from step one, we conduct a risk assessment. The risk assessment is done on country and supplier level.
Step III Risk Mitigation Tools
Using the results from the risk assessment, we have developed a set of measures in order to mitigate the risk of controversial material inflow to a negligible level. Suppliers and deliveries for which the risk cannot be mitigated are not accepted in our supply chain.
One of the most important risk mitigation tools we introduced for Brazil is Legal Verification Programme.
The Legal Verification Programme is a verification of every new chain of custody from Brazil. Other risk mitigation tools include visits to the sawmills, on-site auditing and media monitoring.
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