“Trust and safety are decisive”

The Pfeifer Group processes every year about three millions cubic meters of round wood in its plants. And it is therefore the larger buyer in Europe. How is it possible to establish sustainable relationships with suppliers on such a sensible market like the one of round wood? A speech with Ingomar Kogler, the head of round wood purchase of the Pfeifer Group.

Mr. Kogler, from which countries comes the timber that is processed by Pfeifer?

Kogler: “We purchase about 93% from countries in which we are established with production sites. Therefore from Germany, Austria and the Czech Republic, though the larger part comes from Germany. The rest comes from countries such as Slovenia, South Tirol, Switzerland, Poland, Norway and the Baltic area. Mostly between the cutting and the processing location the linear distance is of maximum 150 km. Beside round timber we also derive wood chips as fuel from our power plants and sawdust”.

Who are the suppliers?

Kogler: “The structure of our round timber suppliers is very diverse. This goes from small, private forest owners, trough farming communities, up to very big companies as for example regional forestry enterprises in German Bundesländer and the Austrian Federal Forestry Office. In order to have an idea of the size: just the Bavarian state forest cut every year about 5 millions cubic metres round timber per year! At the same time, we also have long time partners that take a manageable quantity of timber from their forests. Both are for us important”.

In the sector there is the bon mot that says that wood is not sold but distributed. Is this true?

Kogler (laughing): “This is somehow excessive. Although a core of truth is hidden in this escalation. Wood is a desirable raw material. And forest owners look very careful at whom they do business with. The value of sustainable relationships between forest owners and purchasers is generally very high. Especially in Tirol, where we have our company headquarters, everybody knows that the demand clearly exceeds the local offer”.

This means that therefore the price is relevant above all?

Kogler: “As in every business relationship, financial reasons play a very important role on both sides. But factors such as security and trust are mostly relevant. We receive by our forest owners a big trust impulse, when they entrust us their wood. What we receive, has value. It does not matter if wood is taken shaped on the forest road or if it is delivered free domicile. The final measurement and quality proof that serves as reference for the calculation, is done at our factory. This is allowed only to partners that one knows and value”.

“Where individuals decide requires, beside control, above all trust”.

These procedures are however even digitalized long since, or not?

Kogler: “Of course we work in the measurement with calibrated and digitalized laser technology plants and according to the Austrian wood business practices or according to the framework agreement on factory measurement. But at the very definition of timber type and visual proof of fungal infestation, knots or characteristics of the core, the judgement of a person is still decisive. And where individuals decide requires, beside control, above all trust”.

What is trust based on?

Kogler: “On punctuality in taking timber, correctness in the definition of qualities and on the capacity to make a consistent and reliable calculation. The payment on time is obviously assumed. For our round timber purchaser is of advantage the fact that we at Pfeifer have been able to guarantee this quality for many years in the daily work. This is a big part of our business culture”.

“As processor, we want to get wood from the regions, in which we manage our sites”.

Where do you believe are the future challenges in matter of raw material supply for the entire sector?

Kogler: “We manage in the Pfeifer Group integrated sites, in which round wood is processed 100%. This requires also a certain continuity in the supply of raw materials. The sustainable mobility of raw material, to get wood absolutely from forests, is therefore decisive. This is ensured by the large state forestry businesses. For many smaller businesses there is in this sense still upside room. The regular managements would be important above all in terms of sustainability. This is good for forests. And as processor, we want to get wood from the regions, in which we manage our sites”.