Weak wood market leads to closure of Just Wood

Just Wood of Wallsend near Newcastle upon Tyne has voluntarily ceased activities and is now aiming to sell its wood chipping and recycling equipment.

Proprietor Billy Morgan told letsrecycle.com that he had reluctantly made the decision to close the business because of the difficulties in making a profit from wood recycling.

“We have seen a year where PRNs have been at a ridiculously low price and the Environment Agency doesn’t seem to be able to do anything about the cowboys out there. They seem to simply have accepted that there has been some cheating going but they have done nothing about it at all.”

Mr Morgan believes that higher PRN prices for wood could have made a big difference to his and other wood recycling businesses in 2003.

Bedding
The company’s chipping plant produced material that was used for board making but also in large volumes in the poultry and horse bedding market.

The decision to close Just Wood comes in a market where wood recyclers have seen prices for their material edge down over the past few years.

Wood waste which contains packaging material has generally attracted a price sufficient to offer an adequate rate of return once a PRN income is added in.
Currently wood recyclers will get up to 25 a tonne from board mills if they are on a long term contract. However, prices of as low as 15 a tonne are now being paid by some mills.

Old equipment
There are large volumes of material available to them and some board makers have limits on the amount of waste material they can use, partly because some are running old machinery which cannot take a high waste per centage.

With more local authorities now diverting waste wood at civic amenity sites, the quality of secondary material is also said to be deteriorating.

One expert said: “We are seeing poorer quality wood which is often contaminated as well as large amounts of chipboard which cannot normally be recycled.”
Wood recyclers said to letsrecycle.com that this low grade material will incur a charge of about 25 delivered in.

The sector is now watching closely what happens to the PRN price in 2004 with expectations that it could rise. Much could depend on how active the Environment Agency is in regulating the sector and how the protocol for handling waste wood packaging turns out. This has been produced by the Wood Recyclers Association.