The crisis — with opportunities for the timber and woodworking sector!

Vanessa Giraud is manager of the Capital Development Strategy as well as the Timber and Eco-materials fund at Bpifrance. She notably takes care of the Timber Fund for investments dedicated to businesses in the timber and woodworking sector. She gives her present view of the crisis that surrounds us and offers some advice to the sector’s stakeholders for transforming crisis into opportunity and succeeding with their restart.

How has timber and woodworking fared during this unprecedented crisis? 

It’s still a bit early to draw any firm conclusions. Nevertheless, one thing we have observed is timber’s ability to adapt. Each activity in the sector has experienced the crisis differently, but I have generally found that directors have kept their cool in the face of this unheard-of situation and shown resilience and solidarity. The sector’s companies are mostly family structures with effective social dialogue characterized by trust and discussion. Employees have remained motivated. The rebound has been quite dynamic, stimulated by good businesses organization and by sustained demand from the furniture sector and the resumption of construction work. We nonetheless lack visibility and can’t tell whether there will be any counter effects in the coming months, for example in the construction sector due to delays in planning permission.  

What main things have been learnt from this crisis? 

Like any crisis, it has accelerated underlying trends. One thing for sure is that among these trends, the one that the crisis has led businesses across all sectors to engage in very quickly is digitalization, which has proved an effective solution at many levels. For instance, during the lockdown, all sales of ONF (French forestry board) cut timber took place on line. Likewise, digital solutions have expanded the traceability of supplies to worldwide level. This underlying trend, which we support, is going to expand further in the future.
Furthermore, timber as the first biosourced material will of course play a big part in the ecological transition. The steep rise in climate concerns and the desire to be masters of our own supplies can only be good news for French converted timber.

What levers do companies have available to relaunch business? 

The lockdown period has caused French people to refocus on their habitat. They imagine other living environments, with spaces such as timber decks or house extensions. They rearrange their interiors to optimize their living space and make it more comfortable and modular. Similarly, public buildings and venues as well as work spaces are going to change, to adapt to new constraints arising from healthcare measures. The French offering (design, manufacture, installation) has a real card to play in the light of these new demands. An initiative from the French furniture association, l’Ameublement Français, which has just launched its “Meublez-vous Français” (furnish French) campaign, is remarkable on this front as it illustrates the energy of its stakeholders as they exit the crisis and the sectorial spirit and French Fab we promote at Bpifrance.

How is Bpifrance assisting timber and woodworking businesses in this crisis? 

Bpifrance has developed assistance to businesses quite a long way, as a complement to investment and funding. Our assistance teams didn’t drag their heels in adapting their actions to the crisis (going all-digital because of the lockdown, making “care calls” and “expert calls” to support and advise directors, etc.)
We also develop and run “Accelerators” for French SMBs and micro-enterprises (ME). These are bespoke assistance-for-growth programmes lasting 18–24 months, promoting SMBs and MEs alike. All these programmes are also adapted to meet companies’ post-crisis expectations. The timber & woodworking sector, like many others, has its own Accelerator focused on relaunching activity.
 

What Bpifrance financial tools do the sector’s stakeholders have access to?

As well as our general tools for all sectors, we have developed a range of instruments dedicated to the timber & woodworking sector (envelopes exclusive to the sector). We began after cyclone Klaus in 2009, creating the first Timber Fund, an investment fund dedicated to timber conversion companies. In 2014 we created a 2nd Timber Fund dedicated to timber and furniture, and this year we are launching the 3rd generation fund dedicated to timber, furniture, and eco-materials. With an envelope of €60–80m, it will be bigger than its predecessors. Its so-called “intervention tickets” will mostly be in the €1–7m range to assist development or transmission projects in the sector. This fund will invest in capital and near capital funding to help the sector’s businesses grow, and like all Bpifrance’s funds it will represent minority shares. We also have a range of loans dedicated to the sector: the timber & woodworking sector loan (€300k–1m) and the participative timber loan (€40k–300k).

Last but not least we underwrite woodcutting deposits.

How about a piece of advice to the sector’s businesses in order to get the pick-up rolling?

Crises create risks, but they can also create opportunities. When you experience a rupture like this one, it’s the right time to accelerate changes and transitions that are often put off through lack of time.  To succeed with the restart, it’s important to act in accordance with new expectations concerning the environment and supply short circuits and to invest in digital along with agility and flexibility in the organization. 
It’s often said that storms bring out the best captains, but it also brings out the best crews. Take great care in choosing the people around you, not just your employees but also commercial and financial partners as well as suppliers. When you set out on a transformation plan, make sure you have good accompaniment, bank on associates who share your vision and are able to follow you in the long term, and enrich your ecosystem for exchange and sharing and to avoid going it alone. 

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