There are two main reasons for troubles for Finnish sawmills. Firstly, price of wood has risen slowly and now comprises 72% of the price of any finished sawed product. Secondly, basis for timber income taxation changed from land area based taxation into sales based taxation. Together these result into diminishing timber sales and rising timber prices, which in turn result into diminishing production and lower profit margins.

How to get out of this vicious circle before everybody in the industry have gone bankrupt? According to analysts the answer is by increasing the value of finished products. How to do that? To my opinion, log home companies stand at better place as value adders for wood than pure sawmills…

Finnish paper mills have been pushed into corner. Traditional cycle of currency devaluations in order to improve paper companies’ competitiveness has come to an end because of Finland’s European Union membership. Now it is the company that has to change instead of the currency value.

Finnish paper companies have been pushing hard to get in shape. Investments have been done near end markets and remote Finland has lost its importance as a production location. Right now the unimaginable is happening. United Paper Mills has announced massive downsizing programs, which focus especially on Finland.

Arrangements in the use of capital are another road that most paper companies are taking. Properties are sold to garner money to be invested in core functions. This in turn affects sawmills. There are lots of sellers but few buyers. Moreover the logging industry has been on the red for five continuous years and things are not going to get better any time soon.

Where am I getting at? Demand for various timber products in Finland is about to drop and that means business for log home manufacturers, which can benefit from lower raw material prices.

Kauppalehti - the biggest economic newspaper in Finland had overly positive look on the future of log building in Finland. This resulted in 16% increase in stock price of Honka B-share. Increase is out of proportion because the ownership of Honka is very centralized and trade volume is low so few sales can rock the price greatly. On the other hand, Friday saw exceptionally high trade volume, totaling 25 million euros.

I am not as optimistic, I think that growth trend remains steady, but there will be increasing competition at every market area. Globally low interest rates have saturated house ownership market and while big domestic markets are saturated, the growth can be found from export markets. My take on the matter is that log home company can only be successful by excelling competition and eating market share. What do you think? You can check Honka financial information at Google Finance.

Monster week behind, you know those relentless weeks that just don’t seem to end. Now as work matters are behind I can focus on hobbies and bring you the weekend update on what happened especially on Finnish log home industry this week.

I got curious on what there is available on log mobile homes in the net. I made a search with Google like this “log mobile homes” and results were scarce only about 576 results. I started to wonder is it really so new an idea to have mobile home, which is made of logs?

In theory, the modular structure that log homes have makes it possible to put them into pieces and back together again – movable solution so to say. Difference with traditional mobile homes is that log mobile homes often stand alone from the ground, while traditional mobile homes have wheels under them at all times. This frequently gives difficulties for manufactured log home owners who want their log homes to be classified as log mobile homes.

So what about those search results? I found following results helpful:

http://www.house-uk.co.uk/
http://www.mobile-parkhomes.co.uk/

These two services seem to be most appropriate, however, looks like they belong under same umbrella, so no real competition between the two websites.

Rest of the sites that come up in the search are basically junk sites or then vaguely related like photographs or real estate sites that offer opportunities to own something. It appears that log mobile homes are really unique and new invention. Or maybe I should try to use different keywords. Maybe later.

Later is now (7th April 2006), slightly different view to log mobile homes comes in form of mobile log homes.

Last Friday I went to see a customer who wanted to remodel his kitchen. Log home had a wonderful scent as I entered the building. There was fireplace, fresh boiled coffee, wooden furniture, paintings and sauna. Every single piece gave something for the whole log home atmosphere.

Unfortunately there was a problem. Original builder of the log home had done some basic mistakes while building the log home. Firstly, the total erecting process had taken more than two years. This is a clear indicator of some compliance problems between various work stages. Secondly, materials were sort of shoddy, therefore brining down the durability of the log home. Thirdly, log home had combined structure of log shell with extra timber-frame insulation on inside. All of these features made it very challenging remodeling project.

How those challenges materialized? Present kitchen was built on three different kinds of surfaces. There was brick wall, outer log home insulated wall and inner timber framed light walls. Differences in log home settling were drastic, because there weren’t proper mechanisms on place to adjust for settling. As a result, kitchen cabinets were skewed to multitude of directions. Original installation work had also been rather poor as there were some extra holes on the cabinet doors.

We spent couple of hours mapping their needs and sketched some raw ideas for the future kitchen. Now I am in the process of drawing plans based on our initial discussion. Soon I will have a suggestion and related cost estimations to show for them, then we know if there is need to make detailed blueprints. It was such a nice log home, so I have special interest towards this deal. I will let you know how things turned out.

I wrote about the difficulties of KB Home and we all know the mess in which Martha Steward has been. Now these two seem to think that 1+1 is greater than 2. The purpose of this unlikely match is to create Martha Steward-inspired communities throughout the country. Martha will deliver a line of interior and exterior home products and designs. KB Home homebuyers will have these options available exclusively. Amazing, isn’t it? I wonder when we see a match between Jack Wolfskin and some log home manufacturer…

Remodelers are seeing decline in remodeling demand. There are two main reasons for this:

Rising interest rates have curbed refinancing, which traditionally has provided finances for remodeling. Now people don’t have that much free-cash lying around, so they put remodeling in hold.

Slowing home sales affects so that as people are not moving to a new apartment, they don’t have to fix it. Old home is usually in average condition, also seller is not getting any sales profit that could be put into remodeling new home.

However, there is a third trend that supports remodeling. As families’ financial situations become scarcer, they tend to postpone large investments and settle for smaller ones. This tips the scale for remodeling, as it is often cheaper to fix something than buy completely new.

New and existing home sales were down in January from December. Analysts are seeing a trend in slowing home sales. Rising interest rates have contributed to slowdown but sales have not stopped altogether, but have just reached a plateau of sales activity. Even this slowed-down tempo of home sales will result into historically high pace of home sales.