• Germany's mostly family-run sawmills had resigned themselves to demand falling off as the German furniture industry declines. "We think more in terms of generations," says Steffen Rathke. "The beeches or oaks we work with may be a century old. That is something I respect." He and his brother manage the family's Keck lumber mill in Ehningen in Swabia, in south-west Germany. Oak trees delivered there today have been growing since their great-grandfather founded the company in 1903.
Ralf Pollmeier, however, is a man who doesn't set much store by tradition. The 55-year-old son of a master carpenter from Gütersloh started comparatively late in the trade but is now the biggest processor of beechwood in Germany. He and 800 employees generate an annual turnover of about €190m (£170m) from three sites. By his own account his sawmills are "highly profitable". The profit margins are distinctly higher than those of his competitors.
In the early 1990s he dropped out of university to start producing laminated wooden panels for the furniture industry. As American red alder was in demand, he opened a branch in the USA – and discovered that US sawmills could supply him with hard deciduous wood of consistent quality that German firms could not match.
That was not just because the Americans had far bigger sawmills for processing hardwood. The main reason was that in Germany the grading depends on the supplier. There are wide variations in colour, moisture, brittleness and knotting, which means extra work, waste and poor planning capability for the processors. Pollmeier started to take an interest in the technology of the big American hardwood mills. He wondered why his German suppliers could not match it – and spotted a gap in the market.
After visiting a furniture trade fair, he made a snap decision not to build a glued panel works in Creuzburg, Thuringia, as planned but to open a sawmill there instead. Sales of his panels were declining, but after reunification he could take advantage of the generous subsidies for investment in eastern Germany to open a sawmill.
With the Americans as his model, he planned to industrialise hardwood processing. That meant big investment, major automation, mass production, successful branding, globalisation of sales and above all standardisation of the products. From being a customer of the German sawmills, Pollmeier switched to being their competitor.
Today, his mills in Creuzburg and Aschaffenburg process about 640,000 cubic metres of wood a year, which makes them the biggest hardwood producers in Europe.
Whereas Pollmeier has expanded production, many smaller firms have been forced out of business. Two-thirds of German sawmills have vanished: from 921 in 1995 now only 324 are left. They used to employ 26,500 people, but by 2016 the figure had shrunk to 17,000. There are two reasons for this, according to Lars Schmidt of the German Sawmill and Wood Industry Association. One is the fall in orders from their main customer, the German furniture industry, which has shifted production plant to low-wage countries. The other factor is the constantly improving quality of alternative materials, such as plastic-coated MDF panels. In this tough market Pollmeier, the man who popped up from nowhere, has bucked the trend and grown his company.
There are historical reasons why German hardwood sawmills do not come up to US standards. For a long time their customers were satisfied with whatever they were given. So why bother investing in new equipment? Also, processing hardwood is a niche market in Germany. Last year 21m cubic metres of coniferous soft wood were produced but only 1m of hardwood.
A spruce tree grows much faster than a beech, so can be logged sooner, and softwood is easier to process than hardwood. But for years demand for spruce has exceeded supply, making it more expensive than beech. And that is not going to change anytime soon, Schmidt says. However, owing to political pressures, the forestry industry is now going in for more mixed planting instead of coniferous mono-cultures.
That was the second market opening that Pollmeier spotted: exploiting beechwood, an underestimated raw material available in abundance. Other German sawmill operators are proud of processing many different woods. Pollmeier specialises in beech: versatile and cheap to buy but quite demanding to process.
Pollmeier plays by his own rules. Since he set up his firm in 1996, he has been sole owner and managing director of Pollmeier Massivholz Ltd. His speech is to the point and he wastes no time. He more or less lives for and at his firm, based next door to the headquarters in Creuzburg, a small town near Eisenach of 2,500 people. His firm is a medium-sized enterprise that went all out for international trade early on and now has customers in 80 countries.
While other German companies were still largely producing for the home market, Pollmeier was already doing big business with China. And he anticipated how the sector would develop. Since 1995 the volume of exports by German sawmills has risen fivefold from about €300m to €1.5bn.
"Right from the start, the method was learning by doing," says Pollmeier. “Trial and error – there is no other way." His dealings with others are unconventional. Steffen Rathke from the Swabian Keck sawmill describes him as a "wild dog", a term meant as a compliment. Asked how others in the business reacted to the rise of Pollmeier, Rathke suggests incredulity, respect and a touch of resentment.
According to Pollmeier, his first sawmill began as a good copy of an American one. "That was new in Europe." Why had nobody hit upon the idea before? He has no answer to that. "If other people had done the same thing 30 years ago, this firm would not exist," he says.
But back then producing on the American model was thought to be too complicated; no customer needed beech of US quality and nobody would pay extra for it. Even Pollmeier found it tough at first; he had to experiment with production methods, learning the hard way that German beech requires different treatment than American red alder, which the machines were designed for. "The beech is a bit of a drama queen," says Volker Thole, head of research at Pollmeier. The wood is not homogeneous, each trunk is different, with wide variation in the structures within it. So it is difficult to make standardised products out of the raw material. And standardisation – with regard to knot-frequency, colour and dryness – is key.
Keeping the customer happy
At the end of the production line in Pollmeier's sawmill in Creuzburg, Christian Herrmann and his colleagues scribble their marks on the finished boards. They are "graders”, assigning each board to one of 17 quality classes. They work very fast, but the job is not easy. Training takes half a year. "White wood free of knots is very good," says Herrman. "You try to upgrade the board by cutting off the pieces of knot on the edges." Depending on the colour and number of knots, the price varies between €140 and €800 per cubic metre. "The panels range from almost knot-free or only knotted at the edges right up to full of knots. If customers need big surfaces free of knots, such as those making doorframes, they have to pay for them. Manufacturers of pencils or toys couldn't care less about knots, they only need small pieces of wood and they come cheaper," says Jan Hassan, a works engineer. "Permanently measuring the boards during production was new, just like the cutting technology and the pre-sanding for precise quality-grading." It is this American-style grading that makes Pollmeier's boards competitive on the world market. They are even shipped to Mexico, where furniture for the US market is manufactured.
A great deal of effort goes into maintaining these standards and protecting customers from unwelcome surprises. At the start of the production process the raw log is measured using 3D laser sensor technology to decide how best to saw it. "That used to be done with a head or frame saw. The logs were cut like with an egg slicer, without regard to quality," says Pollmeier. "Nowadays we saw around the log from outside to inside. The poor-quality wood inside, the pith, is not included in the timber." The extra effort is worth it because of the high degree of automation and the huge quantity of boards produced.
Pollmeier's second sawmill, built in Aschaffenburg 10 years ago at a cost of €120m, he says, allowed him to apply what he had learned in the experimental phase in Creuzburg: more automation, and the next step on the way from a skilled craft to an industrial operation. He intends to further standardise the production sequences, including checklists for routine maintenance. For "fine-tuning the workflow", as Pollmeier calls it, staff receive detailed instructions on tablet screens. "The aim is to avoid surprises. We can now operate the plant with non-engineers with a higher degree of reliability than using specialists just trusting their experience. You have to break down the specialist expertise into small, manageable steps in order to steer the people working on the spot."
Creating extra potential
Pollmeier's industrial business model opens up opportunities for smaller firms, too: Rathke benefits from Pollmeier's restriction to three standard lengths. Customers looking for longer beechwood boards of up to 6.3 metres for building staircases can come to Rathke. Another advantage is that he is not limited to one kind of wood. He works with oak, ash, maple, birch and beech. "Fashion changes. We can benefit from every fashion and do not depend on beech."
Things are going well for Pollmeier. But even so he is now investing millions in his next venture. He wants to make a new beechwood material marketable: stable laminated veneer lumber for building in timber, such as for load-bearing parts, walls or roofs. Constructing the works for it in Creuzburg in 2013 cost another €120m.
Pollmeier aims to prove that beech, like spruce, can be used in construction as veneer substrates. The 3.5mm veneer panels are glued in layers at high pressure into extremely hard, thick beams. Knots and other irregularities in the individual layers cancel each other out. A beam made of laminated beech veneer can be slimmer than one made of spruce and yet have the same load-bearing capacity. Its sturdiness makes it possible to design wider roof spans: wooden beams could replace steel.
The headquarters of the software firm Euregon in Augsburg show how that can look: the key parts of the whole building are built of beech from Pollmeier. And with wood is coming back into fashion, there could be a huge market for the new product.
But in practice it is far from easy. "When we have optimised all the production processes and are fully operational, it may be very profitable," says Pollmeier. "But we have not reached that point yet. We are using too many people; production performance is not right yet. Some processes need to be much more efficient. That means some of the plant will have to get a major overhaul."
To keep the price of his veneers competitive Pollmeier is still incurring losses. And it isn't just the production side that presents challenges; it is just as difficult to carve a market for material that is still relatively expensive to manufacture and not easy to process. Although the veneer factory produces and sells, it is more like a very big, privately financed test laboratory than a functioning workshop.
Practically everything is uncharted territory. Thole, the research chief, says: "If we knew what was actually going on in the contact area between the glue and the surface of the wood, we'd be much further on. The ideal glue has not yet been found." The next step could be hybrid materials such as wood-concrete composites for supporting ceilings. The aim is to combine the properties of different materials, such as the high pressure resistance of the concrete with the high tensile strength of the wood, and create new potential applications. "We are pursuing these issues with universities. The capacities of the material are still a long way from being exhausted," says Thole.
Ralf Pollmeier has built an astonishing factory on the edges of the Thuringian forest. Part wood factory sternly targeted at profitability and industrial production, and part laboratory: who knows what the beech man still has up his sleeve? Is he a gambler or a wild dog, or both? He probably does not know yet himself.
Seeing the wood for the trees
Life's a beech. German sawmill owner Ralf Pollmeier finds his own answers to knotty problems.