With a surface area of about 90,000 hectares, more than a third of Luxembourg is covered by forests. Every year, some 750,000 m3 of wood are produced in the country’s forests, of which 500,000 m3 are actually harvested by man. As a result, the forest represents an exceptional capital generating interest, of which only two thirds is used: an almost unique model of sustainable harvesting, combining ecological, economic and societal considerations.
“The demand for wood has increased progressively over the last years,” says Philippe Genot, manager of the Luxembourg Wood Cluster. “This can be explained by several simultaneous factors: the implementation of national policies around sustainable development and climate change, the rise of the circular economy, or the regionalisation of value chains”.
At the same time, the country has embarked on a path of advanced digitalisation, spurred on by the data-driven innovation strategy to support the emergence of a sustainable and trust-based economy, presented in May 2019.
1,200 companies, 19,000 employees
There are about 1,200 companies in the timber industry – almost 90% of which are SMEs – with a total of about 19,000 employees. “The predominance of small structures makes the challenge of digitisation even greater,” notes Genot.
The low rate of digitisation in the sector partly explains the problems of linking supply and demand: the value chain is structurally not optimal for allowing a high degree of exchanges.
This is why, for the past two years, the Luxembourg Wood Cluster has been working in close collaboration with public and private players in the field to design solutions. It is from these reflections carried out within groups of experts that the idea of setting up a trading platform was born, the principle of which was validated by all parties concerned last December.
Public and private partners
This Digital Timber Trade Platform, also known as e-Holzhaff, aims to establish a direct link between the supply and demand for wood, whether raw or already integrated into the value chain. “It is also essential to be able to effectively link all companies offering services in wood processing,” says Philippe Genot. “Imagine a carpenter looking for regional oak. He will always find a forest owner to sell it to him, but there will also be a need to implement a series of ancillary services to transport, cut, dry, package and deliver this wood to the carpenter. The platform will enable the carpenter and the forest owner to have a global view of all the other intermediary players likely to be involved. Everything will be done digitally and intelligently”.
This digital platform project brings together a number of partners: the Ministry of the Economy, the Ministry of the Environment and the Administration of Nature and Forests on the public side, and the Lëtzebuerger Privatbësch, Fedil Bois and the Fédération des Artisans on the private side.
Luxinnovation, the catalyst
“We have launched the part dedicated to market analysis and the elaboration of the business plan for the coming months and years,” says the manager of the Wood Cluster. “Between now and its official launch, which we expect to take place this fall, we will evaluate different scenarios for the development of the project”.
Once it is launched and reaches its cruising speed, this Digital Timber Trade Platform is destined to fly on its own. Luxinnovation’s mission is to act as a catalyst and facilitator to get the project off the ground. “The idea is that it will then be managed, within two years, by one or more of the partners involved,” explains Mr Genot.
“The development and implementation of this platform is a good example of Luxinnovation’s added value”, says Sasha Baillie, CEO of Luxinnovation. “There is no other player in Luxembourg capable of bringing together all these internal skills and external partners. This is a very nice model to follow for other sectors, for which the creation of this type of platform could prove useful in the near future”.