We are killing SMEs!

[FreddyG]

I could not work out why there are so many small to medium-sized sawmills in the US, while we have almost none anywhere in Europe.

A long time ago, there were two sawmills near us. One was about three miles away and the other maybe 25 miles. The one that was close used a prewar multi-blade reciprocating saw that took so long to process a log that I never saw it finish a log. They didn't last long. My cheap bandsaw sawmill from Woodland Mills (HMI130Max) is ten times faster!

The mill that was further away bought a Linck mill and has since upgraded to a fully automated version that requires no human input. The fully automated version converts a log into sticks of various sizes in three-to-five seconds, depending on length. All the smaller mills in the area were killed off.

And then I thought of Ironwood Acres Timber in Pennsylvania - they are a typical US lumber yard. The two daughters run the mill, the son does the firewood and stacking, father works the slopes, cutting a truck-load every day, mother runs the shop selling finished timber and grandpa does maintenance. A real all-American mom-n-pop operation!

They recently bought a Wood-Mizer LT70 with all the trimmings, including hydraulics full remote handling. With all the options, there was little to no change out of about $100k. What puzzled me was how does a mom-n-pop operation pay in an age of Linck mills doing a finished log every three seconds?

Then it dawned on me - geography! The woods where we used to live can all take 50-ton artics. Harvesting was done with a fleet of forest harvesting machines and it is always less than 20 miles from the tree to the mill. If we look at the big mills in Sweden and Finland, the scale of what they are doing is breathtaking!

In Pennsylvania, the father has to work the steep slopes with a chainsaw and he has to pay the landowner for every tree! I have a little sawmill because I own the trees - it makes business sense! The distances in the US are just large enough and the terrain is rough enough to tip the business case in favour of the small operation.

A fully automated tree plantation, combined with a fully automated sawmill and adjacent finishing factory for tongue and groove, chipboard, etc., just would not work.

That may sound like I am trying to say that America is behind Europe - but there is something else going on here! Between the local mill that did about four logs a day and the giant wood processor that does a log every three seconds, there was nothing. There was no space in the market for mom-n-pop to get an LT70 and work up.

And that is how SMEs started. Someone with a skill or an idea! The idea became a patent. The skill became a business. And there was local demand for whatever he/she had to offer!

Most markets kill SMEs with bureaucracy, taxes and geography. The US after the war was ideal for allowing SMEs to grow. There is still local demand for local businesses. Driving to Pittsburgh or NY is just ridiculous if a builder or homeowner wants a few sticks or even a truck-full. They can get better timber cheaper from the local lumber yard.

And several times a week, the girls drive out with a truck and trailer filled with a few cords of firewood! Nobody is going to drive 100 miles to get or deliver firewood!

 

[Porky]

I remember in the Midlands back in the 80s we had a couple of saw mills - neither exist today. The smell.of wood shavings, the noise of saws cutting wood all added to the experience - long gone.

I dont know why. My best guess many external pressures including health and safety and Insurance costs probably added to their demise. Workers forever lopping off fingers, hands etc, no matter how good the protections it went on and costs rocketed as a result v buying/ importing in cheap crap from china just made the operations unviable.

Not sure what to say to you @FreddyG I guess its just how it is now. I would like to go out after work for a prawn cocktail, steak and slice of black forest gateaux at my local berni inn but they are long gone.

I can't see the UK rewinding back to 1980 in some sort of time shift, sure business needs a real boost to get us back on the map. Have we evolved for the better? Can't say as I think we have.

We drown in red tape and have a government pro rewarding the lazy and shifting us to some government owned utopia where you are paid loads of money in the public sector, where shrinking output is the ideal for as less hours as possible until we completely go to economic ruin whilst china sends us ever increasing levels of tat adding to the unviability of manufacturing ourselves.

I dont see a change anytime soon, your saw mills one day, everything else in manufacturing the next. Industry per sai in the UK continues to be killed off.

 

[Mark T Jones]

I would personally argue that the UK has far too many Ss and not enough Ms, which is a direct result of our light-touch regulation (Where independent business is concerned, we have less regulation than most countries in western Europe)

I'm bot sure that sawmills alone are a great indicator though.

 

[Paul FilmMaker]

I'm half Chinese, been to Shanghai, Beijing, Guangdong etc... and both agree and disagree based on what I've seen. It's not the bureaucracy killing off manufacturing SMEs, rather it's the lack of complete ecosystems.

China's gone from zero to hero in manufacturing because they focused on building ecosystems every 5 years.

A manufacturing ecosystem is where you put all the expertise, suppliers and manufacturers in a single area or a few, small areas. So you get a lot better at manufacturing the product because all the suppliers and experts are in the same place. Even the local Universities and colleges teach that subject. Which is how the Chinese have gone from zero to being the number 1 global manufacturer.

E.g. China's central planning designed Shenzen for EVs. Wuhan and Guangzou as well. It's a bit like car manufacturing centres like Detroit for the US back in the 60s or Birmingham in the UK.

This is normal across China. E.g. hair dryers. The majority of hair dryers in China are manufactured in Cixi. Some in Guangzhou which is a crossover with beauty equipment (Guangzhou's speciality) and Jieyang which is electrical appliance City. And the Universities and Colleges in Cixi teach hair dryer manufacturing. So they're really good at it.

China's goal was to be the world, manufacturing leader and they achieved it. Production is more than the next, 9 countries... combined. So if an area makes doors, there'll be a ton of sawmills nearby. And other SMEs.

This works really well in other countries like, for example, the UK. So we had Docklands for financial services, a zone where the infrastructure and tax incentives were designed for banks and asset managers. Create those hubs in other areas and sawmills will pop up where there's a need. Or a whole host of SMEs.

And saying 'Chinese crap' today, well only idiots are saying that. China's surpassed Western manufacturing standards. Just look at TVs, phones etc... manufactured in China which totally dominate the UK market. Hell, 10% of cars sold in the UK in 2025 were Chinese. BYD's sales jumped last year in the UK by 880% while being excluded from EV subsidies. And that's fuelling growth for a ton of Chinese SMEs in those ecosystems.

 

[DontAsk]

And saying 'Chinese crap' today, well only idiots are saying that. China's surpassed Western manufacturing standards. Just look at TVs, phones etc... manufactured in China which totally dominate the UK market.

Maybe, but there’s still a LOT of CRAP coming out of china via sites such as AliExpress. Just watch a few of Big Clive’s tear down videos if you do not believe me.

 

[Mark T Jones]

I'm half Chinese, been to Shanghai, Beijing, Guangdong etc... and both agree and disagree based on what I've seen. It's not the bureaucracy killing off manufacturing SMEs, rather it's the lack of complete ecosystems.

China's gone from zero to hero in manufacturing because they focused on building ecosystems every 5 years.

A manufacturing ecosystem is where you put all the expertise, suppliers and manufacturers in a single area or a few, small areas. So you get a lot better at manufacturing the product because all the suppliers and experts are in the same place. Even the local Universities and colleges teach that subject. Which is how the Chinese have gone from zero to being the number 1 global manufacturer.

E.g. China's central planning designed Shenzen for EVs. Wuhan and Guangzou as well. It's a bit like car manufacturing centres like Detroit for the US back in the 60s or Birmingham in the UK.

This is normal across China. E.g. hair dryers. The majority of hair dryers in China are manufactured in Cixi. Some in Guangzhou which is a crossover with beauty equipment (Guangzhou's speciality) and Jieyang which is electrical appliance City. And the Universities and Colleges in Cixi teach hair dryer manufacturing. So they're really good at it.

China's goal was to be the world, manufacturing leader and they achieved it. Production is more than the next, 9 countries... combined. So if an area makes doors, there'll be a ton of sawmills nearby. And other SMEs.

This works really well in other countries like, for example, the UK. So we had Docklands for financial services, a zone where the infrastructure and tax incentives were designed for banks and asset managers. Create those hubs in other areas and sawmills will pop up where there's a need. Or a whole host of SMEs.

And saying 'Chinese crap' today, well only idiots are saying that. China's surpassed Western manufacturing standards. Just look at TVs, phones etc... manufactured in China which totally dominate the UK market. Hell, 10% of cars sold in the UK in 2025 were Chinese. BYD's sales jumped last year in the UK by 880% while being excluded from EV subsidies. And that's fuelling growth for a ton of Chinese SMEs in those ecosystems.

China is interesting in a number of way - some good, others less so.

The Far East has a long history of stealth - flooding markets with cheap crap, then steadily improving/westernising until its solid, mainstream product - witness Datsun in the '70s and the Hyundais of the late '80s (dreadful!)

As an aside, the repair man who came to fix my washing machine hates LG - they are all hand made - often touted as a positive, but it means not only variable buld quality, but also variable techniques/components.

Given the role of regulation/red tape, the significant difference is that between communism & capitalism. In China there is no red tape - there a rules, and the punishment for breaking those rules is severe. (it's joked that the starting point for prosecution is death, the role of defence is to negotiate down).

In the west, there is red tape - whilst it may be misguided and over-interpreted, it always starts with the desire to protect the population - labour relations, environment, pollution etc.

To put it simply, lots of people die in making a great manufacturing nation!

 

[Paul FilmMaker]

China is interesting in a number of way - some good, others less so.

The Far East has a long history of stealth - flooding markets with cheap crap, then steadily improving/westernising until its solid, mainstream product - witness Datsun in the '70s and the Hyundais of the late '80s (dreadful!)

As an aside, the repair man who came to fix my washing machine hates LG - they are all hand made - often touted as a positive, but it means not only variable buld quality, but also variable techniques/components.

Given the role of regulation/red tape, the significant difference is that between communism & capitalism. In China there is no red tape - there a rules, and the punishment for breaking those rules is severe. (it's joked that the starting point for prosecution is death, the role of defence is to negotiate down).

In the west, there is red tape - whilst it may be misguided and over-interpreted, it always starts with the desire to protect the population - labour relations, environment, pollution etc.

To put it simply, lots of people die in making a great manufacturing nation!

There are definitely rules. An example of the different rules was when we last went to Beijing, my other half (who's English) commented that a bunch of people were trying to get into a sports stadium. But it looked odd to her. Well, the reason is it was a public execution. And one of the people was being executed for tax evasion.

And it's no longer Capitalism vs Communism. It's Capitalism but deference to the state. In China, I would never, ever say anything bad about the government.

And it's interesting you bring up Datsun or Hyundai. China's method of surpassing Western manufacturing is very specific and even worked in the UK. We'd do well to copy their ecosystem model.

If you talk with major manufacturers who've experienced high end Chinese manufacturing, they're in awe. They'd love something similar. As would I because it stimulates growth in SMEs. And as an SME owner, I like anything that stimulates my growth!