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B.C. lumber trade delegation to Asia encouraged by response

January 4, 2016

By: Vancouver Sun

It sounds a bit contradictory to call the province’s recent forestry trade mission to Japan and China a success when British Columbia’s lumber shipments into the region are on the slide.

For industry officials, however, the trip at the end of November was about maintaining their presence, even during a slowdown in those countries, and to “move up the value chain” in those markets toward higher-value forest products and away from plain lumber, said industry representative Rick Jeffrey.

In that sense, “it was quite a successful mission,” he said.

The 40-member delegation, led by Minister of Forests Steve Thomson, spent three days in Japan then three days in China to advance that cause.

“The long-term outlook is that we’ve got to move the dial and get into new markets” in both countries, said Jeffrey, who is both CEO of the industry group Coast Forest Products Association and chairman of the trade-oriented Canada Wood Group.

B.C.’s success in breaking into the Chinese market over the last decade was a key factor in the province’s strategy to diversify its markets for lumber products during the crash of the industry’s key customer, the U.S. housing sector.

And B.C.’s Chinese breakthrough coincided with the ramp up in B.C.’s timber harvest to clear out dead trees from the mountain pine beetle infestation, Jeffrey said, which allowed the province’s sawmills to pump large amounts of cheap lumber in to feed the demand for concrete-forming material in China’s booming construction sector.

Now, however, B.C.’s lumber producers are starting to run short of that dead timber, which will leave them constrained while forests recover and makes it more important for companies to move into higher-valued products such as engineered cross-laminated timbers and Parallam beams.

The delegation made the trip while lumber shipments to Asia have been slowing down.

B.C. trade figures show that as of the end of October, lumber exports to Japan were stagnant, just under 1.8 million cubic metres, unchanged from last year, but worth slightly more at $621 million.

Shipments to China, however, at the end of October were down 16 per cent, both in volume and value, to 5.3 million cubic metres worth just under $1 billion.

“Exports are down (but) that wasn’t unexpected,” Thomson said in an interview. “China’s economy went through those explosive (double-digit) levels of growth, and now the’re settling down to growth of 6.5 (to) seven per cent.”

However, Thomson said the delegates still found buyers willing to import lumber in an economy that is “still strong, compared to other areas.”

Jeffrey said the Japanese and Chinese markets are very different, but both are evolving in similar directions that B.C. producers can gain access to.

In keeping with setting more aggressive goals to curb greenhouse gas emissions, both countries are beginning to put a premium on using more wood in construction for its lighter carbon footprint, Jeffrey said.

In Japan, where housing starts are expected to shrink along with its aging population, Jeffrey said B.C. is promoting the use of its engineered wood products into mid-rise commercial and residential buildings, such as care homes for the elderly.

“That’s one of our target markets there,” Jeffrey said, and industry representatives had some good meetings with Japanese customers interested in developing new materials to fit into that type of construction.

The delegation opened a new showroom for B.C. Wood Specialties Group in central Tokyo, which the agency’s CEO, Brian Hawrysh, said has been an objective for a long time.

“It is an effort to go further up the value chain in Japan,” Hawrysh said, in a market that the group’s members view as a strong alternative market to the U.S.

In China, Jeffrey said the delegation renewed a couple of memorandums of understanding with building agencies, and signed a new one, promising to co-operate on building standards that promote the use of wood in construction.

“They have an imperative to clean up (greenhouse-gas) emissions,” Jeffrey said.

On the promising side, Jeffrey said China, in its 13th five-year economic plan, acknowledged that wood is a climate-friendly building material that it wants to see used more in construction.

And Jeffrey said they see increased interest in using more wood to finish the interior construction of highrise apartments and hybrid steel-frame and cross-laminated timber buildings, which is viewed as being more environmentally friendly.

“That stuff was all critical in moving the dial in China,” Jeffrey said.

By: Vancouver Sun

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