Trade Mission Sets New Record For Lumber Sales

Posted by Rumin Mann
November 5th, 2010

Companies taking part in the forestry trade mission to China have generated sales of 418 million board feet of lumber, Forests, Mines and Lands Minister Pat Bell announced today.

“Total sales orders taken by the 2010 trade mission are five times greater than the China mission of just two years ago,” said Bell. “This incredible surge in demand shows that B.C.’s annual trade missions and other marketing efforts to grow the Chinese marketplace are paying off in spades.”

The forestry trade mission, led by Bell and including senior executives from industry, made several major breakthroughs to promote wood-frame construction and boost the demand for B.C. lumber in China’s major population centres of Shanghai, Tianjin, Beijing and the Hebei and Sichuan provinces.

One highlight of the mission involved a groundbreaking for a wood-frame construction project in the Tianjin Economic Development Area (TEDA), 160 kilometres southeast of Beijing. An agreement for a multi-storey, wood-frame construction project was just signed in March, and now construction is starting on a residential building and two office buildings.

TEDA is one of most rapidly expanding areas in China and has experienced an increase in GDP of 22.5 per cent each year over the last five years. Senior TEDA officials also indicated their interest in establishing a free trade zone for lumber, which would provide a gateway to northeast China for B.C. lumber producers.

As well, Bell, Natural Resources Canada assistant deputy minister Jim Farrell, and Chinese Vice-Minister of Housing and Urban-Rural Development Baoxing Qiu launched the inaugural joint working committee meeting to find “Made in China” solutions to existing barriers to six-storey, wood-frame construction. Vice-Minister Qiu was also receptive to Bell’s idea to demonstrate the benefits of pre-fabricated wood-frame housing by assembling a pre-fab home during China’s three-day green building conference in March 2011.

Tolko Industries benefited with two major contracts finalized during the trade mission.

One contract will see Tolko’s Soda Creek division shift its focus to supplying stud lumber to China National Beijing Materials (CNBM). The second signing was the renewal of a contract that has Tolko shipping the entire output from its Quesnel operation to China.

Other B.C. mills that have re-opened or added shifts to take advantage of strong demand in the rapidly growing Chinese market include Canfor in Quesnel, Western Forest Products in Ladysmith, and National Choice Specialty Wood in McBride.

“Given the downturn in the U.S. market, the continued increase in sales to China is excellent news for our folks,” said Frank Everitt, president, local 1-424, United Steelworkers Union. “The momentum in the China market not only provides for continued employment for workers across the North, but also opportunities for more mills to re-open.”

In addition to volume, the B.C. forest industry is also seeing a significant increase in the quality of lumber being exported to China. An estimated 35 per cent of softwood exports to China are now construction-grade quality, compared to just 10 per cent a few years ago when the bulk of orders were for economy and utility grades.

“It’s clear to me that government’s strategy for marketing B.C. wood products in China is working,” said Hank Ketcham, president and CEO, West Fraser. “Since my first trade mission two years ago, I’ve noticed a dramatic increase in wood sales. As well, instead of us promoting wood, many developers we met with were telling us the benefits of working with wood.”

Exports to China up to and including August of this year are valued at about $342 million, up almost 75 per cent from the same period in 2009.

Photos from the B.C. forestry trade mission to China are available at:

http://www.flickr.com/photos/bcgovphotos/sets/72157625274492988/

Source: Ministry of Forests, Mines, and Lands News Release – Nov 5, 2010

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