OK, you have a decision to make: either you are going to attend the BC Wood AGM and Export Market Conference September 13th in Kelowna or you are not. Sounds simple enough, not something you're going to lose sleep over, right? Wrong! It's a big decision that will have long-term consequences to your business. So let me help you make an informed decision. Here are some of the highlights and benefits to you and your business:

Highlight	Benefit
The largest gathering of secondary forest products manufacturers in Canada	You're in business; you already know the importance of networking.
The Honourable Minister of Forests Mike de Jong and the Honourable Minister of Natural Resources Herb Dhaliwal	Both the Provincial and Federal Governments have announced new programs for our industry - find out how your firm can benefit.
The best market intelligence available	You belong to BC Wood because you understand the importance of marketing - here's your chance to get the inside scoop on opportunities in the US, Japan, China, India, Korea, and the EU and talk directly to our in-market representatives.
Panel on Funding Opportunities	Find out how to access some free Government money.
Panel on Eco-certification	Find out if Chain of Custody certification is for you and compare the systems available
Stephen Poloz, Chief Economist, EDC	Long term planning - Stephen's got the best crystal ball around.
Dinner and Gordon College	Dinner is included for your $99 and speaker Gordon College will blow you away - you'll walk away with a full stomach and a whole new perspective.
Golf and Grape Stomp and BBQ	BIG TIME FUN!

Bottom Line? If you attend one BC Wood event this year - make it this one. You will not regret it. At the end of the day on Friday, if you don't think your $99 was well spent, I'll give you your money back.

Bill Downing, CEO

BC WOOD 2002 ANNUAL GENERAL MEETING AND EXPORT MARKETING CONFERENCE
The Premier Event for the Secondary Wood Products Industry
Schedule of Events

Hotel Information

BC Wood has arranged group rates at the following hotels: The Grand Okanagan Lakefront Resort - 1310 Water Street - Phone (250) 763-4500 Reservations 1-800-465-4651 Fax (250) 763-4565 and Accent Inn Kelowna - 1140 Harvey Avenue - Phone (250) 862-8888 Fax (250) 862-8884

First Ever BC Wood Reman Mission to Southern China

Mike Jahraus - Managing Director - China, India, Taiwan

We now have a full contingent of BC Wood members confirmed to head-off to southern China on September 21 to 29, 2002. Remanufactuers and specialty sawmillers (both coastal and interior) are attending this mission. The trip will focus on supplying specialty lumber and components to Chinese furniture manufacturers and other wood buyers in Guangzhou, Zhongshan, Dongguan, Shenzhen and Shunde. With strong support from our Shanghai office and a schedule designed for generating inquiries and sales, we anticipate this to be a very fruitful mission for participants. A follow-up mission to the same area is planned for March of 2003.

For more information please call me at 604.556.3373.

Indian Market for Imported Furniture

This past February while in Mumbai, I met a champion for Canadian product imports into India. Apurva Mehta, Commercial Officer, Consulate of Canada, Mumbai, India wrote this article for BC Wood members interested in exporting to India. For any questions related to this article, please contact Apurva directly at: apurva.mehta@dfait-maeci.gc.ca .

Mike Jahraus, Managing Director, China, India and Taiwan

India's furniture industry is highly fragmented, dominated by many thousands of artisan level furniture makers. The few large, organized companies cater mostly to the institutional clientele or the higher end urban buyers. Import of furniture was negligible till the mid nineties, mostly due to restrictive import rules and high custom tariffs. As part of the overall economic liberalisation process initiated by the Indian government, furniture can now be freely imported into India with the import duties and other charges currently around 60% (down from more than 200% a few years ago).

The furniture sector has seen significant structural changes in the past few years, where imports of furniture in India in the past 3 - 4 years has risen from negligible amounts to an estimated C$ 30 million per year currently. The growing market for imported furniture is also witnessed in the opening of a large number of retail stores selling imported furniture in major Indian towns in the past few years. A large majority of the imported furniture currently sold in India originates in the Far East (Malaysia, in particular) and is made mostly from medium density fibre (MDF) boards and particleboards. Some high-end furniture from Italy, Germany and the United States is being imported as well.

It is argued that in the medium term, the Indian market which prefers long lasting furniture products, will move away from MDF and particle board furniture and towards the higher priced, but more durable solid wood furniture. Currently, furniture segments that are seen to have the most potential in India include sofa sets, dining sets, bedroom furniture, wall units and kitchen cabinets. Another area of opportunity that could emerge would be to supply furniture grade lumber and furniture components to the furniture manufacturing industry in India, where some companies are expanding their scale of operations.

Apart from the economic changes mentioned above, the past decade has also witnessed significant demographic changes in India in terms of growing urbanisation (urban population increasing by about 17% during 1990 - 1999), the rise in incomes of the urban middle and affluent classes and their growing global knowledge and aspirations (two state owned TV channels in early nineties; more than 70 channels currently including many international ones).

BC Wood member companies are encouraged to develop contacts with prominent Indian furniture importers and manufacturers. The Canada Wood Showroom in Mumbai and the Canadian government offices in India in this regard can provide assistance.

Japan Recovering, Korea Booming, Australia Interesting
Eric DeGroot, Manager, Japan-Korea Program

In general, the Japanese market has been showing signs of improvement over the last few months; the Korean market is positively jumping; and Australia, traditionally a niche cedar market but holding lots of potential for other products, is bouncing back from a large drop in business last year after booming the year before that.

In Japan, the level of interest and activity is picking up as witnessed by several attendees at the Nikkei Architectural show, who maintained that the number and quality of inquiries was much better than last year's show. And at the DIY show, one member told us it was the best tradeshow they'd ever attended anywhere.

The Japanese economy grew approximately 3% in the first quarter of 2002. Most observers feel this represents an unsustainable one-off spurt brought on by the need to replenish low inventories and the sudden drop in the value of the US dollar against the yen that helped to increase Japan's exports. Severe structural problems remain, the largest of which is the vast scale of public and private debt, as witnessed by international credit agencies' continued downgrading of Japan's credit rating. Until the government finds the will to tackle the debt mountain, Japan's economy will continue to be held back. However, as many BC Wood Members continue to do profitable business in Japan can attest, the news of the nation's demise into economic oblivion is somewhat premature. The latest figures on what's hot and what's not can be found in the JETRO Building Materials Centre newsletter, and PDF copies of the Japan Lumber Journal are available on the Members Only site.

If the Japanese are on their feet but staggering, the Koreans are sprinting along. The government had to re-adjust it's estimated growth figures upwards twice in the past six months, and growth is now estimated at over 5% per annum. For the housing market this has meant strong overall demand, with government policies helping boost the imports of wood-frame house packages, and lumber and finishing materials in particular. These include improved transportation infrastructure in and around Seoul permitting more suburban land to be developed, and a stated objective of achieving a 50/50 mix of single-family homes (significant numbers being wood framed) and concrete steel apartments. Apartment units currently make up over 80% of the housing stock in Korea. As a result, starts of 2x4 singe family units rose from the 1500 level to over 2000 last year, and observers I spoke to in Seoul felt confident that 10,000 was easily achievable within three to five years, especially given the government's recent adoption of a wooden framed housing building code modeled after Canada's. Although this doesn't seem like much compared to the 50,000 to 60,000 2x4 homes built each year in Japan, Korea's growth rate in 2x4 adoption is exceptional. Several BC packaged and pre-cut housing suppliers are doing well in Korea, and as western housing takes off, manufacturers of interior finishings and fixtures including doors, moulding, windows, stairs and cabinetry are also finding that an investment in exploring the Korean market pays solid dividends.

Lastly, to Australia. I must admit to having had little knowledge of the wood (or timber as they call) and building products market down under, but a few days around the country and working a major building products show revealed a great deal of opportunity for certain BC products.

Cedar has been quite popular in Australia for generations as an interior finishing material, a window framing material (for it's anti-termite properties) and for blinds and shutters. The bulk of BC's wood exports to that market are still accounted for by rough sawn WRC being remanufactured locally for these and other applications. I found a situation there similar to Japan several years ago, where a small number of large importers control the flow of products to the end users (window companies, etc.) As a result, just like Japan, a similar level of dissatisfaction exists in some quarters with the variety and quality of wood available. The building materials manufacturers and other end users of cedar, including homebuilders, have no direct links to our secondary producers and seem very interested in establishing some.

In addition, I found some interest in high performance Canadian packaged housing; hemlock and other North American hard and soft woods as interior finishing materials for floors; walls and countertops; and Dfir for structural glue lam. Like most people, the Australians are fond of the look and feel of real wood and appreciate the fact that it's a natural material. They have significant wood resources of their own but face many of the same pressures the BC industry does from groups within society who wish to restrict access to these resources for all but recreational uses. These groups have succeeded in reducing the supply of many local species to the point where imports are being considered on an ever-increasing scale. Most of these imports originate in Australia's backyard; Indonesia, Malaysia and other SE Asian nations. However, I found that the Australians have a willingness to look at products from any country and an especially strong interest in (but lack of awareness of) North American species other than WRC and Dfir ('Oregon' in Australian).

A comprehensive report on the Australian market for value added wood products will be available in the Member's Only section soon. If you want to request a copy emailed directly to you as soon as it's ready, please contact me at eric@bcwood.com.

Reports for each show attended this year can be found in the Member's Only section.

BAU - The housing show in Europe

By Ludger Spohr, BC Wood European Representative

There are two must-attend housing tradeshows in Europe- Interbuild, which we attended in June this year in Birmingham (UK), and BAU. BAU is held in Munich in January 2003, and is THE housing show to go to in Europe (www.messe-muenchen.de).

Currently, the Canadian Consulate is preparing promotional material of Canadian products that will be at BAU. So if you are thinking about exhibiting at the show, let me know as soon as possible, to ensure your listing. This is free advertising, and will generate interest in your product before you even arrive.

So where are the opportunities, why should you come here?

The overall acceptance of wood frame houses is increasing in Europe. In 2001, the number of residential wood frame houses built in Germany only (not including the rest of Europe) was about 20, 000 units. In Western Germany there was a slight increase in wood frame houses in the first quarter of 2002, and the number of non-residential housing in wood frame is rising.

The potential in this market lies in two sectors: in smaller houses (ca. 100 - 130m²) for people 55 and older. The trend in Germany is to have elderly people stay at home instead of taking them to seniors' homes. But the infrastructure of the homes must be designed to accommodate wheelchairs and larger hospital beds.
A second sector is building and renovation products. As population figures slope downwards over the next few decades, the population becomes older (the demographic pyramid of Canada and Germany are very similar). As a result fewer new homes will be built. But there is a huge supply of older houses, mostly of masonry, which people will be renovating, improving and beautifying.

How can you bring a building product - normally an engineered product - into this market? The most important thing to know is that it needs to be certified.

Requirements to meet for certification are:

• glue used has to be allowed in Germany (list with about 100 different glues available)
• the wood species used and its technical data need to be known - datasheet and comparable grades / sorting classes to German standards
• a glue-certificate stating the right use of the glue (mixture, application etc.) is required. This certificate has to be issued from the FMPA, a German institution. Datasheets about the requirements are available. Within five years three tests of compliance will follow.
  
  After fulfilling these requirements the procedure of certification is as follows:

• make an informal / formless application for certification to the Institut für Bautechnik (institute for building technology) in Berlin (www.dibt.de).
• make an application for "permission for building purposes" (baurechtliche Zulassung) at the Otto-Graf-Institut (FMPA) of Stuttgart University (www.fmpa.de). This institute did all the certification of Parallam, Microlam and Trust Joist using the already existing datasheets from North American institutions.

You can either apply for certification in Germany only or for all of the European Union (obtaining the so called ETA - certificate = European Technical Approval).

Obtaining the German certificate takes about 8 months, for the European approval it is hard to give a time indication: Bureaucracy in Brussels is hard to predict.

But it is possible to apply for both at the same time (which is cheaper than one by one) and get the German certification while still waiting for the European one.
As German standards are known to be very strict, the product is normally accepted in neighbouring countries like Austria, the Netherlands or Italy, even with the German certificate only.

For information on the cost associated with achieving certification, or more detailed information please consult the mentioned websites or contact me directly. I hope to see many of you at the AGM or at BAU in January 2003!!

Exporting Softwood Lumber Products to the United States

On August 13 Industry Canada organized a half-day seminar on the SLA. Representatives of the US Customs Service, UPS Freight Service, and the Seattle Consulate came up to the Lower Mainland to offer details of the ruling to a good turnout of BC Wood members and other wood exporters. The floor was opened up for questions and participants were able to ask specific questions of the US representatives to determine what exactly is covered under the countervailing duty (CVD) that took effect May 22, 2002. Information was provided on specific changes as a result of the new ruling, and the logistics required for shipments. For specific questions relating to the CVD, members can contact Lorisa Hubsch of the US Customs Service (360-332-5771 ext 3114), or for more information on the seminar, members can contact Yuri Akeroyd at the BC Wood office.

Visions and Strategies for India

The Canada-India Business Council (BC Chapter), Canada's Business Link to India, is pleased to host the Hon. Herb Dhaliwal & the Hon. Rick Thorpe as guests of honor to a reception at the top of Vancouver and is inviting you to attend. This is an excellent opportunity for the BC business community to learn about federal and provincial government plans for India. It is also a follow-up to the successful Pierre Pettigrew Mission to India last April.

Hon. Herb Dhaliwal will share his vision on how Natural Resources Canada (NRCan) supports Canadian industry and will outline his exciting plans to lead a business development mission to India, November 11-16, 2002.

Hon. Rick Thorpe will share his views on opportunities for BC companies in the Indian market, and Chris Nelson, Assistant Deputy Minister, MSCE, will make remarks on BC's proposed strategic framework for priority sectors.

Please click here to register for this event.

We are pleased to welcome the following Associate Members who have joined us since the last issue of BC Wood News On-line. If you are interested in learning about the benefits of becoming a BC Wood Associate Member, please contact Yuri Akeroyd at 604-556-3373 or toll-free at 1-877-422-9663.

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Copywriter & Marketing Consultant
Phone: 604-541-4600
Fax: 604-536-1034

The RESPONSE Group
"To grow market share and increase sales, companies are now actively seeking out new ways to "manage" their relationships - with BOTH customers AND prospective customers." Chris Mapson, Principal
The RESPONSE Group helps manufacturers strategize, plan, create and implement "campaigns of contact" known as Customer Relationship Management (CRM) communications initiatives.

Successful global enterprises focus on customer value. The RESPONSE Group can help you re-think customer management strategies so you maximize ROI from sales, marketing and CRM spends. Initial, fact-finding consultations please call: (250) 546-8341.

Not signed up for the Enhanced version of the BC Wood Worldwide Inquiry System? Contact Sharon Hambly to find out the benefits of enhanced membership.

Welcome New BC Wood Members

New Additions to the Members Only Section
Mary Jelic, Market Research

The BC Wood Members Only section is growing everyday with more information for the secondary wood products industry. As a BC Wood Member, this information is available to you at any time, just click on this link to log in and you're ready to go! Here is the latest on what we have been up to and added to the Members Only section.

Tradeshow Information

In the Tradeshow Information section, under Tradeshow Tips, the following new sections have been added.

After the Show - What to do after the show in order to make your tradeshow participation successful.
How to Cut Costs - Some tips on how to save money on graphics, promotion, and literature. Keep checking back to this section as we will be adding more cost saving tips on other items and categories.

New Reports Listed in the Members Only Section

BC Wood receives and sources market intelligence reports on a regular basis. Some of these reports are not available in electronic form but in hard copy only. You can find out what the latest reports are by going to the Members Only section under Market Intelligence, Resource Centre, What's New in the Resource Centre.

The following are some of the newest reports that are now available at the BC Wood Resource Centre. Please contact Mary Jelic at 1-877-422-9663, or 604-556-3373 in Abbotsford, for more information.

Proceeding of the Second International Conference on Exploring Change in the New Asia: Opportunities for US Building Materials and Housing Exports - Cintrafor - September 1999

Opportunities for Canadian Wood Products in Selected Pacific Rim Countries: Peoples' Republic of China, India, Republic of Korea, and Taiwan - Canadian Forest Service - June 2001

Exporting Canadian Housing Products and Systems to Japan - Natural Resources Canada - 2000

How to Market Your Furniture in the US - Furniture Today - May 2001

New in the members only section: over $1,000,000 worth of inventory available housed in approximately 20,000 sq ft of space literally packed from floor to ceiling. A deal exclusive to BC Wood members has been offered on wholesale mouldings, please see the detailed spreadsheet in the members exchange for additional information.

Showcase for Canadian Exporters: a link to the Asian Market

Time: October 5, 2002 10:00am to 4:00pm
Place: SUCCESS Dr. Dorothy Lam Social Service Centre, 28th West Pender, Vancouver.
Organizer: SUCCESS-The United Chinese Community Enrichment Services Society
BC Wood: Being a corporate sponsor, BC Wood will offer 2 standard booths (8ft by7ft) to members, with a promotion offer of $350/booth (regular price $450/booth).

The show, with trade seminars, is focused on promoting Canadian-made products/services from 6 major industries such as wood products, agricultural products, food and beverages, environmental technology, information and communication, as well as government agencies and financial institutions. There will be approximately 30 companies displaying their products/services and SUCCESS anticipates over 1000 attendees. These attendees will include buyers and traders from the Asian business community in the Vancouver area, as well as delegates from both China and Asia. SUCCESS has an extensive network with experienced international trade immigrants who hold strong links with their former Asian markets. These business people are financially and logistically ready to link their Canadian experience and resources with the Asian export markets.

To help promote this event, SUCCESS will have a booth at the BC Wood AGM in September. For more information, please click here, or contact Sharifa Leung, Project Coordinator, SUCCESS at (604) 732-3278 ext 107 or at sharifa@success.bc.ca.

Secondary manufacturing creating jobs

Jobs and revenues from forest harvesting are decreasing while secondary or "value-added" manufacturing is on the upswing.

Remanufactured products, millwork, engineered wood products, cabinets, furniture, pallets, containers, panelboards, shakes and shingles are the main products in this sector.

Economic research conducted at the Pacific Forestry Centre by Dr. Bill Wilson, Dr. Brad Stennes and Dr. Sen Wang, in cooperation with Dr. Louise Wilson from UBC, has shown that secondary manufacturing is helping Canada's forest industry derive more employment and income from each tree harvested. And the market for these value-added wood products is growing.

In British Columbia, sales for 1999 were approximately $4.68 billion - about 26% of the province's total forest product sales that year. Adjusting for inflation, sector sales increased about 20% from 1997 to 1999.

National exports in a selection of secondary manufactured wood products had a value that increased about fivefold from 1990 to 1997, according to a 1998 study by BC Statistics.

What's driving this trend?

"Access to timber is decreasing. It costs more to harvest what's left, and that reduces profits," says Dr. Wilson. "In addition, substitute products are driving down demand for wood, and public pressure to reduce the harvest is growing. Plus, new technologies have given a boost to the secondary manufacturing of wood products."

With the release of this study on BC, Alberta has borrowed the methodology to complete its own study. Ontario is looking to do one this year, and Quebec, New Brunswick and the Yukon have also tapped into the Pacific Forestry Centre's expertise on the economics of secondary manufacturing.

"There are reasons to be optimistic about the future of secondary manufacturing," Dr. Wilson comments. "Although population growth and rising incomes will continue fuelling the demand for industrial timber, we still need to temper our outlook against social concerns and other influences on commercial forestry practices."

Bill Downing, CEO of BC Wood Specialties Group, an association of manufacturers of value-added wood products, agrees.

"Dr. Wilson's research confirms our observations about the growth of secondary manufacturing in BC. We see it reflected in the growth of BC Wood's membership from 125 to over 600 over the last three years. Not only does value-added manufacturing increase the tax revenue and stability for many communities in BC, the expansion of exports will increase the wealth and living standards of all British Columbians."

INFO: Dr. Bill Wilson (250) 363-0721 (bwilson@nrcan.gc.ca)