If you are wondering what happened to all the equipment at BC Wood’s Value Added Development Centre, I have some good news. It has found a home in a new training and education program to be offered by BCIT.

As you are probably aware, BC Wood’s “Skills Training Program” came to an end on March 31st with the demise of Forest Renewal BC. We were faced with an important decision regarding the equipment at the centre: we could either sell it or try and place it where it could continue to be used for training for the secondary wood products industry. Since the revenue from any sale would simply go to the government (who owned the assets), we had a strong incentive to place the equipment, and the curriculum, at institutions that would continue offering the courses developed by BC Wood.

The BC Wood Directors were adamant that the equipment be located regionally, as the majority of the demand came from outside the lower mainland. The government staff winding down Forest Renewal was very supportive of this approach.

BC Wood submitted a proposal to place machines around the province at individual institutions. Although this would have met the regional placement requirement, it was felt that this model was not ideal in terms of a sustainable training program, especially in terms of fluctuating regional demand. Instead, a proposal by BCIT was accepted to manage a complete program and move equipment where demand warrants. After subsequent discussions, BCIT agreed to:

• not sell the equipment for the duration of this agreement (5 years), unless for the purpose of upgrading to a more modern and/or more appropriate machine used in the secondary wood manufacturing industry.
• place the equipment in regional colleges, schools or other training locations where industry around the province has reasonable access to training programs, and can be put to best use.
• develop a reasonable business plan to support the ongoing use and upkeep of the equipment.
• put in place a framework for BC Wood to provide ongoing advice, guidance and assessment of training activities and plans related to the equipment and machinery.

BC Wood’s Skills Training Program was an excellent initiative that assisted a great many secondary wood product manufacturers throughout the province. I have confidence that BCIT’s involvement, as a provincial organization, will ensure that our members will continue to have access to the skills training required to move our industry forward. BC Wood, through its membership, will continue to offer guidance to BCIT as we focus on our strength – assisting members to become Export Ready and compete in global markets.

BC Wood has introduced a new “Export Ready” rating for our members. Due to the increasing demand for our In-Market Programs, BC Wood will require that every member company participating in our Tradeshows and Trade Missions be “Export Ready”.

“Export Ready” refers to a company's level of preparedness to do business in an export market; i.e., the company has a marketable product, as well as the capacity, resources and management commitment to compete in an export market.

For those members who are interested in exporting their products or entering new markets, BC Wood has developed the Market Expansion Program (MEP). The MEP assists members to become “Export Ready”.

The MEP combines BC Wood’s 13 years of value-added experience with the experience and know-how of industry experts. The result is a “step-by-step” program to get you exporting your products to the United States, Japan, Korea, Europe, China and India.

For detailed information, please read the MEP brochure. Then, fill out the form on the back page and fax it to 604-556-3385. Our staff will have you on your way to becoming "Export Ready" in no time at all. If you have any questions, please contact our Program Coordinator, Sharon Hambly, or Henk Gauw, Manager, Market Expansion Program.

Keeping up with all of the new additions to the BC Wood Members Only section on www.bcwood.com, requires constant visits to the site. Members visiting the site for the first time are always amazed at the vast amount of information that is available. By reading this newsletter every month, and by visiting the Members Only section often, you will keep up to date with the latest additions. To keep current, you can also visit the “What’s New This Week” section. Announcements and listings of the latest additions will be documented in this area, with previous messages placed in the “What’s New Archive” section.

Since the last release of BC Wood News On-line we have made many additions to the site:

• Country specific information on the US and Korean markets. This includes how BC Wood is involved in the market, background and facts, articles by BC Wood in-market representatives, contacts, links and market intelligence reports.

• Links to websites that help our Members conduct business. Information and links are available for the following categories: financing, industry contacts, industry trends, international trade, regulatory and taxation, statistics, and suppliers.

• Tradeshow terms - a listing of common terms you will hear or come across as you plan and attend tradeshows. It is a good idea to familiarize yourself with these terms as you will see some of them often during your preparations.
• Tradeshow websites - lists websites that offer information and tips on exhibiting and attending tradeshows.
• Shipping tips - includes cost saving tips as you prepare to ship your booth and goods to trade shows.
• Tradeshow survival kit - a listing of items that you should take with you on each tradeshow. Be sure to prepare these items ahead of time so that you don’t forget anything.
• Pre-show planning - provides an outline of what items you should think about and plan for before you leave for the tradeshow.

So, keep checking back often, and we will keep adding more information for you on the secondary wood products industry. If you have any comments or suggestions for the Members Only site, please contact Mary Jelic.

BC Wood is organizing and sponsoring a mission to southern China, from August 17 to 25, 2002, to coincide with the 8th International Furniture Exhibition Fair in Dongguan, China. This trip will be an incredible opportunity for BC Wood members to see and learn firsthand about the prospects and competition for lumber and components in China!

Along with visiting a major trade show, where Chinese furniture and interior decoration manufacturers will be displaying their products, a full schedule of visits to wood product manufacturers will be arranged.

Why Guangdong Province?
In 2001, approximately 50% of lumber imports into China went through Shanghai and Guangdong. Guangdong is now recognized as a key and growing market for wood and wood products. Imported lumber is used primarily to produce interior decoration products, such as solid wood doors and floors, paneling, moulding, saunas, and solid wood furniture. Consequently, Guangdong province is home to thousands of manufacturers, and now represents over 50% of furniture exports from China.

What is driving the opportunity to export lumber and components to China?
The growing demand for wood imports is fueled by a number of factors. First, supply continues to be negatively impacted by the enforcement of harvesting bans of natural forests in China (log production is down by 25% since 1995). In addition, domestic demand continues to increase due to large-scale infrastructure development throughout China and increases in real incomes. With China’s GDP growing at 7%/year, China continues to be the best performing large economy in the world.

Where will the mission participants travel?
The flight from Vancouver will arrive in Hong Kong on August 18th. After arriving in Shenzhen by train, the mission will travel by vehicle to Dongguan (to visit the trade show), to manufacturers in or around Guangzhou, Shunde, Zhongshan, Zhuhai, Humen, and will then return to Shenzhen. Participants will return to Hong Kong for a flight to Vancouver on August 25th.

Who should go on this trade mission?
Export ready remanufacturers and specialty sawmillers that can supply either coastal and/or interior lumber and/or components. BC Wood is looking for a good mix of suppliers in terms of species (softwood and hardwoods), sizes and grades (clear and tightknot) to participate in this mission. The trip will be limited to companies that have a proven capability to supply lumber and/or components to the Chinese market. Participants will be accompanied by Robin Lu (of our Shanghai office) and myself. Please note that BC Wood plans to follow up this mission with a second mission to the same area in March 2003; thereby allowing participants that initiate trial orders to return to the area and confirm long-term business.

Estimated Cost?
Total cost (economy airfare, land transportation, hotels and meals) to participants, after BC Wood cost-share, is estimated at approximately $2500.

How do I sign up?
Space is limited and participation confirmation is based on BC Wood acquiring a mix of participants. If you are interested in this mission and wish to confirm your spot, please contact Mike Jahraus via e-mail at mjahraus@bcwood.com at your earliest convenience.

After three weeks in British Columbia meeting BC Wood Members, the month of May was very busy for tradeshows in Europe. I attended SASMIL in Milano, Italy; Carrefour International du bois in Nantes, France; and Interbuild in Birmingham, UK.

The shows were each as diverse as the Italian, French and UK markets. At all of the shows, I met people with a high interest in BC Wood products, but with very specific interests. The first show, SASMIL, is said to be a mixture of LIGNA and Interzum; a show for both furniture manufacturers and the machine/tool industry. With three large exhibition halls, a good portion of the 85,000 international visitors visited the suppliers area.

In Italy, the interest for BC products was on garden furniture, with inquiries for building components, plywood, veneers (Hemlock), and specialties like Yellow Cedar. Italy is a strong hardwood market, but BC manufacturers have a strong advantage in this market because of the fibre available. Inquiries touched on Hemlock, Douglas Fir, Alder and Western Red Cedar, and the majority of the inquiries were for secondary products.

And while Italy is not as big a Douglas Fir market as it used to be, France meanwhile surprised me - it is definitely a Western Red Cedar market. Visitors showed interest in Western Red Cedar fencing, decking, panelling and gazebos for gardens and hot tubs. Demands for CLS and a raw product to manufacture broomsticks were some other interesting inquiries. The Carrefour International du bois in France is a relatively small show, with only three exhibition halls and 9,000 visitors in three days; however, it is the most important show in the wood business for French speaking Europe, including parts of Switzerland and Belgium.

The last and most successful show was the Birmingham based Interbuild show. The visitors here were not only dealers and importers, but builders and architects. Architects were interested in sourcing different species of wood, wooden frame houses, garden furniture and staircases. Even if many of them did not have a particular project in mind, they were interested in gathering as much information as possible. When it comes to their next designs, there is an increased chance a Canadian product will come to mind.

For many Canadian companies, the new building code in the UK requiring higher energy efficiency was a door opener. The CMHC booth at the show demonstrated many ways to build in timber frame, giving detailed information about Canadian technology and giving a competitive edge into the UK market.

So after these last weeks and shows it remains to say: It’s spring in Europe. Not yet the time to harvest, but the time to see things grow.

After research and careful planning, the husband and wife team of Nicolas and Jess Meyer are on the right track. A member of BC Wood since 1996, their company initially produced rustic furniture out of Douglas Fir. They have since completely changed over to high-end contemporary case goods, came up with a new name, Nico Spacecraft, and business has been taking off ever since. Nicolas and Jess’s goal is to deliver a product that is a step beyond the mere purpose of furniture; it’s furniture as art.

When Nico Spacecraft first became a BC Wood Member, they were unaware of what was available, and as a result did not take full advantage of the program offerings. They soon discovered that BC Wood was an integral factor in the growth of their business. Being a member gave Nico Spacecraft the opportunity to research their market through market intelligence and attending tradeshows. Nico Spacecraft recently returned from the International Contemporary Furniture Fair (ICFF) in New York, which was actually a two-year process in the making.

In preparation for exhibiting at the ICFF, Nico planned ahead. Last year they walked the show and attended with BC Wood as a mission participant. “I can’t emphasize enough how much this helped us” commented Nicolas Meyer. “Attending with BC Wood as a mission participant helped us to learn about the market, find our spot in the market, and get ready for the show next year.” Preparing themselves for exhibiting at the show included learning about presentation, price points, and quality of the products that were displayed.

Overwhelmed with the information that they accumulated at the mission from various exhibitors, industry professionals, and even their competition, Nico now had to evaluate and decide on a strategy for next year's show. They definitely wanted to attend the ICFF as an exhibitor. With this goal in mind, they had to figure out what pieces to turn into a collection, starting with design and then production, and then fine-tune them. With a year to plan for the show, it seemed at first that time was on their side. As the show drew nearer though, things started to get busier with photo shoots, samples, and product testing.

With all their preparation and some help from BC Wood, Nicolas and Jess felt secure, nervous, and excited all at the same time going into the ICFF show this year. “We felt like we had really done our homework”, said Nicolas Meyer. At the show, they learned that the first three days are the most important and involve talking with a lot of people from the industry. The response to their product was very positive; people liked the design and modular nature of their product. They even received press coverage at the show from Metropolis magazine. David B. Sokol, a writer for Metropolis wrote, “Thusis’ warm woods and cool aluminum legs provide contrast, while the slender aluminum drawer pulls appear to button-up the visual texture of the parquet.”

Presence is very important at the ICFF show. First time exhibitors do not usually receive many orders, as most of the buyers wait to see if the exhibitor has staying power, and if they will be back to next year's show. Most exhibitors do not receive orders until they’ve been at the show three years running, once they have established a presence. For Nico Spacecraft, the show proved to be more than what they expected. They will most definitely attend next year.

For more information on the International Contemporary Furniture Fair, you can visit their website at http://www.icff.com or contact BC Wood.

With the recent changes at BC Wood, including the retirement of Bob Holm, the Japan office has been tasked with overseeing BC Wood’s promotion efforts for Korea and Australia. The ‘Japan-Korea Progam’, as it’s now officially called, had a busy spring with six shows in three countries between February and June:

• The Kyung Hyang Housing Fair, Seoul Korea
• The Nikkei Architecture and Construction Materials Show, Tokyo Japan
• The West Japan Total Living Show, Kitakyushu Japan
• Homdex Korea, Seoul Korea
• The Japan DIY Show, Osaka Japan
• Designbuild Australia, Melbourne Australia

Reports for each show can be found in the Member’s Only section under Tradeshow Updates.

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 who 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 Member’s 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 frame) and concrete steel apartments. Apartment units currently make up over 80% of the housing stock in Korea. As a result, starts of 2x4 single 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 wood frame 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 it) 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 its 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 the 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 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 secondary 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.

The first release of BC Wood News On-line was a success. Many positive comments were received, both on the new format of the newsletter and the information it contains.

You can look forward to the following monthly features in BC Wood News On-line: a message from the CEO, New Member and Associate Member Welcome, Member Spotlight, Upcoming Tradeshows, and WWIS, International Offices, Members Only and AGM Updates. If you would like to print BC Wood News On-line, please select the printable version from the Media/News page.

Thank you to all of our members and readers. If you have any comments or suggestions about the newsletter, please send them to Mary Jelic.

This years BC Wood AGM is fast becoming an informative and exciting event to attend! Great speakers, hot topics, excellent networking opportunities and fun social activities are just a few of the reasons you should participate this year.

Here is an update on one of our panel presentations:

ACCESS to Funding
We are pleased to announce confirmation of the following representatives:

PEMD - Harvey Rebalkin from Industry Canada will share information on how you can access funds to support your export marketing and tradeshow programs

WD - Kandice Johnson will explain programs offered by Western Economic Diversification, specifically the ITPP employment plan and marketing staff funding assistance

IRAP- Don Giles will discuss how small to medium-sized firms can access funds from the Industrial Research Assistance Program

SR & ED - Wilson Lau will review the tax incentives available to manufacturers that conduct Scientific Research and Experimental Development

Dynamic - Dynamic Windows and Doors will give an overview on how participation in these various programs has significantly contributed to bottom-line profits!

Our list of confirmed speakers and presenters for our one-day program continues to grow – check the AGM website regularly for updates!

You can still get in on the Early-Bird Registration by completing this form and submitting it by July 31st.

Welcome New BC Wood Members

We are pleased to welcome the following new BC Wood Members who have joined us since April, 2002:

Country Roots, Burnaby – Furniture & Fixtures

Adwood Manufacturing, Crofton – Furniture & Fixtures

Trans-Pac Housing Inc., Burnaby – Factory Built & Pre-fabricated Housing

Norse Log Homes Ltd., Lantzville - Factory Built & Pre-fabricated Housing

Canadian Fine Products Mfg. (2000) Corp., Vancouver - Factory Built & Pre-fabricated Housing

Nortech Fibre Products, Telkwa – Remanufactured Products (semi-finished)

Squilax Timber & Supply Ltd., Chase - Remanufactured Products (semi-finished)

World of Wood, Tappen – Millwork & Finished Products

Distribution into China - via a Showroom in Shanghai
Mike Jahraus, Managing Director – China, India, Taiwan

On May 13, 2002 Tony Lu, who is associated with the Huili Group of Companies, Shanghai, gave a presentation to BC Wood Members. The concept proposed, which has now been adopted by the Quebec Wood Export Bureau (QWEB) and the Quebec Provincial Government, is as follows:

• A showroom, comprised of Canadian companies, will officially be opened at the Shanghai Mart in Shanghai;
• Companies will utilize this showroom (and provide displays) to promote their products and find distributors in China;
• The showroom will be staffed by Huili salespeople, who will be trained in the companies' products and will promote their products through a variety of means;
• Huili sales people will train distributors and provide after sales support;
• Huili will use their extensive sales and distribution network to promote the showroom to give it credibility; and
• The showroom will be especially effective for small to medium sized companies that do not have the resources to establish their own representative office in China.

BC Wood has been a partner with QWEB in developing the China market and now BC Wood members have the opportunity to join QWEB in this initiative. This initiative could be supported by the provincial and federal governments, but requires a minimum level of commitment from BC Wood members before BC Wood can move forward. In Quebec, over a dozen companies have committed to the concept.

For a detailed account of the Huili Group opportunity, please see the full May 13 presentation notes and background report on the Shanghai Showroom Concept, in the Members Only section under International Markets - China.

Detailed financials outlining participation costs are being developed and will be available shortly. If you are seriously interested in this initiative, and would like a copy of the financials, please contact me at mjahraus@bcwood.com.

New Associate Members

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.

Have you ever attended a trade show with the uneasy feeling that you‘re gambling on the results? You’re not alone. For most companies finding time to promote business the way they want to can be overwhelming. If you need answers that take the gamble out of trade show marketing, Exhibitree can show you ways we’ve helped other companies find cost-effective solutions that deliver results.
Mark Bourgeau (604) 940-8110.

Ackino Enterprises
Ackino Enterprises offers consulting services to the primary and value added sectors, with an emphasis on small and medium sized companies. Services available include comprehensive assessment and analysis of processing operations - solutions and implementation, market development & strategies, performance management, development of quality control programs and fibre strategies. The principal has 35+ years experience in the industry.
Bruno Geiger (250) 832-9189

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.

CMHC Roundtable/
Matchmaking Session with Developers from China

CMHC International is holding a roundtable/matchmaking session and one to one meetings with developers from China. This session will be an opportunity to discuss the interests and challenges currently existing in the Chinese housing industry. To register for this event, please contact Edmund Shum at CMHC International at (604) 737-4072 or eshum@cmhc-schl.gc.ca.

Announcement
Mike Jahraus, Managing Director – China, India, Taiwan

I am pleased to announce the appointment of Simone (Qianwen) Liang as Marketing Coordinator for the BC Wood China, India and Taiwan program. Simone brings strong business skills, real-life experience at introducing companies into the Chinese market, and excellent language skills in Chinese, English and French.

Simone grew up in Shenzhen, Southern China and arrived in Canada seven years ago. Before she came to Canada she worked in the securities industry and acquired knowledge in the import/export business, including L/C’s, bills of lading and commercial invoices. Simone earned her Bachelor of Commerce degree from McGill, with a major in marketing and has just successfully completed the 15 month intensive MBA from UBC. She also worked for an engineered quartz manufacturer in Quebec and was successful in introducing this company to the Chinese market.

One of Simone’s strengths is her unique ability to understand both the Chinese and Canadian cultures. She is very excited and enthusiastic at the prospect of bringing BC Wood Member companies success into the Chinese market. Please join me in welcoming Simone Liang to BC Wood.

Got a Question?

Just released on the BC Wood website is a listing of frequently asked questions. To date this area contains questions and answers on the following topics:

• General Information
• Associate Members
• Worldwide Inquiry System

We hope that you find this section useful and informative.