First
Global Buyers Mission Surpasses All Expectations
Brian Menzies, President - Direct Public
Strategies
Delegates
attending the first ever BC Wood Global Buyers Mission held
in Penticton left confident they had made real business connections
with international buyers according to conference survey.
The
Global Buyers Mission, held September 16th to 18th at the
Penticton Trade and Convention Centre, sold out, attracting
over 220 participants including 70 pre-qualified buyers from
China, Japan, Korea, Germany, Switzerland, Austria, UK, Denmark,
France, Spain and the United States. International buyers
had an opportunity to view product displays, hold individual
business meetings with Canadian manufacturers, and tour production
facilities around British Columbia.
 Speaking
at the conference was British Columbia's Minister of Forests,
the Honourable Michael de Jong. "We have the best forest
products, the best sustainable practices and the best place
in the world to do business," says de Jong who assisted
with the selling theme of the Global Buyers Mission. Also
speaking at the conferences was the Mayor of Penticton, David
Perry, who espoused the importance of utilizing value-added
wood products for construction materials as planned in the
proposed South Okanagan Entertainment and Cultural Centre.
 BC
Wood conducted a conference exit survey of participants to
gauge the success of this first Global Buyers Mission. "I
have made actual sales of a half a million dollars,"
one delegate wrote. "I have forged a new relationship
with an international buyer that will help to sustain our
company for years to come," another delegate stated.
These comments and real business transactions demonstrate
that this first Global Buyers Mission was a success.
"BC
Wood's Global Buyers Mission has been a tremendous success
that has outstripped all our expectations," says Bill
Downing, BC Wood CEO. "I truly want to thank our partners
for all their efforts and support to make this a wonderful
success." The 2004 Global Buyers' Mission was supported
with funds and assistance from BC Wood members and its government
partners, including Western Economic Diversification Canada,
Canada Mortgage and Housing Corporation, Ministry of Natural
Resources' Canada Wood Export Program, British Columbia's
Forestry Innovation Investment Ltd, Export Development Canada,
the Canadian Consulate in Seattle and the Community Futures
Development Corporation Penticton office.
 "Members
should start marking their calendars for next year's Global
Buyers Mission," says Downing. "We want to build
on this year's success and create more international trade
opportunities for our members at next year's Global Buyers
Mission," stated Downing.
The
2005 Global Buyers Mission is targeted for Whistler, September
15 to 17, 2005. Contact our office for more information at
604-883-7100, or toll free outside the lower mainland at 1-877-422-9663.
China's
Resort Sector - An Opportunity for BC Wood Members?
Michael Jahraus, Managing Director - Asia
BC
Wood recently commissioned a study on the opportunity for
Canadian-style log and timber-frame structures and associated
wood products in China. The report, carried out by Shanghai
Palm Sunday consultants based in Shanghai, is now available
to BC Wood members.
The
major findings of the study indicate favourable opportunities
in this market niche:
- China
Resort projects (golf courses, ski resorts, marinas, hot
springs and holiday resorts) and ecological/nature parks
provide a rapidly growing market opportunity for Canadian
wood structures and wood products.
- The
site planners and designers are often foreign companies,
serving a domestic and international clientele, and they
are demanding international standards in product quality.
- There
are now 177 national parks in China, with 58 just having
been added in 2003. A boom in resort development is forecast
for China. Currently in 5th place, China is expected to
become the #1 tourist destination in the world by 2020 (Source:
World Tourist Organization, 2004). The scale and number
of new project opportunities is immense by any standard.
Although
hundreds of wood frame structures and a few Canadian-style
log homes have already been built in resorts in China, the
report researchers found only 3 log and timber frame companies
in China of any scale that have been involved in this business.
Many of the locally constructed resort wood structures in
China were found to be old and in poor repair, indicating
a lack of expertise in this area. However, the Canadian (such
as Jinshitan above) and European projects, were generally
found to be in very good condition and the owners outlined
they were pleased with the construction and durability of
the projects.
Chinese
resort developers are usually large companies, typically open
to new ideas and new products, especially products that are
environmentally friendly and meet strict international quality
standards. The opportunity for imported building materials,
offering high quality and innovative design, is much higher
in this sector than in typical Chinese construction, where
low price, prompt delivery and advantageous payment terms
are often the driving factors. It is important to note that
Canadian architects have been very successful in China and
are known for their creativity and innovative design. CMHC
has recently published a brochure "Celebrating Canadian
Design in China" which highlights the many commercial
projects utilizing Canadian design.
BC
Wood will be putting together a promotional package to explore
this opportunity and we are looking for BC Wood member companies
that wish to participate.
If
you are interested in getting involved in this project, please
contact me for further information at 604 882-7100 or email
me at mjahraus@bcwood.com.
Japan
Market Update October 2004
Jim
Ivanoff, Program Manager - Japan
Elysion
Kowa Project Seminar
In the June issue of this newsletter I reported on an exciting
Tokyo rental apartment project that used a great deal of finishing
materials from a number of BC Wood members. After discussing
it further with Matt Fraser of the Canadian Embassy and BC
Wood's Canada Wood partners in Japan, we decided to hold a
Canada Wood seminar focused on this project. We decided to
use the project as a case study to promote Canadian building
products to developers, builders, and architects.
 There
were several reasons why we decided to create a seminar around
this project. The most obvious was that it was a beautiful
showcase of various Canadian building products. Another reason
was that the products included, truly represented Canada Wood
with products made from Quebec maple by BC Wood manufacturers.
Other non-wood materials such as brick siding and roofing
materials completed the Canadian building products showcase.
However, the biggest reason that we zeroed in on this project
was that it was a "great story" in that the developer
chose the Canadian products because it made good business
sense.
As
we wanted to keep costs to a minimum we only sent out 400
invitations. However, over 70 people responded that they wanted
to attend and we then had to start turning people away. This
is a phenomenal response rate of almost 20%. For most seminars
the average is 1-3%. Needless to say we were thrilled with
the response.
 The
seminar on September 2nd included several speakers but the
highlight of the afternoon was the developer's presentation.
He explained that he chose Canadian products because they
allowed him to build something that was a rank or two above
what other larger developers were doing without spending more.
Looking to the future, he said that these high quality apartments
would maintain high occupancy rates and rental values and
thus increasing profits over the life of the building for
him and the building owner. The fact that he cannot speak
English at all, yet found it easy to import from Canada with
the help of Ken Building Materials, also resonated well with
the audience. Many industry people here are very concerned
about language barriers.
The
basic message itself may not be new, but it was well received
by all of the industry and media people in attendance because
the messenger was a profit seeking Japanese company. In previous
Canada Wood/ Embassy seminars, we would present such arguments,
but they would be simply taken as a sales pitch. In this seminar
we allowed the Japanese developer and the architect to tell
their stories. Rather than getting a sales pitch, the audience
received an actual testimonial and that won them over. The
high number of BC Wood member brochures that were requested
after the seminar as well as the enthusiastic response of
the industry press showed this. There have already been at
least four articles written about the seminar and project
and we are still expecting more.
In
cooperation with the Embassy and our Canada Wood partners
I hope to hold more seminars like this in the future. I believe
this approach which revolves around getting Japanese industry
people who are using our products to speak on our behalf creates
a "low cost, high impact, and highly credible" platform
for seminars. Moreover, by having actual projects to tour
as a part of the seminar not only increases interest, but
also adds to the impact as "seeing is believing."
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BC
Wood to pilot sector-based structure
Bill Downing, CEO
In the September meeting of BC Wood's board of directors,
the board approved a pilot product to explore the idea of
BC Wood restructuring by sector. The organization is currently
structured by target market (e.g., United States, European
Union, China, Japan and Korea), since this is the mechanism
by which both provincial and federal partners allocate funding.
However, this structure makes little sense for the sectors
that BC Wood represents (e.g., Pre-built Structures, Furniture,
Remanufactured Products, Millwork, Engineered Building Products,
and Cabinets). A sector-based approach, where each sector
determines its marketing priorities, may be more attractive
to BC Wood members.
BC
Wood will pilot the concept with the Log Home and Timber Frame
sector - there are over 50 log home and timber frame members,
making it one of the largest sectors in the organization.
We are proposing to pool all the dues paid by the members
of the sector. Approximately one third of the dues will go
toward covering BC Wood's fixed costs. The remaining two thirds
will be leveraged by BC Wood (between 2.5 to 5 times) through
government funding programs. To determine how the money will
be spent, Log Home and Timber Frame will establish an advisory
committee that will rank priorities; BC Wood will then implement
the program. There are two major benefits of this model:
- Members
will see their dues leveraged several times over; and
- Members,
through the advisory committee, will determine the marketing
priorities for their sector.
To
assist us in the pilot, BC Wood met with BC Log and Timber
Building Industry (LTBI). Based on our discussion, the LTBI
was supportive of this new business model and agreed to help
BC Wood seek input from the log home and timber frame sector.
A joint meeting of LTBI and BC Wood members is scheduled for
mid-October in Kamloops. Please stay tuned for the results
of this pilot, as it may be a sign of things to come.
Market
Opportunities and Channels of Distribution for Hybrid Timber
Frame Housing in the United States
Jennifer Rose, Program Manager - Western United
States
BC
Wood has recently commissioned a market research report which
will act as a 'how to' guide on the branding, marketing and
selling of hybrid timber frame (HTF) homes into the US. Preliminary
research shows that the HTF concept is an untapped niche market
whose time has come. The report is a tool for BC manufacturers
of timber frame homes to use to ensure that they are considered
the leaders in the manufacture of HTF homes. By using many
of our competitive advantages, such as access to the best
fibre and the most skilled craftsmen in the world, BC could
dominate this emerging market.
Below
are some of the highlights of the upcoming report, to review
the report in its entirety and to participate in the upcoming
marketing activities in this project, please contact Bill
Downing at bdowning@bcwood.com,
or (604) 882-7100.
What
is a hybrid timber frame (HTF) home?
The HTF home is different from traditional timber frame homes
in that their main living areas (kitchen, dining room, living
room, a.k.a great room) are constructed of timber frame while
the rest of the building (bedrooms, bathrooms, den, garage,
etc) is constructed using platform frame construction techniques.
The HTF home market and industry is new with limited academic
or business literature available. However, several Canadian
and US timber frame manufacturing companies are currently
marketing HTF homes.
Who
is the key group to market to?
Developers and land builders are best suited to HTF homes
for a number of reasons. They provide the largest number of
new single family homes in the US, constructing between 500,000
and 650,000 units per year. This group also markets the broadest
range of homes including most of the larger, upscale homes
priced US$250,000+.
Large building developers are increasingly modernized and
have well trained staff that covers all aspects of the construction
process.
In
addition, the home buying trends point towards developers'
increased market share of custom built homes, they can introduce
the HTF home concept on a regional or national basis based
on superior market knowledge, and they have the marketing
power to push HTF home sales through brand name and reputation.
What
geographic markets in the US offer the best potential for
sales of HTF's?
Due to a number of compelling reasons, the initial key market
areas for the HTF homes are California, Nevada, Colorado,
Texas and Arizona. Few timber frame manufacturers exist to
service these areas due to a restricted fibre supply, the
populations are showing great growth and experiencing 10%
or greater annual increases in housing starts from 2000. By
all accounts, home ownership is expected to steadily increase
over the next ten years. In 2003 alone, the US single family
residential housing market totaled a record 1.39 million units
valued at over US$300 billion. 46% of the new starts were
located in the Southern US, with the West claiming 26% of
the total starts.
How
do we create demand within these two groups?
To create awareness of the HTF's with land and building developers
in the Southern and Western US, both promotion and education
of the HTF's will be required. Currently there is an assumption
that timber frame homes are expensive and there is a limitation
in design possibilities.
Developers
focus more on marketing and less on construction to increase
their market share. A strong business case must be presented
that shows HTF homes solves design problems, saves on construction
time and increases revenue with supporting consumer research
material before developers experiment with this product. They
readily utilize remote manufacturing to lower unit costs through
better labour productivity, improved scheduling, bulk purchasing
and lower waste disposal.
It
is necessary to begin building a network of developers, builders,
architects and engineers to create a 'word of mouth' buzz
in the US. This will probably begin with a branding strategy
specifically around the BC manufactured HTF house. To build
on the word of mouth buzz and branding strategy, follow up
activities will include attending tradeshows, holding seminars
and organizing a media campaign through the major timber frame
publications.
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