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A display of different types of wood inside the Vancouver Pavilion at Shanghai Expo 2010, which educated more than 600,000 Chinese citizens, developers and urban planners about the benefits of building with wood. (B.C. government)
A display of different types of wood inside the Vancouver Pavilion at Shanghai Expo 2010, which educated more than 600,000 Chinese citizens, developers and urban planners about the benefits of building with wood. (B.C. government)

B.C. wood-culture push brings Chinese success Add to ...

British Columbia's foresters have made a long-awaited breakthrough in China by convincing the country of the merits of wood.

The effort has sent the value of B.C. lumber exports surging beyond expectations.

China is a bright spot in what remains a troubled industry. B.C. lumber sales to mainland China doubled in 2010 to $668-million, exceeding Japan for the first time. But Japan is still an extremely weak market while the United States - the traditional No. 1 market for B.C. wood - is mired in a housing recession.

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The new foothold in China is the longer-term salve for British Columbia, which faces a seemingly permanently reduced market in Japan and an extended, and slow, recovery in the United States.

British Columbia, in a joint effort by industry and government, has scored success in China in wooden roof trusses for concrete apartment buildings, as well as early signs of momentum for small wood-framed apartment buildings.

The country primarily builds with concrete and steel and had previously only imported cheap low-grade wood for concrete construction and manufacturing. Such uses, including furniture manufacturing, are still big.

Canada has worked to inculcate wood in China's culture, from the education of carpenters to negotiating with government to change building codes. It is paying off.

Exports to China from B.C. almost tripled to $104-million in December and value per cubic metre jumped 30 per cent, according to new figures from BC Stats. The record month capped a record year with an unexpected burst: The December results alone surpass the value of lumber sold to mainland China in all of 2007.

"There's no question it's taking hold," said Duncan Davies, chief executive officer of International Forest Products Ltd. in Vancouver.

Over all, however, the industry's numbers aren't strong. With sales to Japan and the United States weak, total exports of $3.56-billion last year marked the second-poorest in records dating back two decades, despite an increase of almost one-third from 2009.

Exports are stuck at less than half of the levels of the best years in the mid-1990s, when the United States and Japan each bought billions of dollars of lumber.

Still, for Jim Shepard at Canfor Corp., which has staked much of its future on China, British Columbia is witnessing a "new world of lumber."

When Canfor started marketing to China in the early 2000s, volume sold was "enough to make a couple cigar boxes."

"And we're just now breaking into wood-frame construction," Mr. Shepard. "We used to have a finite market: America. It's going to be a whole new dynamic."

Demand from China has supported lumber prices, which have risen even though housing starts in the U.S. remain extremely weak and are forecast to stay low for several years. Higher prices, and the sale of higher-quality wood, has helped.

China's rise has been swift. A year ago, lumber exports to the country represented 30 per cent of what was sold to the United States. In December, 2010, BC Stats' figures show China was at 80 per cent of what went to the U.S.

Though B.C. forestry has seen many casualties in the past decade, the survivors are expanding. Companies such as Canfor have reopened mills solely to supply China and the growing market underpins the company's decision to invest $300-million in its sawmills in the next three years.

And Mr. Shepard, who is retiring in May, is being replaced as by Don Kayne, currently Canfor vice-president of wood marketing and sales, and the person in the B.C. industry who has dedicated the most effort to building the market in China.

Consultant Russ Taylor, president of International Wood Markets Group Inc., predicts that Canada, led mostly by British Columbia, will overtake Russia as the No. 1 supplier of lumber to China this year.

He warned that even though China is buying more lumber, a part of the reason is a decline in the supply of raw logs from Russia. Higher-value lumber isn't necessarily being used for residential construction and is still going to simpler applications, Mr. Taylor noted.

B.C.'s effort to promote wooden roof trusses and the early experiments in apartment buildings has gained traction, Mr. Taylor said.

"There's lots of momentum. There's a lot of builders playing around with wood. But China's a long way away from building wood-frame houses."

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HOT COMMODITY

$104-million

Value of B.C. lumber exports to mainland China in December, 2010 (up from $39-million a year earlier).

$160

Value, per cubic metre, of lumber exports to mainland China in December ($123 a year earlier).

$128-million

Value of lumber exports to U.S. in December ($121-million a year earlier).

$142

Value, per cubic metre, of lumber exports to U.S. in December ($130 a year earlier).

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