Mission Objectives and Results:

1) Work with BCWood at the Housing Brand 2015 Fair-deploy market materials in Korea Completed Show. Rolled out new Korean AFPA card company profiles, and grading supplement to Alberta Buyers Guide. There were 180 visitors to the booth over the 4 days.
2) Continue market investigations in Seoul and Busan. Seven site visits carried out in the Seoul and Busan area. See Mission Notes below.
3) Meet with Canada Wood and discuss program for next year. Potential grant funding losses from Alberta severely impact future planning for Korea Wood.
4) Meet with Alberta Trade Office and Embassy Trade Office staff in Seoul. Completed. Discussions on possible event to open the Gapyeong Daljeon Demonstration project. Canada Trade office working with European Union and the United States in response to new wood product regarding requirements in Korea.

Recommendations:
1) Subject to funding, plan to attend Housing Brand show next September and the Architecture Fair in the fall if it can be tied into Japan activities.
2) Continue developing wood buyer contacts in key ports in Korea.
3) Assist ESRD with Gapyeong Daljeon Demonstration if required.
4) Work with FPInnovations on an industry mission to Korea and Japan subject to funding availability and interest.

The BCWood Canada Wood pavilion consisted of 7 exhibitors including BCWood and AFPA. There were several hundred visitors to the Pavilion of which about 180 left their cards at the BCWood /AFPA portion of the pavilion.

Canadian Pavilion and AFPA Booth

January 26

JinSung Ind Co., Ltd Wood home building materials importer and distributor www.jslogis.com

Jing Sung Ind business is about 10 years old. The Hong family been in building materials trade for 50 years. Produces a wide variety of materials for shipping, especially pallets. The pallets are high quality and designed to be re-used for long periods of time. Interested in sourcing more 2 and better SPF for pallets as well as plywood and MDF. Buying from Alberta might be too expensive for this company

Other business line is a joint venture partnership with large European Company Megawood which produces outdoor building materials, outdoor furniture and decking.

KWBA (Korea Wood Building Association) & Land Lovers Korea Co., Ltd          www.wooddesign.or.kr                     www.landlovers.co.kr

Honorary Chair Prof. Kim, Jin Hee KWBA and Kim, Sang Byung CEO Landlovers The KWBA is the major prof essional and industrial society of wood design and architecture in the KOREA. This is the third time we have meet with KWBA.

President: Kim, Kwang JungHonorary Chair Prof. Kim, Jin Hee

KWBA (Korea Wood Building Association)The Korea Wood Building Association develops and educates wood building design and skills in Korea. They target the architecture and construction industries. The KWBA promotes wood technical events and various education programs to increase public awareness of wood material and building design. Promotion of wood buildings for Korean quality of life and health is an overarching goal of the association. This Association was incorporated in 2001 and has recently been recognized by the MLTM (Ministry of Land, Transport and Maritime Affairs). KWBA is a non-profit association under Ministry of Land, Transport and Maritime Affairs            Register No.79 MLTM- 2001            President  : Kim, Kwang Jung            Hor. Chair : Prof. Kim, Jin Hee            Website  : http://www.wooddesign.or.kr            E-mail    : wooddesign@hanmail.net            Address  : Seowon-Bldg. Dogokdong 954-19, Gnagnam-gu, Seoul            Tel.        : 822-553-2001   Fax : 822-516-0082   _________________________________________________________        Education and Training ProgramWood Frame House Builder’s Program with Kookmin                 WBDC• This program is designed to provide students with the basic builder’s skills and practice in light wood framing, as well as some finishing carpentry training.        • Spring and Fall term for a year in Kunkook Unversity campus.        • With Designers : Assisting in wood frame building design specification writing and        • With Suppliers :  Explaining the capabilities and application of material and systems• With Contractors and Developers :  Estimating, making shop drawing and supervision PracticeThree month cyber studio program with KIAD Korea Institute of Arts & Design        • To provide students with a general understanding of wood building design and  practical knowledge through cyber studio projects during a three month period.Wood Frame Housing Inspection Pilot Program • Training for those seeking to apply for site supervisor and inspector qualifications. • Sitting for examinations are only available KWBA members who have been trained and educated at the KIAD and WBDC. • In future, the KWBA will develop a training program with MLTM for local regional officers who would become accountable and responsible for on-site inspections. __________________________________________________________ Technical Licensing Program        Licensing of Wood Building Designers and Technicians • In order to get National Qualification Testing from KHRD (Korea Human Resources Development), which is the government agent for national technical qualification, testing and registration. KWBA started a Wood Design Technical Qualification Examination in 2004. That includes Carpenter and Home Inspector certification levels. _____________________________________________________       A affiliated trainingfacilities with KWBA Wood Building Education Institute            Best Energy Home Design Institute            Healthy Home Research Center            Modern Wood Architecture Center           Wood Building Design Center            Post and Beam System Design Center    ___________________________________________________________       Institute Collaborators MLTM (Ministry of Land, Transport and Maritime Affairs) AURI (Architecture & Urban Research Institute) : Korea Wood House Center            KIA (Korea Institute of Architects)            KIRA (Korea Institute of Registered Architects)            KIFA (Korea Institute of Female Architects)            KIAD (Korea Institute of Arts & Design)            KOWFA (Korea Wood Furniture & Art  Association)            AF/PA (America Forest & Paper Association)            CWK (Canada Wood Korea Office)    ___________________________________________________________       University Collaborators            Kookmin University – Institute Education    Hanyang University – School of Architects            Kunkook University- -Continuing Education

Update on Wood frame Construction in South Korea

See 2012 Korea mission report for further background on the association.

Last year 13000 wood frame houses built in South Korea. The goal is to double this level in ten years. Developers now have developments with at least 150 units. There are 7 major housing developments currently underway.

As Korea’s prosperity improves, there will demand for country houses. Most Koreans can still not afford to buy a single family dwelling as land prices are very expensive and mortgage rules still require 70-80% down payment with mortgage rates being quite high.

In previous visits multiple housing development had been proposed using a peanut house concept. This concept did not get traction with banks who refused to approve mortgages where multiple land owners involved. Some investors building peanut houses and live in one and rent the rest. The market for this type of house is small, currently 500 units per year. Multiple storey, multiple family wooden structures may be difficult to promote in Korea because of concerns with fire safety and the difficulty of finding qualified contractors to build them. The ultimate solution for Korea may be hybrid designs with concrete and wood.

Using wood to improve the carbon footprint is desired. The standard 2X6 house may not provide adequate for energy or air tightness. There will be new passive house standard by 2017 followed by a zero emissions house standard by 2025. See Current Work & Future Trends for Sustainable Buildings in South Korea http://www.iisbe.org/sbconferences/Korea_SB_Report_SB08.pdf

Landlovers Korea Co., Ltd www.landlovers.co.kr Landlovers Korea has its main business in development and development consultancy. Its strength in project management has seen the company taking the lead in major and high profile projects in Korea, Singapore and Malaysia. Headquartered in Seoul, Korea, the list of major and high profile projects include facility usage consulting for Seoul World Cup Stadium in Mapo-Gu, Seoul and the development project of the General Hospital located in Gangseo-Gu, Seoul. Its dynamism stems from its key focus of always listening and delivering to the expectations of the customers.

Property Development remains the main area of business for Landlovers Group. With its experiences in Korea, Singapore, Malaysia and the Asia Pacific rim in both commercial and residential, as well as customers and land owners.

As a natural progression from its business services, Landlovers are able to advise customers on the feasibility aspect of any property development. This initial engagement model is offered to customers who wish to ascertain the project development costs as well as the development value. From such feasibility studies, customers are able to set their desired level of investment returns for any project. As part of the Feasibility Studies services, property development consultancy encompasses the drawing up of the project blue prints. Landlovers with its ability to cover all aspect of property development and project management has its main strength here. From the assembly of a team of experts and consultants to execution and management of the project itself, customers are able to draw up the project blueprints which ultimately ensure the success of the project from the timeline and financial returns aspect.

Kim Sang Byung is an Architectural Engineer by profession and has extensive experience in project management. His involvement in some of the region’s high profile projects include the restoration of the Raffles Hotel in Singapore, the Parc Oasis Condominium project in Singapore and the US Embassy project in Saudi Arabia. His expertise in the construction and project management industry has also been recognized by his peers in Korea and he currently sits on various high profile industry associations including the Advisory Committee for Korea Rural Community & Agriculture Corporation. Kim in addition is also the Managing Director of Landlovers Korea Co., Ltd.

J-City Project (Gok Sung Goon, Cheon La Provice) Location : Gok Sung Goon , Cheon La Province, Republic of Korea Period of Construction : Mar 2008 ~ Sept 2011(Phase 1) Site Area : 2,450 Acre ( Phase1: 980 Acre) GDV : USD 1.5 Billion (Phase 1: USD 530 Milllion) Project Summary : Retirement Village 10,000 Units of housing project consist of:§  Leasure Facilities including 36 Holes Goft Club§  Hospital & Specialist Clinic for the aged§  Commercial Shopping Complex§  Sports Center, Education Center§  Community Center & Others Scope of Assignment :  Project Development

Location of next project site: Janhung-gun Jeollanam-do Korea

Project name: JungNamJin LOHAS Town http://cafe.daum.net/go-lohastown

Multiple stage affordable housing development with schools, recreation, commercial district and health facilities. Entice businesses and workers to develop in areas adjacent to project. Healthy living and low environmental footprint design. There will be 8 phases with project completed in 2019. Houses 900-1200 sg. ft. with passive energy and heating. Parts of complex available to other developers who can introduce their own home design and features. Developer invited us to come down and visit the project when we are next in Korea.

DFD Fashion Group ChungPyung

Redevelopment of bankrupt and abandoned villas and a golf course. Interested in working with Dave Petrina to develop new timber frame villas

January 27 Travel to Busan Port Area

Busan is the fifth busiest seaport in the world,^[3] with transportation and shipping among the most high profile aspects of the local economy. Since 1978, Busan has opened three container ports including Jaseungdae, Shinsundae, and Gamman. Busan has one of the world’s largest ports and can handle up to 13.2 million TEU shipping containers per year.

The Busan-Jinhae Free Economic Zone Authority, one of two such administrations in Korea, was created to reassert Busan’s status as a traditional international trading centre. The port attracts ships from all over the globe and the surrounding area aspires to become a regional financial centre.

The Busan Port Authority (BPA) is responsible for developing, managing, and operating the Port of Busan. The BPA’s area of responsibility extends to Gamcheon Port, which supplements the Port of Busan, and Busan New Port on Gaduk Island, which was completed in 2011

Within the Port of Busan, the BPA manages the quay wall where commercial vessels berth, the fishing boat quay, piers, dolphins, anchoring facilities, storage yards and facilities, loading/unloading facilities, cargo distribution and sales facilities, and passenger conveniences. The BPA is committed to providing outstanding services that support national economic growth and make the Port of Busan a central harbor for Northeast Asia.

Busan Port

The single most dominant containerized cargo handled by the Port of Busan in 2007 was textiles (82 million tons). Other major cargoes passing through the Port of Busan included electronics (19.2 million tons), plastics and rubber (17.5 million tons), steel and steel products (10.7 million tons), chemical products (10.5 million tons), prepared foodstuffs (9.4 million tons), petroleum products (7.9 million tons), non-metal products (6.2 million tons), automobiles and auto parts (5.6 million tons), animal and vegetable products (4.6 million tons), wood and wood goods (3 million tons), fish and shellfish (2.5 million tons), cereals (1.5 million tons), cement (1.3 million tons), and other ores (1.3 million tons).

In addition to 38 million tons of “miscellaneous” goods, the Port of Busan handled other containerized cargoes in 2007 that included fertilizers, meat, scrap metal, leather, fats and oils, iron ore, rough wood, natural sand, milling industry products, sugars, petroleum and other gases, crude petroleum, and coal.

• South Port

South Port in the Port of Busan is the largest fishing base in South Korea. South Port is home to the Busan Cooperative Fish Market which accounts for 30% of the nation’s total marine products sales volume. The Port of Busan’s Jagalchi Market is the wholesale market for refrigerated fishery products, and several processing plants are located within the Port of Busan’s South Port area. South Port covers a total of 90 thousand square meters. It includes over 4.1 kilometers of quays and a 400-meter breakwater. The waterfront area covers 23.9 thousand square meters.

Gamcheon Port

Gamcheon Port was created to handle increasing cargo volumes entering and leaving the Port of Busan and to supplement the North Port. Gamcheon Port boasts piers for deep-sea fishing vessels and costal general cargo vessels. It also includes a ship repair yard. The Port of Busan’s Gamcheon Port handles some 12 million tons of cargo per year. Gamcheon Port covers a total area of more than 153 hectares. It contains over 6.6 kilometers of quays and a 1150 meter breakwater. The quays can berth 34 vessels in sizes varying from 50 thousand tons to two thousand tons.

Busan New Port

The Port of Busan continues to grow as its volume of container traffic increases. The Port of Busan has been forced to use general quays for containers, making cargo-handling complicated and inefficient. Further, container vessels continue to grow: they become bigger and faster every day. The Port of Busan’s aging facilities preclude the docking of larger container ships.

Nam Harbor Busan

The Port of Busan is also located adjacent to an urban area, and there are limits on port expansion. The Port of Busan decided to built a modern large-scale container terminal on Gaduk Island in 1995. Construction of the new terminal began in the fall of 1997 with the goal of completing the project in 2011.

Busan New Port contains the north, south, and west container quays on Gudak Island. The quay wall of Busan New Port has berthing space of 9.95 kilometers (6.1 miles) with 30 ship berths and the capacity to handle over eight million TEUs per year.

Container Terminals

• Port of Busan Gamman Container Terminal

The Port of Busan’s Gamman Container Terminal opened in April 1998. Four companies operate at the terminal: Korea Express Company Limited, Hanjin Shipping Company Limited, Global Enterprise Company Limited, and Hutchison Korea Company Limited. The facilities include 1.4 kilometers of quays and berthing capacity for four 50 thousand ton vessels. The Gamman Container Terminal in the Port of Busan covers 731 thousand square meters and has capacity to handle 1.2 million TEUs each year. The terminal is equipped with state-of-the-art container-handling equipment. Most  of lumber from western Canada is offloaded here.

• Port of Busan Shinsundae Container Terminal

The Shinsundae Container Terminal in the Port of Busan opened in 1991. Operated by Pusan East Container Terminal Company Limited, the facilities include 1.2 kilometers of quays and capacity to berth four 50 thousand TON vessels. Covering a total of over one million square meters, the Shinsundae terminal can handle 1.2 million TEUs per year.

The Singamman Container Terminal opened in the Port of Busan in 2002, and it is operated by Dongbu Pusan Container Terminal Company Limited. The facilities include 826 meters of quays that can berth two 50 thousand ton and one five thousand ton vessels. The terminal covers 308 thousand square meters and can handle 650 thousand TEUs of cargo per year.

• Port of Busan Gamcheon Container Terminal

Operated by Hanjin Shipping Company Limited, the Port of Busan’s Gamcheon Container Terminal opened in 1997. It contains 600 meters of quays with capacity to berth two 50 thousand ton vessels. This Port of Busan terminal covers 148 thousand square meters, and it can handle 340 thousand TEUs of cargo per year.

Cruise and Ferry Terminals

In the Port of Busan’s North Port are other cargo- and passenger-handling facilities. The International Passenger Terminal opened in 1978 under joint public operation. The terminal handles both passengers and cargo in the Port of Busan. The quay is 460 meters long with alongside depths from one to 8.6 meters. The quay can berth one 10 thousand ton, one three thousand ton, and two 200 ton vessels at one time, and the quay has capacity to handle 318 thousand tons of cargo.

The Port of Busan Coastal Ferry Terminal, opened in 1978, is also under joint public operation. The quay is 480.4 meters long with alongside depths from 6 to 8 meters. The quay can berth seven 500 ton vessels and one vessel of six thousand tons, one of four thousand tons, and one of two thousand tons.

The Central Port in the Port of Busan has been operating since 1944. It is operated by Dongbu Corporation Global Enterprise Limited. The quay is 646 meters long with alongside depths from 8.5 to 9 meters. This Port of Busan facility has capacity to berth four 10 thousand ton vessels, and it can handle 180 thousand TEUs and 756 thousand tons of general cargo. The Central Port at the Port of Busan has a 28.9 thousand square meter storage yard.

Also in business since 1944, the Port of Busan’s Pier 1 is under joint public operation and handles containers and general cargo. The quay is over one thousand meters long with alongside depths from 6 to 9 meters, and it can accommodate three 10 thousand ton vessels. With a 28.9 thousand square meter storage yard, Pier 1 can handle 381 tons of general cargo and 120 thousand TEUs of containerized cargo.

Pier 2 in the Port of Busan has operated since 1944 under joint public management. The quay is 924 meters long with alongside depths from six to 10 meters. The quay can berth one 20 thousand ton, three ten thousand ton, and one four thousand ton vessels. With a 14.5 thousand square meter storage yard, the Port of Busan’s Pier 2 can handle 2.3 million tons of general cargo and 80 thousand TEUs of containerized cargo.

Gwanganli Beach in Suyeong-gu Busan

Opening in 1944, the Port of Busan’s Pier 3 is operated by five companies. Pier 3 has a 1.3 kilometer long quay with alongside depths from 6.2 to 9 meters and capacity to berth one 20 thousand ton, three 10 thousand ton, two five thousand ton, and one 500 ton vessels. With a 61.7 thousand square meter storage yard, Pier 3 has capacity to handle 693 thousand tons of general cargo and 260 thousand TEUs of containerized cargo per year.

Pier 4 in the Port of Busan has also operated since 1944, and it is operated by Kukje Transportation Company Limited and Dong Bang Company Limited. With a 1.3 kilometer quay with alongside depth of 5.5 to 8.4 meters, the Port of Busan’s Pier 4 can accommodate one 20 thousand ton, four ten thousand ton, two five thousand ton, and one three thousand ton vessels. It has capacity to handle more than 2.3 million tons of cargo.

Operated by Wooseong Company Limited, the Port of Busan’s Grainary Pier opened in 1978. With alongside depth of 12 meters, the 371 meter long quay specializes in handling grains and can accommodate one 50 thousand tons vessel. It has capacity to handle over 1.2 million tons of cargo.

Opening in 1978, the Port of Busan’s Pier 7 was constructed to handle scrap metal and iron ore, and coal; however, decreasing volumes of cargo in those areas has led to the Pier being converted for handling of general cargo. Pier 7 can handle a total of over 3.7 million tons of cargo for the Port of Busan.

Youngdo-gu district Busan

Operated by Dongkuk Transportation Company Limited, the Port of Busan’s Pier 7-1 has a 539 meter long quay with alongside depths from 3 to 10.7 meters. It can accommodate vessels of 15 thousand (one vessel) and five thousand (two vessels) tons. Pier 7-1 has more than 20.4 thousand square meters of storage yard. Pier 7-2 is operated by Samju Shipping. Its 135-meter long quay has alongside depths from 10 to 11 meters, and it can accommodate one six thousand tons vessel. It has a 32.5 thousand square meter storage yard.

Pier 8 in the Port of Busan is used for military supplies and miscellaneous goods. Its 1 kilometer quay has alongside depths from 4.3 to 10 meters, and it can berth vessels of 15 thousand tons (3 vessels), 10 thousand tons (one vessel), five thousand tons (one vessel), and one thousand tons (one vessel). Pier 8 has capacity to handle 693 thousand tons of general cargo and 260 thousand TEUs of containerized cargo.

The Port of Busan’s Yongho Pier opened in 1990 to handle general cargoes including hazardous and refrigerated goods and fishery landings. Its quay is 210 meters long alongside depth of 11 meters that can accommodate one 20 thousand ton vessel. The Yongho Pier in the Port of Busan has an almost seven thousand square meter storage yard and has capacity to handle 456 thousand tons of cargo.

Gunwoo Housing Company http://www.gunwoo.net/

Gi Won lim CEO and Nam Hyoungman Import Manager

Gungwoo is the main supplier pro-store for builders in the Busan area and Jeju Island. They will be introduced to merit Kitchens as a follow-up. Looking for appearance grade lumber as well as 1 inch stock. Referred them to several companies.

Alas Korea Co Kyung Sung Timber Co.

Geuk Soo Park CEO

Looking for 1 inch lumber, plywood OSB and particle board. Passed on interests to appropriate companies.

Baesung Timber and Linwood Baesung www.linwood.co.kr

James Leem General Manager

Looking for 2 and better SPF as well as appearance grade 4 square pine for pressure treating. Using hemlock for pressure treatment as well. Wants wider SPF boards 2X10 and 12s. Would like to find a replacement for Gorman Brothers wood that had in past. Quality and amount has declined. Referred request to several mills.

January 30 Canada Wood Office Visit and Program Review

 Completed a review of the past year’s program and discussed tentative plans for next year. The Korea office and program experienced cutbacks last year due to tightening of funding. Proposed further cuts to grants next year will severely impact the Korean office to remain viable.

Discussed the market situation which is detailed below.

Discussion on proposed regarding system proposed by the Korean Forestry Service. See Appendix E. This policy shift will impact Canada’s ability to continue selling products into this market. As other countries are impacted as well, diplomatic and trade representative discussions are underway. Canada Wood and American Panelwood Association will collaborate on further actions.

FPInnovations are 5 years into a 20 year field test on pressure treated Hemlock and SPF durability. FPInnovations is asking for Canada Wood and Alberta help to pay travel costs for FPInnovates staff to continue field trials.

Canada Wood and Alberta Trade office have formed a close working relationship and continue to look for opportunities to work together in the future. Most recent collaboration has been the Gapyeong Daljeon Demonstration project.

AFPA may attend the Architecture Fair with Canada wood in late September if there is sufficient travel budget to allow attendance.

Korea Market and Hosuing Lookout

By Tai Jeong

Technical Director, Canada Wood Korea

May 5, 2015

Korea Economy, Construction & Lumber Shipments

Economy

The South Korean government has recently announced plans to add a further 15 berths to Busan New Port, increasing container capacity by 15m teu.

The South Korean economy expanded 3.3% in 2014 as increased facility investments offset slowing growth in construction investment and exports. Facility investment increased 5.8% in 2014, turning around from a 0.8% on-year contraction in 2013. Construction investment growth, however, sharply slowed to 1% from a 5.5% growth in the previous year.

Private spending came in at 1.8%, remaining mostly unchanged from a 1.9% on-year gain in the previous year. Their per capita gross national income, a gauge of the population’s purchasing power, reached US$28,180, up $2,001 from 2013.Exports rose 2.8%, slowing from a 4.3% increase in 2013, while growth in imports quickened to 2.1% from 1.7%.

South Korea’s gross domestic product grew 0.8% in the 1st quarter of 2015 from three months earlier on increased construction investment and improved spending.  From a year earlier, the economy expanded 2.4% in the first quarter. Consumer spending increased 0.6% from three months earlier, slightly quickening from a 0.5% rise in the fourth quarter. Government spending growth stayed on par at 0.2%.

Growth in construction investment sharply gained 7.5% on an increase in residential building projects. South Korea posted a trade surplus for the 38th month in a row in March of 2015 by reaching US$8.4 billion, up from $7.8 billion in February and $3.5 billion a year earlier as imports dropped at a faster click than exports.  Consumer price index inched up 0.4% in March from a year earlier, the slowest pace in nearly 16 years signaling that the economy remains gripped by flaccid private consumption.

Jobless rate dropped to 4% in March from a month earlier due to seasonal factors and more hiring by the manufacturing and service sectors. Volatility in the won-dollar exchange rate hit a three-year high in the first quarter of 2015 as the foreign exchange market seesawed due to speculation over a possible U.S. interest rate hike.

The exchange rate for Canadian Dollar averaged at 882.70 won in March, 2015, dropped 8.42 % from 963.86 in March, 2014 and slightly up by 0.61% from 877.36 in one month earlier.

Housing Starts

Mounting household debt after three rounds of rate cuts in less than a year keeps policymakers wary while the recovering local housing market means borrowings could rise above the current level, putting South Korea’s household debt-to-income ratio near the top among major economies.

South Korea’s housing starts in year-to-date February of 2015 increased 6.5% to 10,389 buildings from a year earlier 9,759 buildings owing to the continuous government measures to revamp the country’s property market.  Housing permits in the same period inched up 1.1% to 11,575 buildings from a year earlier 11,453 buildings.

The number of wood building permits and wood building starts in year-to-date February of 2015 remarkably increased 24.4% to 1,896 buildings and 13.2% to 1,345 buildings respectively compared with those in 2014.

Wood Building	2010	2011	2012	2013	2014			(%)
Number of Permits	10,922	11,686	11,826	11,710	13,062			24.4
Number of Starts	9,585	10,037	10,369	10,339	11,493			13.2

Source: Ministry of Land, Infrastructure and Transport (as a percent compared to previous year same month and period)

Overall, the South Korean real estate market conditions are continuing to show signs of improvement. Apartment prices in South Korea increased at a faster rate in the first quarter of 2015 compared with a year earlier reflecting growing demand for property purchase amid low interest rates.  Prices of apartments in the Seoul area shot up 0.75%, with its pace nearly doubling from 0.39% a year ago.  Overall, apartment prices in the metropolitan area jumped 0.95%, compared with 0.54%.

South Korea’s overall home transactions shrank slightly from a year earlier in February, 2015 while the number of home transactions in the capital region surged to a nine-year high. The number of home transactions came to 78,864, down 0.4% in February from the same month last year. However, home transactions in capital Seoul jumped 10.4% on-year to 12,990 in February last month with the number for the entire capital region, including Gyeonggi Province and the western port city of Incheon, growing 4.2% to 37,502.

By type, transactions of apartment units, the most common form of housing in South Korea, slipped 1.6% on-year to 57,885 in February, while transactions of row and detached houses gained 4.6% and 0.7%, respectively, to 11,999 and 8,980.

Lumber Shipments

In 2014, Canada concluded an agreement with the EU and implemented its FTA with South Korea, Canada’s first agreement with an Asian country, as well as putting into effect an investment protection agreement with China.

BC softwood lumber export volume to South Korea for the first two months in 2015 dropped 15.5% to 31,610 cubic meters as compared to 37,418 cubic meters for the same period in 2014.  The drop was largely attributed to the three-day traditional Lunar New Year’s Day break that fell in February this year, instead of January in 2014.

However, export value in year-to-date February continued to increase 2.6% to CAD$10.309 million as compared to CAD$10.047 million in the same period in 2014, owing to the strengthened Korean won against Canadian dollar.

Alberta 2014 share SPF estimate to be 12% of BC numbers and is worth about 100 Million CAN$. Market loss due to high percentage of spruce in SPF. Koreans cannot use spruce for their pressure treated products. Koreans also are looking for 4 square materials and appearance grade lumber versus normal 2 and better SPF that has wane. Alberta mills have a cost disadvantage at present due to currency fluctuations and extra transportation costs.

BC Softwood Commodity Product Sales in South Korea (Softwood lumber, plywood, OSB, MDF and Particleboard)

Meeting with Alberta Trade Office and Trade Commissioner Staff

New First Secretary is Leslie-Ann Reed who is replacing Andrea Moen recently reassigned to Tokyo.

They are working closely with their counterparts in the American Embassy on the regarding issue.

Alberta Trade office is looking for participation at upcoming lifestyle fairs. These fairs give Alberta to highlight our lifestyle and of course exports such as wood products and beef.

Will be working actively to get Alberta elected officials over for ribbon cutting of Gapyeong Daljeon Demonstration project when landscaping completed this summer. Fall 2015 may be first opportunity. Minister Thomson from BC may want to do ribbon cutting with his fall mission.

Trade Commissioner Wood Product Sector Notes 2014

• An important producer of cement and other construction products, South Korea imports 90% of wood products used in the market.  This trend is expected to continue.

• In 2013, South Korea imported over $570 million in forest products from Canada, including wood, pulp and paper and other forest products. Major competitors are China, the US, Indonesia, New Zealand, and Malaysia. The South Korean market receives wood products from 100 different countries and, as a result, it is implementing new regulations in order to address differences in quality.

• In 2013, Canadian exports to South Korea of wood, printed matter, pulp and paper and related products were led by British Columbia ($301 million), followed by Alberta ($106 million) and Quebec ($78 million)
• South Korea is working to address the carbon footprint and “sick house syndrome” from non-wood construction methods. South Korean consumers view wood as a natural, healthy product which promotes wellness which could lead to increased demand for wood-frame housing. The South Korean government is focusing on green policies, including ‘sustainable housing’, which present an opportunity to showcase Canada’s sustainable forests.
• South Korea is generally a price-sensitive market. The sector is focused primarily on consumers who are looking at rural or leisure housing with unique wood design features. Although the overall South Korean construction market is sluggish due to over-building, there are still opportunities in these segments, as the population ages and shifts to a retirement lifestyle.
• Recently, Canada and South Korea signed a Memorandum of Understanding (MOU) on cooperation in the field of forestry. With this MOU, it is expected that the two countries will strengthen and expand the bilateral relationship in both commercial and non-commercial areas.

·        Canada-Korea Free Trade Agreement (CKFTA)

The Canada-Korea Free Trade Agreement, which was signed in September 2014 and is expected to enter into force in the coming months, will provide new opportunities for Canadian exporters by removing tariffs and otherwise enhancing market access for forestry and value-added wood products such as lumber, plywood and oriented strand board. Market Overview

Current Issues : Korea imposing a new grading system on Canadian wood products that are already graded in North America. (See Appendix C) Re-grading will result in Canadian lumber being graded down and will fetch a lower market price in comparison with North America. Many producers are backing off this market for now. This grading system will also impact American wood producers. Both countries are making representation to the Korean government and Korean Forest Service on this issue. The Europeans are in a position to capture more market with the quality of products that fit the Korean Grading system combined with competitive prices due to a weaker Euro.

Key South Korean companies include: Samik, Dewha, NS home, Hanyang Trading, Hanglass, KCC, LG Hausys, and Eagon Windows & Doors Co. Ltd.

Canadian companies in market include:  Canfor, Interfor, Tolko, Weyerhaeuser.

• South Korean consumers want good quality at a competitive price.
• Interest in environmentally-friendly building materials and energy-efficient housing.
• Business opportunities exist for:
  • wood products
  • wood frame infill construction
  • technologies to increase energy efficiency/reduce CO₂

Key Wood importers:

• Samik
• NS Home
• Daehwa
• Sunchang
• Building Products:
  • Eagon

Victoria Harbour Hong Kong

Mission Objectives

• Work with BCWood Alberta Agriculture and Forestry and promote Canada Wood and profile AFPA member companies at the Interzum 28 March – 1 April 2015 China Import and Export Fair Complex, Guangzhou.
• Share booth space with Alberta Agriculture and Forestry and host an Alberta Night at the show. Completed.
• Do the feature presentation on Alberta at the show seminar. 
•  Work with Guangzhou and Alberta Hong Kong trade office personnel and do site visits and follow-ups with wood manufacturing associations in the Guangdong prefecture. Completed. Mission notes presented below.
• Continue to discuss and plan next year’s North Asia activities in light of grant funding decreases and GOA fiscal restraint measures.

Recommendations

1. Gary Mar or Ron Hoffman were not available for discussions on this trip. A copy of the mission report should be provided to the Hong Kong Trade Office. Some initial discussions on Alberta Agriculture and Forestry \AFPA\ BCWood using and sharing an office in trade office should Alberta Trade Office. Some dollars contributed for use of space and minimal office support and connectivity.
2. Provide the Guangzhou Consulate Office with a copy of the mission report for any follow-up to the site visits in the Dongguan. A follow-up visit to Guangzhou would be prudent to meet the new expanded Alberta Trade Office in Guangzhou.
3. If the AFPA attends the Interzum show again a full time interpreter and connectivity would improve the effectiveness of the show for the Association.
4. Plan another mission to conduct further grading seminars with BCWood and Alberta Government.

 Mission Notes

March 27 Informal meeting day Hong Kong

March 28 to March 30 CIFM / Interzum Guangzhou 2015

Canada Wood Pavilion -Courtesy Jeff Li BCWood

A total of 1,269 industry manufacturers and suppliers from 35 countries and regions gathered together at CIFM / Interzum Guangzhou 2015 to showcase their latest wares and meet with existing and prospective buyers. Among the 309 overseas exhibitors were participants from 8 country pavilions. This was the twelfth show.

Occupying 140,000 square meters of trade floor, the event was the largest to be staged in the 11 year history. Exact visitor statistics are not available but visitor estimates are between 60 and 70 thousand. Jeff Li felt attendance was down from previous year reflecting the slowdown in the economy in China and particular Guangdong region.

Product segments of Interzum Guangzhou include:

• Materials and Components for Furniture Production ● Machinery, Materials and Components for Upholstery and Bedding ● Machinery, Materials and Components for Interior Works ● Machinery and Auxiliary Machinery for Woodworking and Furniture Production ● Others (Media, Trade Associations

Established since 2004, CIFM / Interzum Guangzhou provides furniture and design professionals with immeasurable opportunities for networking with a quality pool of local Chinese and overseas sellers and buyers.

The success of CIFM / Interzum Guangzhou 2015 has again demonstrated the significance of this event for the entire woodworking machinery, furniture production and interior design. Industry. The show may be extended from the 5 day format in 2016 based on exhibitor and visitor feedback.

Southern China is one of the biggest furniture manufacturing markets in the world, and CIFM / Interzum Guangzhou represents the only trade show in the Asia-Pacific region that can boast an international standard in terms of both visitors and exhibitors. Some 40% of China’s furniture manufacturers are located in Guangdong, where the furniture production industry is worth US$6 billion, and produces over half China’s worldwide exports.

As the world’s largest manufacturer and supplier of home and office furniture, China has become an important industry hub. It regularly attracts manufacturers of machinery, suppliers of raw materials, and final producers for this lucrative industry.

See Appendix B for list of visitors to BCWood pavilion. There were 140 significant visitors that exchanged cards.

See Jeff Li BCWood show report in Appendix C for further observations on the show.

The pavilion was excellent design and functional. Director Jeff Li has great contacts in China and his reputation drew large number of visitors to the pavilion. Majority of visitors were interested in accessing coastal and hardwood species. There were a few good leads for SPF, OSB and plywood producers. They were referred to forest companies with marketing presence in south China.

The most valuable aspect of the Interzum experience was the Alberta Reception. George Pan and Dan Wilkinson provided a quick overview of Alberta Forests and Industry. This was followed by a light buffet and network reception. About 40 potential buyers, guests and trade office people attended the reception. A number of guests exchanged cards which are highlighted in yellow in Appendix B. A copy of the presentation is provided in Appendix D.

Guangdong Site Visits. March 31 to April2 Dan Wilkinson, Christopher Lui Hong Kong Alberta Trade Office and Rita Zhang Trade Commissioner Guangzhou Consulate

Guangdong Timber Industry Association (www.gdtia.com) Ms. Jully-Lee

               

Christopher Lui HK Trade Office Ms. Jully -Lee Guangdong Timber Assoc. Rita Zhou Trade Commissioner

The Association is a voluntary organization that includes timber industry enterprises, government administrative and research organizations.    Met with Ms. Jully-Lee and provided materials and an overview of Alberta forests and wood products. Ms. Jully-Lee took us to their wood identification lab and had some general discussions of the current market conditions. The Guangdong area is experiencing a significant slowdown in business due to Europe market volatility and policy changes introduced by the National Government.

Ms. Jully-Lee provided a brief overview of the Association services and major focus areas which includes:

1. Investigation, research, collect, collate relevant national guidelines of national and prefecture level forest policy decisions, industry development and timber market information, housed in the association’s website http:. // www gdtia.com, Guangdong Yuzhu International Timber Market (http: // www .yuzhuwood.com) and “Guangdong Wood” magazine. This information is provided free of charge to members of the association free of charge. Association members may also advertise in the wood magazine.
2.  Assist members to apply and construct credit and patent applications.
3.  Represent members’ interests and requirements with various government agencies. Assist customs clearance dispute.
4.  Hold seminars on laws and regulations for timber distribution, patent development and other areas of interest to members.
5. Promote trade fairs, exhibition investment, joint procurement activities, promoting exchanges and the development of domestic timber trade.
6. Improve the technological level of the industry and personnel by promoting technological progress.

• Promote timber production, distribution, processing through new technologies, new processes, and new products. Organize joint ventures with the industry at home and abroad, study tours and other activities to promote the development of the industry.

• Coordination of relations industry members and non-members, consumers, and other social organizations.

• Timber species identification, specific gravity testing, gauging timber business.

Yuzhu Market is one of four local markets in the greater Guangdong Yuzhu International Timber Market. (See Below)

 

Guangdong Yuzhu International Timber Market (Visited Guangzhou, Foshan and Dongguan sites previously 2013, 2014)

Yuzhu market is located at Huangpu District, Guangzhou Municipality on the bank of the Pearl River. The market possesses of a cargo wharf with 5000 ton capacity as well as water, rail and truck connectivity with domestic and international docks and harbors. There is an intermodal transfer site for unloading containers from trucks or loading them onto barges for transport back to ship loading facilities. There is road and subway line access to the rail stations, ferry and airport terminals in Guangzhou and Shenzhen.

Market area covers 360,000 m2 with stalls and office buildings covering 200,000 m2. Twelve alleyways connect with Huangpu Avenue directly, and the stores are 10m high and 6 m wide, ideal wood business. The market is divided into plank and timber; artificial panel; log trade; veneer and moulding; wood floor: wood door direct distribution; storage center, dock handling materials logistics; and the commercial informational center.

 Like many major wood market companies in China, they provide complete and coordinated services to their lessees and their customers. The market management provide coordinated process services for customers such as: business certificate of wood trade; complete industry and commerce tax registration; code certificate of enterprise; register bank accounts; deputize the business licenses for import & export wood products; sale wood products by proxy; provide a loan service for businessmen in the market; timber quarantines paperwork and wood product and log transportation.

Yuzhu International Timber Market manages many kinds of top- grade wood imported from all over the world. In 2014, the trading volume of wood in the market was more than 1 million m3 worth 2.5 billion Yuan. The terminal logistics transaction fees topped 8 billion Yuan.

Yuzhuwood.com is the biggest e-commerce platform of Chinese timber industry and the information service platform that accesses the timber market worldwide. There are 50000 registered companies from over 100 countries.

The website offers the following features: market quotation, information issue, products display & trade, global wood price. The real-time update of prices of wood and products at home and abroad, and market quotation based on the physical market. The platform provides a forum for registered sales people and purchasers to do business both on-line and off-line. Yuzhuwood also provides market intelligence data, data collection and editing services, an online shopping mall with 140,000 registered members.

After meeting we walked through market and talked to some of the companies that are interested in acquiring more western Canada wood products. Gave an overview to Mr. Liu of Senyuan Wood Industry an overview. He thought our SPF wood was good but too expensive.

SenYuan Wood Industry has decades of experience in the timber business. They are currently focused on Latin American timber such as: Red Sandalwood, South America Pear, Snakewood – Piratinera guianensis (Mulberry) , Argentina green sandalwood, red sandalwood, South America purple core hematoxylin (Mahagony), iron pigeonpea, and other high end valued hardwoods. They source their wood from legal and sustainable sources. They were curious about Alberta wood but think the species and quality is not suitable for their customers.

Wed, Apr 1 Morning Meeting with the Consulate General of Canada in Guangzhou

Met with Duane Robson Counsul & Senior Trade Representative who has recently been transferred to Guangzhou. Duane last posting was in Seattle and before that two different portfolios in Tokyo. Discussions around Chinas politics and the state of the economy. Duane briefed us on plans to accommodate three new Alberta Trade Office staff that has been recently announced. Hiring is currently underway. Rita Zhou who supports the wood product mission reports to Duane.

Embassy Market Report referred to during discussions is presented below.

Building Products & Construction Profile^{Footnote 1}– East China

1. Sector Overview

For the recent a few years, the Chinese construction sector has experienced aggressive growth, well above the country’s already-impressive GDP growth. In 2013, the sector generated approximately CNY15.9 trillion (~CAD$2.9 t) total outputs with the growth rate of 16.1% compared to 2012, accounting for 28% of national GDP ^{Footnote 2}. Total real estate investment also reached CNY 8.6 trillion (~CAD$1.59 t) during 2013, among which 68.5% was made in residential property and half of the total investments were made in East China region. Despite the sector’s robust growth in recent years, it is generally viewed that the growth would slow down to a more moderate pace in the next five years (10%~17% according to some analysts’ estimates) in light of the surging land price and tighter regulatory control.

The Yangtze Delta River Delta region (comprised of the city of Shanghai, Jiangsu Province and Zhejiang Province), being one of the fastest growing economic centres in China, accounts for about 30% of all construction in China.

This sector is dominated by Chinese companies. As of the third quarter of 2013, there were totally 74,432 construction companies, of which 6,843 were state–owned enterprises while western firms only serve around 1% of the market^{Footnote 3} . The construction sector we refer here includes developers, builders, architectural/engineering services firms, and building material providers.

2. Market Prospects

Prospects for the construction sector remains to be promising given China’s immense need for greater housing supply and the rapid urbanization. Each year China is adding around 2 billion square meters of building spaces. China is already building one third of the buildings in the world and has the largest construction market in the world. It is estimated that by 2025 more than half of the world’s buildings would be in China.

The country’s rapidly expanding domestic economy and ongoing urbanization requires construction spending on infrastructure development and upgrading. The investment on urban rail transit is projected to surpass CNY 700 billion in the 12th FYP period with 170 cities requiring mass transit systems and 244 civil airports built by 2020^{Footnote 4}.

The over-heating of residential property market has been a long-time issue in China. Chinese government is taking measures to increase land supply and to suppress investment-driven speculation. There are divided views regarding the trend of China’s real estate market given the disparity between supply and demand throughout different parts of China. Nonetheless, keeping the real estate market under control is high on the government’s agenda. Since 2012, China has introduced property tax in first-tier cities and raise minimum down-payment rates to limit the purchase of secondary homes.

As one of the world’s largest economies and the largest energy consumer, China now has over 40 billion square meters of buildings while only 4% of which adopt energy-saving measures. As building-related energy consumption accounts for around 40% of the country’s total energy use, the construction sector is evolving to integrate key themes such as energy-efficient and environment protection which are considered essential for China’s sustainable development. Energy and environment has been given great importance in China’s 12th Five – Year Plan (2011-2015), with the goal to construct 1 billion m2 of “green building” floor space by 2015 – up to 20% of the total floor spaces. The government also set the target that by 2020, 30% of new construction (measured by floor area) will be certificated as green buildings, according to the Ministry of Housing and Urban-Rural Development.

There has been increasing popularity among leading developers to apply for LEED certification for their high-end properties. China also developed its own green building certification, the Green Building Design Label, known as the “Three Star” in which the system assigns buildings from one to three stars (the highest). The energy efficiency label is still voluntary for most residential and non-residential buildings, but the government requires certain buildings to be certificated by at least one star, especially for government-owned large public buildings. Both central and regional governments have released various energy retrofitting subsidies to incentivize the adoption of green building standards. Although the pace is slow, the prospect is promising.

3. Sub-sector identification

Architectural services, wood-frame structure, and building materials are the three main sub-sectors where Canadian companies and industry players remain active within China.

Architectural Services

Approximately 30 Canadian architecture companies have representation in the Yangtze River Delta region, ranging from one-person representative offices, to local subsidiaries with dozens of employees. Some companies operate from Canada in close partnership with Chinese companies. Over the last two decade, Canadian architects have designed 200 plus projects all over China, including numerous landmarks. Each of these was done in cooperation with local design institutes, as construction drawings must be “stamped” by licensed firms only.

The lack of sophistic design expertise and international reputation fosters the partnership between Chinese design institutes and their foreign counterparts however the low design fees and weak IP protection remain to be key concerns of foreign firms. Apart from that, the licensing and qualification regime is often seen as the main obstacle for foreign architectural and engineering firms to operate efficiently in China.

In coping with those challenges, finding reliable local partners and developing niche areas with fast response to a changing economy are essential for foreign players to thrive in this market. With the rapid urbanization across China, Canadian architects may find substantial opportunities in second and even third tier cities. According to official statistics (2006 to 2011), the construction “compounded annual growth rates” (CAGRs) found in many of the northeast and central provinces had consistently been higher than those of Beijing and Shanghai. Nonetheless, the first-tier cities remain as key markets for high-end Western products and services.

Wood frame Construction and Wood Products

From 2010 to 2011, the 27% growth in Canadian exports to China was in large part due to exports of wood products (wood pulp and lumber). In particular, exports of wood increased by more than 74% to almost $1.5 billion.

During 2012 China became Canada’s number-two export destination country. In this period, Canada’s global exports of articles of wood increased by 10% year-over-year while exporting to China decreased by 4%. The quantity of exports to China increased slightly but this was offset by lower prices.

Regardless, this was viewed by the Canadian wood industry analysts as a positive performance considering a massive slow-down in China’s construction activities in 2012. According to the International Wood Markets, despite the slower housing market in 2012, China’s total import and export trade value of forestry products still increased by 3% year-over-year, reaching $120 billion. Canada remains the largest lumber supplier to China in 2012 with a 31% market share (total softwood and hardwood)^{Footnote 5}.

The Canadian forestry industry is primarily represented in China through the Canada Wood Group and BC Forestry Innovation and Investment (FII). Canada Wood is funded by member forestry associations, provinces and the federal Canada Wood Export Program. BC FII is a Crown agency of the BC Government. These two organizations are mandated to expand the market for Canadian wood products specifically dimension lumber, which is not yet a widely-used building material in modern China. These organizations work closely to develop the market and to position wood as a cost-competitive building materials in China. Their key activities include: product promotion events and training seminars, technology transfers and technical support for wood-frame structure, academic exchanges and joint research with academics, relationship development with local governments to establish relevant building and fire codes, and showcasing demonstration projects. These efforts support the Canadian forestry companies on the ground to expand their market presence. Since 2010, BC FII and Canada Wood Group have also successfully introduced wood truss reroofing programs to Shanghai, Nanjing and Qingdao.

Specialty and Green Building Products

China is one of the world’s largest producers and consumer of building materials. It remains on the top of the list in many primary building material productions including cement, flat glass, constructional ceramic and sanitary ware, stone and walling materials. The market is extremely price sensitive and competitive with many domestic and foreign players. The construction and quality standards lag behind developed countries but nevertheless there is a demand for specialized imported products which offer value and performance over domestic offerings such as energy efficient products. Chinese regulators are very risk averse when it comes to the adoption of new building materials and techniques with which they are not familiar, however the market can change dramatically due to disruptive events.

Yangtze Delta region has a large number of high-rise buildings and skyscrapers, so energy shortage is always an issue. Building products such as insulation, waterproofing, windows and frames, heating and cooling system which offer significant cost advantage and adaptable for high-rises buildings are desirable. Canadian companies need to find suitable ways to access the market, through joint ventures, distributors or wholly-owned enterprises with some manufacturing capability in China. IPR issues should also be taken into account when making such a decision. In addition, as architects are often not allowed to specify products name in their drawings, the developers are the decision makers in selecting building materials and products. The conflict of interests and lack of expertise in building materials and products require building products companies to make their presence to not only architects but also developers.

As a general guideline, the Chinese standards of “Green Building Materials” apply to the following four categories:

• Certain proportion of building materials sourced from nearby regions (the Shanghai standard is within 500km of construction sites)
• Enhanced efficiency and energy-saving during material production phase
• Enhanced efficiency and energy-saving during the construction phase
• Enhanced energy-efficiency and sustainability during the operation (post-construction) phase

4. Challenges and growth drivers

Challenges

The majority of Chinese construction companies operate in the low value segment characterised by labour intensive, high volume and low margin activities. The lack of expertise and know-how created strong opportunities for foreign firms with advanced technology and design capacity. At the same time there are significant challenges, mainly reflected in the areas of regulation, price competition, and business practices.

In many subsectors within construction, foreign companies face strong regulatory constraints, including the minimal registered capital and assets, minimum yearly turnover, and minimum permanent personnel. In addition, usually qualifications and project experiences obtained inside of China are acceptable as references.

In the Chinese construction market, price often times outweigh quality and environmental consciousness. The misaligned incentive scheme caused developers to focus on lowering costs and maximizing profits instead of investing in sustainable design and energy-efficient products and solutions.

As in many other sectors in China, relationships are often more important than product and service quality. Domestic companies with close ties with the government often have easier access to licenses and qualification certificates granted by authorities, and most importantly better access to tendering information.

Growth Drivers

Urbanization: urbanization in China has been moving very aggressively in the recent years. In 2012, China’s urbanization rate reached 52.57% and by 2025 urban population is expected to rise to 926 million. To this end, China plans to spend CNY 40 trillion (~CAD $7.4 t) on urbanization to bolster the economy and to bring 400 million people into the cities over the next decade^{Footnote 6} .

Labour force shortage: decreasing supply of construction workers will drive up the requirement on labour efficiency. According to the NBS of China, the total number of employees in China has been decreasing since 2010 while the productivity is going up. The majority of Chinese workers have gotten their salary increased by 10% in recent years. This is an encouraging sign for the promotion of Canadian wood-frame housing given its much shorter period of construction time compared to concrete and steels.

Demographic changes: the growing of elderly population has becoming a predominate issue in China. It is undoubtedly that China needs more senior care centers in an economical way. At the same time, China is gradually opening up the one-child policy and allowing couples to have second child. The potential demands for better, large and higher-quality houses will be fairly strong. The residential floor space per head in Chinese urban areas has doubled for the last decade and likely to rise to 41m2 by 2020^{Footnote 7} .

Energy efficiency policies: As China seeks to reduce energy consumption per unit of GDP by 16% by 2015, more and more new residential and public buildings are required to implement energy efficiency design standards aimed at saving 65% of energy use. Shanghai was identified as one of the model cities for public building retrofitting with the ambitious target to cut energy consumption by 20% for 4 million m2 of public buildings by August 2014. Hangzhou is another city required by the central government to include low-carbon development models in their regional 12th Five-Year Plan. Those government policies coupled with growing environmental awareness become the engine to drive green building practices to grow significantly in the coming years.

Canadian Government Contacts

Foreign Affairs, Trade and Development Canada North Asia Commercial Relations (GPC) Email: Mark.phelps@international.gc.ca

April 2 Shunsheng Zheng DongGuan Tuoke Jia Fu Trading Co. Ltd. www.tolkocanfor.net Old Dongguan Timber market

Mr. Zheng Tolko Canfor

Biggest SPF user in Dongguan market area. He imports J-grade, 2 and Better and economy grade. He uses Canfor and Tolko SPF, Tolko OSB. Wants to source higher grade SPF from other producers in BC or Alberta. He does not like the quality of the economy grade lumber he has been getting. Suggested 2 and better a better fit for his business. He is requesting to attend the BCWood Global Buyers Forum this year.

 April 2 Adison Trading Co (www.adisonco.com; 民耀贸易公司；Elliott Ma Hang Shun马亨顺先生；Xing Ye Timber Market, Hou Jie, Dongguan

Met Mr. Ma in 2014 at the grading seminar in Dongguan. He has recently moved to the new Xing Ye Timber market from the old Houje City market. The new market affords more spacious stalls, updated logistics for product shipments and reduced taxes. Mr. Ma business is tied to his trading company in Hong Kong. The Chinese business focuses on appearance grade west coast species such as Hemlock, Douglas fir, Alder, Wester Red Cedar, Sitka Spruce Grand Fir. He also imports appearance grade wood from Austria and Finland. He is interested in appearance grade SPF but it is difficult to find sufficient volumes. Mr. Ma hosted us to lunch.

Dongguan Changneng Construction Material Company Limited http://www.dgchangneng.com/about.html

We met with Jacky Wang Chairman, Jacky Yu General Manager and Lin Ryan Purchasing Manager. We gave them an overview of Alberta wood products and companies. They have bought some SPF from Weyerhaeuser. They work with Olympic Industries to place orders for Canadian wood products. Chairman Wang and General Manager Yu toured us around facility

Chang Nang Building Material Co., Ltd., was established in 2010. The company covers an area of over 30,000 square meters and has a large wood product inventory contained in warehouses and timber processing centers. The company is currently focused European and US pine lumber species as well as hemlock from BC. They manufacture domestic pine species as well as remanufacture lumber for specific customer needs.

They act as wholesaler for the building materials market, construction companies and furniture industries. The company wants to long-term and stable strategic partnerships so as to provide sufficient raw materials for their business.

They have interest in securing more appearance grade SPF from Western Canada. Company contacts were passed onto AFPA members and key timber brokers for follow-up. The photo display below shows examples of their wholesale and remanufactured products.

Market Report from Canada Wood

China Economy, Construction & Lumber Shipments

By Fred Spoke

Managing Director, Canada Wood China

June 3, 2015

Posted in: China, Market News

Economy

China’s housing sales in major cities, measured by floor space, jumped 37.4 per cent in May from a year earlier, helped by government’s stimulus policies and developers’ push to clear inventories.

HSBC flash PMI signals persistent weakness in economy.

* Reinforces expectations of fresh policy stimulus

* Output sub-index at 13-month low

* New export orders at 23-month low

* Premier Li says 7-pct growth target achievable (Repeats to remove text of earlier story; adds Premier Li comment, analyst quotes)

Chinese factory activity contracted for a third month in May and output shrank at the fastest rate in just over a year, a private survey showed, indicating persistent weakness in the world’s second-largest economy that requires increased policy support.

The poor reading, which followed a raft of downbeat April data, reinforced analysts’ views that Beijing has to take bolder steps to combat a protracted slowdown, as growth threatens to drop below 7 percent for the first time since the global financial crisis.

“The subdued flash PMI print suggests there is no clear sign of near-term stabilization in the economy. Risks to the outlook remain to the downside,” Barclays economist Shengzu Wang said in a research note.

The preliminary HSBC/Markit Purchasing Managers’ Index (PMI) fell to 49.1 in May, below the 50-point level that separates growth in activity from a contraction on a monthly basis.

Economists polled by Reuters had forecast a reading of 49.3, slightly stronger than April’s final reading 48.9.

After a brief rebound in February, the index has now been back in negative territory for three consecutive months.

“Softer client demand, both at home and abroad, along with further job cuts indicate that the sector may find it difficult to expand, at least in the near-term, as companies tempered production plans in line with weaker demand conditions,” said Annabel Fiddes, an economist at Markit.

“On a positive note, deflationary pressures remained relatively strong, with both input and output prices continuing to decline, leaving plenty of scope for the authorities to implement further stimulus measures if required.”

The latest survey showed China’s factories continue to struggle with sluggish demand at home and abroad.

The sub-index on new export orders fell to a 23-month low of 46.8 in May, while overall new orders shrank for the third straight month, albeit at a slower pace.

The output sub-index contracted for the first time this year, to a 13-month low of 48.4, while the employment sub-index showed manufacturers shed jobs for the 19th month in a row.

The central bank is widely expected to cut interest rates further in coming months, on top of three reductions since November, and is also likely to lower banks’ reserve requirements again to reduce companies’ borrowing costs and encourage more lending.

The government is stepping up fiscal spending, with a strong focus on infrastructure projects. China has approved 250 billion yuan ($40.30 billion) of railway and subway projects so far this year, the country’s top economic planner said on Monday.

Julian Evans-Pritchard at Capital Economics said the PMI painted a mixed picture, with domestic demand possibly showing signs of stabilizing in response to earlier policy easing but still under pressure from a weak property market. Exports, meanwhile, have been hurt by the yuan’s rapid trade-weighted appreciation.

WHEN WILL STIMULUS KICK IN?

China’s economic growth slowed to a six-year-low of 7 percent in the first quarter, weighed down by the cooling property sector and softening demand, which is leaving more and more factory capacity standing idle and depressing companies’ profits.

Recent data showed a further loss of momentum heading into the second quarter; with investment growth in January-April falling to it’s lowest in nearly 15 years.

Most analysts have already penciled in sub-7 percent growth for the second quarter, raising the risk that the government will not meet its full-year growth target of around 7 percent.

State Information Centre, a top government think-tank, has predicted second-quarter growth of 6.8 percent.

But signs that the government is ratcheting up its policy support for the economy have fanned optimism that growth could bottom out in the second half, though few analysts expect a solid recovery.

“We expect economic growth to gradually stabilise as the government is determined to safeguard its growth target, but policy measures are still not strong enough,” said Xu Gao, chief economist at Everbright Securities in Beijing.

The official news agency Xinhua on Thursday quoted Premier Li Keqiang as saying he was confident China has the ability to meet the 2015 target. (Editing by Kim Coghill)

Source: various

Construction / Housing

China’s housing sales showed signs of a turnaround in April, posting year-over-year growth for the second time since December 2013, as home buyers waded back into the market following recent policy easing measures by the central government.

While sales picked up sharply, other metrics such as investment and construction starts in the all-important property sector continued to show weakness.

China’s housing sales in the first four months fell 2.2% to 1.49 trillion yuan ($240.3 billion) from the same period a year earlier, marking an improvement from the 9.2% decline in the first quarter, according to the National Bureau of Statistics Wednesday.

In April alone, housing sales rose 16.0% from a year earlier to 485.4 billion yuan, according to calculations by The Wall Street Journal based on the official data.

“The market is turning the corner,” said Frank Chen, an executive director of property consultancy CBRE.

Policy makers have been worried that a prolonged property downturn would make things worse for the Chinese economy, which grew at its slowest pace in six years in the first quarter and will likely post its worst full-year performance in more than two decades.

On Sunday, the central bank cut benchmark interest rates for the third time in six months, a move that could help the emerging signs of improvement in housing demand. With the latest interest rate cut, the effective mortgage rate on loans of more than five years has dropped to 5.37% from 5.61%.

Down payment requirements have already been eased for second home purchases and local governments have been rolling back some of their restrictions on home purchases.

Policy makers are hoping such moves will convince people to buy a home.

Alex Huang, a production engineer in Shanghai, is one such potential buyer who just might be convinced to take the plunge.

“I’m looking for an apartment near my office in Minhang district, and I’m more confident in buying a place in Shanghai rather than in my hometown, where prices are still falling,” said the 28-year-old Mr. Huang. He believes housing prices are more likely to appreciate in Shanghai than in Changsha–where he was born–a city around 680 miles west of Shanghai.

Average home prices in major Chinese cities are stabilizing, analysts said, and the sales momentum has picked up in cities such as Beijing, Shanghai and Shenzhen, where developers are still planning new projects. However, the situation in smaller Chinese cities remains weak, with plenty of unsold inventory.

“The situation is uneven. Home prices in tier one and some tier two cities are going up, but elsewhere, prices are still weak,” said Jinsong Du, a Credit Suisse analyst. He adds that while housing sales are expected to pick up in the second quarter, especially on a year-over-year basis, the forecast for the second half is less clear.

Analysts also said that they anticipate further accommodative monetary measures from Beijing given that property starts and investment in real-estate development nationwide are likely to remain sluggish for some time as developers fear overbuilding.

New construction starts for residential and commercial property in the first four months fell 17.3% from a year earlier to 358 million square meters. That compares with an 18.4% decline recorded in the first quarter.

Source: Wall Street Journal

Lumber Shipments

After two months of decline, BC softwood lumber export volume to China in the first three months of 2015 was 1.572 million cubic meters as compared to 1.415 million cubic meters over the same period in 2014, an increase of 11%.  BC softwood lumber export value over this same period was $323.69 million, an increase of 28%.

 

Oldest Wooden Building in Japan Sapporo 1867

Mission Objectives and Results

1. Work with BCWood and promote Canada Wood and profile AFPA member companies at the Nikkei Architectural & Construction Materials Show March 3 to 6. About 100 persons visited the booth.

• Share booth space with FPInnovations.

• Continue business contact building by visiting key companies and associations in Sapporo. Carried out 4 site visits. No outstanding follow-up issues.

• Assess state of building technology.
• Meet with trade embassy staff in Sapporo and Canada Wood on behalf of ESRD to discuss plans for the 35^th anniversary celebrations of the twinning of Alberta and Hokkaido Prefecture. Possible outcomes from the meetings was a possible wood seminar in Sapporo.

• Continue to discuss and plan next year’s North Asia activities in light of grant funding decreases and GOA fiscal restraint measures. Activities will be curtailed as result of reduced or possibly no funding. One trip to japan to attend the Japan Home Show in November is proposed.

Recommendations

1. Continue work with FPInnovations to improve Alberta wood product shipment information for Japan and the rest of Northern Asia.
2. Attend the Japan Home Show and continue investigating the market opportunities in japan.
3. Support Alberta Agriculture and Forestry and the upcoming Japan Home Show and at a proposed seminar in Sapporo during Alberta/Hokkaido 35^th Friendship Anniversary event November 25 to 27.
4. Work with Canada Wood and BCWood on a possible BC Alberta Minister led mission to Japan and China late November

Mount Fuji at Sunset from Park Hotel

March 2-6 Nikkei Architectural Forum and Show. Alberta Night Reception

Dates

March 3-6,2015

Venue

Tokyo Big Sight, East Hall (3-10-1 Ariake,Koto-ku,Tokyo)

Range of Exhibits

<General Construction Materials and Related Products Zone>

1. Interior / Exterior decorative materials Plywood and Fiber boards, Decorated plywood, Wall and Ceiling covering, Tiles / Stone, Bricks, Metallic and Ceramic siding, Curtain walls, Glass, Interior finishes, etc.
2. Flooring Tiles, Flooring, Barrier-free and OA flooring, Deck plates, Floor heating, Coated flooring, Flooring materials, Tatami mats, etc.
3. Roofing / Ceilings Metallic and Slate roofing, Roofing tiles, Rain chutes, Crest tables, Roofing materials, etc.
4. Doors and Opening parts Doors, Automatic doors, Window sash, Shutters, Partitions, Stairs, Handrails, Grilles, etc.
5. Supplementary materials Films, Paints, Coating materials, Adhesive / Sealant, Gaskets, Repairing materials, Architectural hardware, Screws, etc.
6. Construction materials and Functional materials Foundation/Structure support materials, Fire prevention and proofing, Acoustic absorbent / Noise reduction, Thermal insulation, Water proofing / Moisture-proof materials
7. Other materials
8. Interior Carpets, Flooring, Curtains / Blinds, Wall covering, Furniture, Other interior materials
9. Landscape/Exterior Canvas related (Canvas,Tents,Sheets,Awnings,Screens,etc.)Pavement (Pavement materials, Drainage / Grilles for roadside trees, Road marking materials, etc.), Lighting / Signs, Shelters (Gates / Walls / Fences, Outdoor shelters, etc.), Furniture (Outdoor furniture, Decorative hardware, Toilets, Bollards, etc.), Public art (Monuments, Art objects, Wall paintings, Relief, etc.), Greenery systems, Landscaping materials / Play ground equipment and other exterior materials
10. Software CAD / CG, Software for cost estimation and management, Databases, etc.
11. Design / Construction related Drawing products, Measurement machines, Tools, Construction techniques, Home repair / improvement systems, Prefabricated structures, Construction related goods and service, etc.
12. Facility equipment Air conditioning / Ventilation equipment, Water heaters, Solar heating, Kitchen Appliances, Bathroom / Bath accessories, Plumbing equipment, Elevators, Lighting, Disaster prevention equipment, Mailboxes, Home automation devices, Parking facilities, etc.
13. Energy Saving, Energy Creation and Energy Storage Materials / Facilities Heat insulating, heat shielding, well shielded material / paints, Natural ventilation system, Roof & Wall greening, Natural lighting system, Cool & Heat storage materials, Energy management system, Solar power, Fuel battery / Rechargeable battery, Others
14. Information / Publishing / Consulting / Franchise recruitment
15. Others

< House Remodeling Zone > Various building materials, equipment and software for remodeling of a detached or a multiple dwelling house, Maintenance and inspection services, Relevant information and publications, Consulting, Looking for sales agents or franchisees, etc.

< Quake Resistant, Vibration Control and Base isolation Zone > Quake resistant materials and Reinforce member, Vibration Control and Base isolation system and method, Earthquake countermeasure facilities and service, etc.

< Photocatalytic Products Zone > Various architecture-related products using photocatalytic technology

< Domestic Lumber Zone > Various architectural materials using domestic lumber, Kitchen, Bathro

The Nikkei Messe is one of Asia’s largest events with the emphasis on energy efficient, ecological friendly technologies to achieve environmentally friendly urban design and construction. There were about 1200 exhibitors. Show participants include architects, designers and builders as well as representatives of international and local Japanese governments.

AFPA Booth and Big Site Evening Light Show

Excerpt from Dalibor Houdek’s  FPInnovations Report

In the zone of living with wood, there was number of wood flooring manufacturers and wood accents such as fighting shades made of wood, wooden furniture. There was also couple of manufacturers showing light weight panels (corrugated wood) for manufacture of furniture and interior applications.

On the Building with Wood applications zone, not surprisingly, the majority of the exhibitors were showcasing structural systems that reinforce the wood construction in case of an earthquake of offered competitive steel solutions for shear walls. The focus appeared to be on how to ensure performance of the shear walls for repeated earthquake occurrences. This seems very important as places like Japan have very seismically active environment and it is important for the buildings to maintain their structural performance and integrity in repeated earthquake events without major structural repairs following the earthquake. Japan has developed many systems that support wood structures as well and other building systems to perform well in earthquake situations.

Japan Home Show Posted by Jim Ivanoff BCWood japan

This year’s show was held from March 3 through 6 and we once again had a strong group of members and Canada Wood partners in the BC Wood organized Canadian pavilion. The products showcased ranged from structural lumber and engineered wood to finishing materials, furniture, and log home packages. We maintained our WRC inspired central reception display, which featured traditional Japanese wood connection, art created by the famous Japanese designer Hiroyuki Takamura. This space always draws in show visitors both with its visual as well as aromatic appeal.

The power of the Nikkei Newspaper brand and organization always ensures that this will be a well-attended show. This year saw a 2% increase in visitors for a total of 210,610 over the four days. It is important to note that this show is for industry professionals only so the attendance is not inflated by consumers. The show is very popular with architects and designers and in particular those involved with commercial and retail space design. We were not only happy to see the increase in attendance, but also the improvement in the mood of the attendees. At last year’s show, the impending tax increase was on everyone’s minds, but this year people were looking forward to renewed growth as the immediate effects of the tax increase have receded.

For the 2014 GBM, we worked very closely with Japan’s CLT Association to put on the Wood First tour. Based on the success of that collaboration, we once again partnered with them to put on a CLT seminar at the Canadian Embassy in Tokyo on the first night of the Nikkei Show.

The speakers included a Japanese engineer who explained to the audience the buildings we had visited on the GBM 2014 tour as well as Colin Chornohus of Structurlam Products who talked about the newly built Wood Innovation and Design Centre in Prince George. Colin’s presentation was highly anticipated by the audience of 170 architects, engineers, general contractors, and importers. While we and our Canadian partners were extremely pleased with this very large turnout of key influencers in the Japanese large-scale wood building market, the Japan CLT Association was ecstatic with this tremendous profile that we were able to give to the emerging CLT market. It is clear that due to seismic and fire concerns, CLT is the future of large-scale wood buildings in Japan and through such collaborative efforts BC Wood is helping to move this forward.Dan Wilkinson, on behalf of Alberta ESRD and the AFPA, led off the seminar with an overview of Alberta’s forest industry and products

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March 3 2-5 pm Meeting Alberta Trade Office

Prior to the Canadian seminar met with Alberta Trade Office Managing Director Mr. David Anderson, Kaori Umemoto, Commercial Officer, Shinichi Tsujioi Trade Commissioner. We discussed the general situation in Japan and its relation to Canada and Alberta in term of trade focusing predominantly on wood products and building systems. 2015 is also a year that marks 35 years of Hokkaido – Alberta cooperation as sister provinces. There is a series of events under consideration including activities related to forest industry and building products. Hokkaido has a large wood industry and wood building culture with 30% of buildings in Hokkaido made of wood (Japan’s average is 10%).

The tentative timing for the Alberta Hokkaido event is November 25-27, 2015 following Japan Home Show on November 16-20. Executing an event will require resources and with New Elections in Alberta and the shrinking budget, further planning will need to be done once there is more financial certainty in 2015/2016 fiscal year. Further discussions with ESRD are required as they were not able to travel to japan this trip.

Potential seminar topics include: 1)How to make wood buildings last? (Japan’s wood construction typically only lasts about 25 years).2)Energy efficiency of wood buildings (hi interest to Japan the first Net Zero home in Japan was built in 2010). 3)Tall buildings out of wood (Japan has a dense population so taller multifamily buildings are of interest).

At subsequent discussions held in Hokkaido with 2×4 builders association, there was interest in exchanging information on forestry and forest management practices. Hokkaido is one of the major commercial natural timber areas in Japan.

Site Visit Shingu Shoko http://www.shingu-shoko.co.jp/english/ Mr. Kazuji Abe, General Manager and Mr. Manabu Kawamura, Building Material Section Manager Provided intro about AFPA, FPI and Alberta forest industry.

SSL is currently purchasing some Alberta lumber (High Prairie Forest Products (West Fraser) and Millar Western via lnterex FP). SSL visited Alberta about 7-8 years ago (met with Buchanan Lumber at the time). SSL have several divisions including Tokyo, Osaka plus wood division in Sapporo. #1 importer of hardwood in Japan (from US). Within Sapporo division the main activity is products distribution to builders and wall panel producers throughout Hokkaido (also Supply to DAITO largest rental housing builder in Japan). 70% of product volume include SPF, OSB and plywood.$80M/year business and about $30M is represents softwood plywood from Tokyo. Three months ago, SSL established its own panel plant. In addition to distributing lumber of other wood products, SSL also distributed small forestry equipment (e.g. chainsaws), wood stoves, finishes and stains.Also import thermally modified wood (pine from Europe and ash from US). The prices for thermally modified wood are lower that is they were importing naturally durable wood specie such as IPE.They also supply small volume to window sector in Japan. However, most windows are aluminum followed by vinyl with very little wood windows on the market.

Meeting with Johnson Homes (JH) Otani Shu

 

Hokkaido builder with production of 250-300 homes/year (SO homes 2×4 style from Canadian lumber the rest is traditional post and beam made of European glulam made to Japanese specs). Johnson Homes is a subsidiary of housing Yamachi. Yamachi procures and distributes wood products to the Johnson Home factories.

JH operates a panel plant in Hokkaido and belongs to a group (partner in Hiroshima KIPRO) that produces total of 600 homes.

Used to import windows from Edmonton but now they buy them in Winnipeg.

Also purchase vinyl window extrusions from Quebec and some fibreglass windows.

JH is always on a lookout for contemporary building products that enhance appearance.

Also interested in fire resistant siding. Used cement board Certiguarded Cedar (cedar with fire retardant).

JH buys ISOVER insulation from Toronto and they also use spray foam polyurethane insulation.

The company focus is single family residential construction but they also have interest in daycare centres, lifestyle buildings and senior wellness.

Based on the feedback from JH’s 30 franchisees they expect the 2×4 market to remain flat.

Housing Yamachi Co. Lt.

Company Profile

Sector: Materials

Industry: Construction Materials

Sub-Industry: Wood Building Materials

Housing Yamachi Co,Ltd. was founded in 1996. The Company’s line of business includes distributing lumber, plywood, and millwork.

Currently the Japanese lumber market is sluggish however the housing market for 2015 shows signs of improvement compared to 2014.

Japans population is decreasing and aging. The population in Japan is predicted to be less than 87million by 2060 (currently it sits above 127M.)

Meeting with Showa Lumber Corp. (SLC}

Mr. Hironori Takahashi

SLC operates wall panel plant producing 5-8 2×4 homes per month plus traditional precut Post and Beam packages approximately 90-100/month.

Also make packages for commercial non-residential construction as the non-re construction market for wood is growing. However, on public buildings in Hokkaido, the builders are required to use locally grown wood (larch and Hokkaido spruce). The Hokkaido grown timber is better than the wood from other parts of Japan. The larch that is used for studs splits easily when nailed.

For HLC now the residential construction represents 20% of their production (post and beam) using European glulam in Japanese sizes.

Purchase lumber from Tolko, Weyco, West Fraser and other large suppliers and OSB from Ainsworth

 

 Mr. Hironori Takahashi

Housing packages pre-cut and packaged to deliver to house site. Use CNC technology for post and beam assemblies.

 Meeting with lwakura Corporation (IC)

Mr. Kunihiko Takenaka, General Manager ,Mitsuo Hasui Executive Director

IC operates a panel plant produces about 300 units with 34 employees in the panel plant, consuming 10,000 m3/year. They purchase 95% of their OSB from Ainsworth. The plant runs at capacity from April to December but the first quarter of the year it only runs at 50% capacity (single shift). At one point used to run two shifts producing 450 units but the market slowed down for single family homes.

Aside from their panel plant, they build and manage a number of commercial properties, they produce MDF board for resale, produce and provide a large assortment of interior finishing and building accessories.

They have side businesses in landscaping, wood pellet production and log and timber import and distribution.

Like many companies they maintain a woodlands department and harvest and reforest company forests in the region.

Now are building 23 apartments which they manage as rentals.

Over last year, 32,000 units were built in Hokkaido Prefecture but IC sees that the market for 2×4 construction is shrinking.

2×4 type home has to be built to a standard that requires defined performance however for traditional post and beam structure does not have meet any particular standard.

Japanese government put lots of effort into CLT development using local wood but it is very expensive about 6 times the conventional structural system.

The concern for the wood construction sector going forward is that when Chinese markets picks up the price of J-Grade will go up considerably.

Some government incentives are linked to use of domestic wood and that excludes wood importers to participate in these projects.

 Snowmeggedon (on site visits around Sapporo. Stranded as flights cancelled for a full day)

The Canada Wood Group

Japan Economy, Housing & Lumber Shipments

By Shawn Lawlor

Director, Canada Wood Japan

June 5, 2015

Posted in: Japan, Market News

Japan’s Economy Posting Moderate Recovery & Household Savings Top Record

Exceeding analyst expectations, the Japanese economy registered an annualized growth rate of 2.4% between January and March 2015. The positive news pushed the Nikkei 225 Index to its highest level since April of 2000. The increase marks the second straight quarter of growth. The turnaround in the Japanese equity market since Prime Minister Shinzo Abe came to power has dramatically helped increase average household wealth. The average household savings for a family unit of 2 or more people increased to a high of 17.98 million yen or the approximate of CAD $180,000.

Japan Housing Starts Summary 

March 2015

For the first time in 13 months, total Japanese housing starts registered into positive territory. Total housing starts edged up 0.7% to finish at 69,887 units. Total wooden starts increased 3.7% to 38,252 units.

By construction method post and beam starts finished 4.1% higher at 28,239 units, wooden pre-fabricated housing declined 6.6% to 1,077 units and platform frame starts posted a 3.8% gain to end at 8,936 units. Within 2×4 starts owner occupied units increased 5.6% to 2,386 units, built for sale spec homes increased 10% to 1,155 units and rentals increased 1.9% to 5,390 units.

B.C. Softwood Exports to Japan

March B.C. softwood exports Japan totaled 202,712m3 compared to year prior results of 71,600m3. (Note the March 2014 results were impacted by the Vancouver truckers strike) Year to date through until the end of March, BC Softwood exports totaled 508,651m3 for a value of $178.6 million compared to shipments of 418,523m3 and a value of $148 million in Q1 2014. Year to date SPF shipments totaled 339,346m3 for $101.4 million compared to 246,332m3 and a value of $70 million in 2014.

Japan 2X4 Housing Association http://www.2x4assoc.or.jp/english/ visit hyperlink for further information on the association