www.americanhardwood.org www.americanhardwood.org www.ahec.org www.ahec.org Penetrating Penetrating International Markets International Markets Michael Snow Michael Snow American Hardwood Export Council American Hardwood Export Council May 2010 May 2010
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Penetrating International Markets - Northern Forest...Wood & furniture factories in VN: 2,000 companies; 600 export furniture factories to 120 markets Foreign investment: 200 FDI companies
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Penetrating Penetrating International MarketsInternational Markets
Michael Snow Michael Snow American Hardwood Export CouncilAmerican Hardwood Export Council
May 2010May 2010
AHECAHEC’’ss Global ReachGlobal ReachLondon
Washington, DC
Mexico City Hong KongShanghai
KoreaOsaka
Singapore
India
Brazil
ItalySSpain
Germany
OutlineOutline
Why Export?Why Export? Risks and ChallengesRisks and ChallengesWhere are the current and potential Where are the current and potential
markets?markets?What are our strongest marketing What are our strongest marketing
messages?messages?
Why Export?Why Export?
GlobalizationGlobalization––Manufacturing is GlobalManufacturing is Global––Consumption is GlobalConsumption is Global––Consumption of Wood products Consumption of Wood products increasing fastest outside of USincreasing fastest outside of US
Global Trade for Wood Products Down 31%Global Trade for Wood Products Down 31%
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Bill
ions
Oct-DecJan-Sept
Source: Global Trade Atlas
Global Trade for Wooden Furniture Down 22%Global Trade for Wooden Furniture Down 22%
$0
$5
$10
$15
$20
$25
$30
$35
$40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Bill
ions
Oct-DecJan-Sept
Source: Global Trade Atlas
U.S. Hardwood ExportsU.S. Hardwood Exports 19881988--20092009
$ Million
Growing Importance of US Hardwood Growing Importance of US Hardwood Exports:Exports:
Exports as a % of US ProductionExports as a % of US Production
Source: Hardwood Review, Source: Hardwood Review,
New Markets: Middle East (Dubai 1990)New Markets: Middle East (Dubai 1990)
New Markets: Dubai (2007)New Markets: Dubai (2007)
China Furniture Production & China Furniture Production & ExportsExports
Billion
USD
•China National Furniture Association
The Worst of TimesThe Worst of Times………………‐54% ‐47% ‐40% ‐34% ‐27% ‐20% ‐13% ‐7% 0%
Live Animals & Products
Fruit/Vegs
Cereals and Oilseeds
Animal/Vegetable Fats & Oils
Prepared Food
Petroleum & Other Mineral Products
Chemical & Allied Industry Products
Plastics, Rubber & Articles Thereof
Hides & Skins, Leather
Wood, Pulp & Other Fibrous Materials
Textile & Textile Articles
Jewelry & Precious Metals
Base Metals Including Iron, Steel & Copper
Machinery, Appliances & Electrical Equipment
Transportation Including Cars, Trains, Airplanes
Optical, Clock, & Musical Equipment
Furniture & Toys
Miscellaneous
Source: Global Trade Atlas
Risks and ChallengesRisks and Challenges
Will I get paid?Will I get paid?
What paperwork do I need?What paperwork do I need?–– PhytosanitaryPhytosanitary Certificates?Certificates?–– ““LegalityLegality”” requirements/traceability?requirements/traceability?–– Shipping documentationShipping documentation
Transportation costs/availability of Transportation costs/availability of containers.containers.
Some require wood to be Some require wood to be verified "legal and verified "legal and sustainable" sustainable" –– Netherlands, UK, Germany, Netherlands, UK, Germany,
BelgiumBelgium
Others more flexible Others more flexible allowing a range of allowing a range of evidence evidence –– Japan, France, Spain, Italy, Japan, France, Spain, Italy,
Norway, ChinaNorway, China
Green Building Rating Green Building Rating Systems: Systems:
American hardwoods have flown American hardwoods have flown the flag for in export markets for the flag for in export markets for
over one hundred years :over one hundred years :
One British importer has an original invoice for One British importer has an original invoice for American white oak dated 1898American white oak dated 1898
A A ““stained mahoganystained mahogany”” fire surround removed fire surround removed from a 1930s Edwardian style room in from a 1930s Edwardian style room in Buckingham Palace was found to be Yellow Buckingham Palace was found to be Yellow PoplarPoplar
The Victorian organ casing in St MartinThe Victorian organ casing in St Martin--inin--thethe-- Fields church in London was American red oak.Fields church in London was American red oak.
World Hardwoods 2008World Hardwoods 2008
Source: Global Trade Atlas
WorldWorld’’s Leading Hardwood s Leading Hardwood Lumber Exporters: 2008Lumber Exporters: 2008
US Hardwood Lumber Exports by Value 2009
Source: US Census Bureau
($1,000)
US Hardwood Lumber Exports by Volume 2009 (m3)
Source: US Census Bureau
World Hardwoods 2008World Hardwoods 2008
Demand DriversDemand Drivers
Housing Housing PrivatizationPrivatization
Commercial Commercial ConstructionConstruction
Rising consumer Rising consumer wealth and wealth and sophistication;sophistication; • Domestic and export oriented
manufacturing in furniture and interior fittings sectors;
• Hospitality industry – 2008 Beijing Olympics/2010 Asian Games in Guangzhou/2010 World’s Fair Shanghai
3650
726
574
566.6
543
374.1
237.4
222.1
100.6
100
0 500 1000 1500 2000 2500 3000 3500 4000
Guangdong
Zhejiang
Fujian
Jiangsu
Shanghai
Shandong
Tianjin
Liaoning
Beijing
Others
Greater China: Furniture SectorChinese Furniture Export by Province 2008
(Million US$)
Prov
ince
Guangdong province accountsFor over 50% of China furniture exports.
China Accounted for 20% of Global China Accounted for 20% of Global Economic Growth 2000Economic Growth 2000--20092009
Largest Automobile Market in the World Largest Automobile Market in the World
Largest Mobile Phone Market in the World Largest Mobile Phone Market in the World
Estimated 15% of Population with Estimated 15% of Population with ““Middle Middle ClassClass”” Purchasing Power. Represents 200 Purchasing Power. Represents 200 million consumers and growing! million consumers and growing!
Chinese Domestic Market
AHEC Model Home: ShanghaiAHEC Model Home: Shanghai
Per Capita Wood ConsumptionPer Capita Wood Consumption
0
0.2
0.4
0.6
0.8
1
1.2
1.4
China World OECD USAIn cubic meters per capitaIn cubic meters per capitaSource: China Timber Import Export Co/Source: China Timber Import Export Co/Hardwoodmarkets.comHardwoodmarkets.com 20052005
China Domestic Timber Output China Domestic Timber Output Under NFCP Under NFCP
Source: China Timber Import Export Source: China Timber Import Export
Other Markets to WatchOther Markets to Watch
Southeast Asia/VietnamSoutheast Asia/VietnamMiddle EastMiddle East Latin AmericaLatin America IndiaIndia
NonNon--tropical forests are the main source of tropical forests are the main source of timber and are increasing in sizetimber and are increasing in size
Proportion of internationally traded industrial roundwood by forest type
Tropical
Non-tropical
A fence to the sun and backA fence to the sun and back……
During the 1990s, volume During the 1990s, volume of wood standing in of wood standing in temperate and boreal temperate and boreal forests increased by forests increased by 21,000 million m3. 21,000 million m3.
ThatThat’’s enough wood to s enough wood to build a 1m x 8cm fence to build a 1m x 8cm fence to the sun and back (or the sun and back (or 7500 times round the 7500 times round the earth)earth)
38 million houses a year38 million houses a year……..
Between 2000 and 2005, Between 2000 and 2005, volume of wood standing volume of wood standing in temperate and boreal in temperate and boreal forests increased by 884 forests increased by 884 million m3 per yearmillion m3 per year
Enough to build 38 million Enough to build 38 million two storey timber frame two storey timber frame houses every year houses every year (assumes 50% (assumes 50% conversion & 11 m3 per conversion & 11 m3 per house)house)
Global housing starts = Global housing starts = approx 36 million/approx 36 million/annann..
American hardwood forestsAmerican hardwood forests
0
50
100
150
200
250
300
350
1952 1962 1970 1976 1986 1996 2006
Net Growth Removals
0
2
4
6
8
10
12
1953 1977 1987 1997 2007
Private National Forests State & Local
US hardwood inventory (billion m3)
US hardwood growth and removals (million m3)
•
Selective harvesting and natural regeneratio n lead to biodiversity
High species diversityHigh species diversity
0% 5% 10% 15% 20%
Red OaksWhite OaksSoft MapleOther HardwoodsYellow PoplarHard MapleHickorySweetgumAshCottonwood & AspenTupelo & Black GumBlack CherryBeechRed AlderBasswoodYellow BirchBlack Walnut
Distribution of US hardwood species by volume
Myth #2: Certification is a Myth #2: Certification is a ““saving the rainforestsaving the rainforest””
Certified forest as % of total forest Certified forest as % of total forest area, by region 2005area, by region 2005--20092009
05
1015202530354045505560
EU/EFTA North America
Oceania Other Europe and
CIS
Latin America
Africa Asia
%
2005 2006 2007 2008 2009
Resources for ExportersResources for Exporters
USDA Foreign Agricultural Service (FAS)USDA Foreign Agricultural Service (FAS)–– www.fas.usda.govwww.fas.usda.gov