November 11, 2010

By Matthew Bains 

NORTHEAST – British Columbia continues to break ground, literally and figuratively, in expanding market opportunities for BC wood in China.

Pat Bell, Minister of Forests, Mines and Lands, reported on some of the successes on Nov. 2 during a trade mission. 

 

He said the previous day marked three major events, with the most significant being a groundbreaking ceremony for a new mid-rise residential building in Tianjin, about 160 kilometres southeast of Beijing. Four of five floors of the building will be wood-framed. 

 

“It’s really the breakthrough we’ve all been looking for in terms of getting into the mid-rise housing market,” said Bell, adding that market represents about 70 per cent of housing construction in China. 

 

He said the project includes three more similar buildings on the site, and two smaller ones, and is the result of a Memorandum of Understanding the Governments of British Columbia and Canada signed with the Chinese Ministry of Housing and Urban-Rural Development. Canada will contribute design support, lumber materials, and quality assurance during construction, representing about 15 per cent of the total costs. 

 

“In the past, we’ve tended to have to provide the entire project and turn the building over,” said Bell. “In this particular case, it is only a small portion of that.”

He added Canada will provide technical expertise and quality assurance for three other projects.

 

The minister said next he visited Langfang City, located between Tainjin and Beijing, for the opening of a roof truss manufacturing facility. He said the facility has a capacity to create 400 roofs per year from structure-grade lumber, and already has orders for three months, with lumber coming from Mackenzie, BC.

The Forestry Innovation investment office in China provided a $30,000 roller press to the facility and Canada Wood Group will provide technical training to operate the press, but the local government assumes all other costs. Bell said the Province of Hebei, where Langfang City is located, has a strong wood frame construction policy, led by a vice governor who used to be the federal forests minister in China.

 

Thirdly, Bell said he took part in signing a Memorandum of Understanding with Beijing National Building Materials (BNBM) to build the first wood frame building in Chengdu, capital of Sichuan Province in the Chinese interior, as part of an earthquake reconstruction program. Canada and B.C. are sponsoring the project with design support, quality assurance, and lumber materials.
The minister said the parent company, China National Building Materials, is the largest importer of lumber from British Columbia into China. In fact, he said 

 

Canada has now surpassed Russia as the largest softwood lumber supplier to China, as of the first quarter of this fiscal year. 

 

“That is a real benchmark to see Canada move ahead and take the strongest position in the Chinese market,” he said.

 

Bell said the competitive pricing and durability of BC lumber is what will drive demand in the Chinese market going forward. He added the Chinese are very keen on reducing their carbon dioxide emissions, and see wood frame construction as being key over traditional light steel construction. 

He added there may be further opportunities for other wood products as well.

 

“Pulp is a huge opportunity, and the incremental tonnage, particularly in the tissue market here, is astronomical.”

 

He said a large percentage of BC pulp is already coming over to China, and that market is helping drive prices to record highs, and sustain solid wood manufacturing in British Columbia. He said wood pellets are a relatively new product in China, and he doesn’t expect significant imports of pellets for some time, but there may be an opportunity to convert coal-fired power plants to wood-burning ones in the future. 

 

Bell said he also met with about 40 of the largest developers in China, and was interested to learn resort home construction in China could represent a significant market opportunity going forward.