penetrating international markets - northern forest...wood & furniture factories in vn: 2,000...
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www.americanhardwood.orgwww.americanhardwood.orgwww.ahec.orgwww.ahec.org
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.
Board feet Board feet vsvs cubic meters?cubic meters?
Do I sell through sales staff or Do I sell through sales staff or import agent?import agent?
Finding Customers: Finding Customers: Importers/distributors Importers/distributors vsvs manufacturersmanufacturers
A Few things to ConsiderA Few things to Consider…………
Forwarder FeesForwarder Fees
Export PackagingExport Packaging
Inland FreightInland Freight
Ocean FreightOcean Freight
Port ChargesPort Charges
Export ClearanceExport Clearance
Marine InsuranceMarine Insurance
Foreign Port ChargesForeign Port Charges
Customs ClearanceCustoms Clearance
Customs DutiesCustoms Duties
Who Pays? Buyer or Seller?
Green Public Procurement: Green Public Procurement: WhatWhat’’s Required Where?s Required Where?
Some require wood to be Some require wood to be verified "legal" verified "legal" –– Denmark, New Zealand, Denmark, New Zealand,
Japan, Mexico, SwitzerlandJapan, Mexico, Switzerland
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:
Where are the Where are the Markets?Markets?
www.americanhardwood.orgwww.americanhardwood.orgwww.ahec.orgwww.ahec.org
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
**The EU** **The EU**
S.E. Asia: Market OverviewS.E. Asia: Market OverviewM
illio
n U
S$
U.S. Hardwood Log, Lumber & Veneer to U.S. Hardwood Log, Lumber & Veneer to VIETNAMVIETNAM
VIETNAMVIETNAMM
illio
n U
S$
Wood & furniture factories in VN: Wood & furniture factories in VN: 2,000 companies; 600 export 2,000 companies; 600 export furniture factories to 120 marketsfurniture factories to 120 markets
Foreign investment: 200 FDI Foreign investment: 200 FDI companies contribute approximately companies contribute approximately 56% of furniture exported. 56% of furniture exported.
Furniture manufacturer distributionFurniture manufacturer distribution
Ho Chi Minh CityHo Chi Minh City
BinhBinh DuongDuong
Dong Dong NaiNai
BinhBinh DinhDinh
DaDa NangNang
~10% in t~10% in the Northhe North
Vietnam Wood Industry Overview
Dong naiBinh duong
Mexico: Hardwood Import Mexico: Hardwood Import Market ShareMarket Share
Source: Global Trade Index
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
UAE Saudi Arabia Israel Egypt Lebanon Jordan Turkey Qatar Oman Kuwait
2007 2008
Source: USDA Foreign Agricultural Service
Top ten Middle East markets for US hardwood lumber
January to December 2008-2009 ($,000)
South AmericaSouth America
AHEC/AF&PA Korea Office September 2002
•Emerging Furniture Industries–13,000 Brazilian manufacturers–U.S. exports of promoted products doubled –Brazil—12th largest market for veneer
•Opportunity–High end furniture
INDIAINDIA
Source: World Trade Atlas
Indian Hardwood Imports:Indian Hardwood Imports: (Millions of Dollars)(Millions of Dollars)
WorldWorld’’s Leading Hardwood s Leading Hardwood Lumber Importers: 2009Lumber Importers: 2009
Source: EUROSTAT
EU Hardwood Lumber ImportsEU Hardwood Lumber Imports (Billions of Euros)(Billions of Euros)
What Else Can We What Else Can We do?do?
““Explode the MythsExplode the Myths””
www.americanhardwood.orgwww.americanhardwood.org
Myth #1: Wood is ScarceMyth #1: Wood is Scarce
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
Export Import BankExport Import Bank–– www.exim.govwww.exim.gov
Department of CommerceDepartment of Commerce–– www.usatrade.govwww.usatrade.gov
APHISAPHIS–– www.aphis.usda.govwww.aphis.usda.gov
For More Information:For More Information: www.americanhardwood.orgwww.americanhardwood.org
