Transcript American Hardwoods in China: Threat or Opportunity?

Global
Demand
for
US Hardwood
Exports
What is AHEC?
• The American
Hardwood Export
Council (AHEC),
founded in 1988, is an
umbrella organization
that represents U.S.
hardwood exporting
companies and major
U.S. hardwood product
trade associations.
• The purpose of AHEC is to
increase the value and
volume of U.S. value-added
hardwood exports through
overseas market
development and
promotional activities and
increase consumption of
wood worldwide.
AHEC’s Global Reach
Why Exports Matter
• Fourth largest market
for hardwood
production after pallets,
furniture, and
dimension/components
• Absorbs approximately
9% of production by
volume, but over 14%
by value
This gap is widening. Since 1983, exports of value-added
hardwood products have increased an average of 6.4%
by volume and 10.1% by value per annum.
U.S. Hardwood Exports
1986-2002
$ Million
3000
2500
AHEC
Formed
2000
1500
1000
500
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Logs & Chips
Value-Added
Top 10 Markets for Hardwood
Lumber: 1990 & 2002
2002
1990
Belg./Lux.
France
Taiwan
11%
5%
10%
Neth.
4%
Germany
8%
Italy
10%
Japan
27%
UK
14%
Source: USDA
Spain
6%
Mexico
5%
Mexico
13%
Italy
13%
Germany
3%
Spain
14%
Taiwan
6%
Japan
7%
UK
8%
Hong Kong
18%
China
18%
Top Markets for Red Alder
Lumber: 2000-2002
12,000
(Cubic Meters)
10,000
8,000
6,000
4,000
2,000
0
China Mexico Hong
Kong
2000
Source: The World Trade Atlas
2001
Italy
2002
Taiwan Korea
Value of Hardwood Lumber
Exports to Japan
1995-2002
($ Thousand F.A.S. Value)
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
1996
Source: US Census Bureau
1997
1998
1999
2000
2001
2002
Japan Market Overview
• Until late 1990’s Japan was second largest market
for U.S. hardwood products;
• Manufacturing moved offshore, required shift in
promotional strategy;
• AHEC’s focus moved from promoting to
manufacturers and traders to specifiers (interior
designers/architects) and consumers via event
driven public relations
Japan’s Furniture Imports
400
350
300
250
200
150
100
50
0
'91
'92
'93
'94
'95
'96
'97
'98
'99
2000
Value of furniture imports (Billion yen)
Custom statistics, JapaneseMinistry
of Finance
2001
Hang Tag Promotion:
Environmental Focus
Eco-Furniture Design Contest
Value of Hardwood Lumber
Exports to Korea
1995-2002
($ Thousands F.A.S. value)
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
1996
Source: US Census Bureau
1997
1998
1999
2000
2001
2002
Market Challenges/ Opportunities
•Relocation of Manufacturing Facilities Offshore
•Emerging remodeling market segment
--Government removed “cap” on resale prices
•Price sensitive
•Untrained specifiers and designers
AHEC/AF&PA Korea Office
September 2002
US Hardwood Exports to China
• Year to year increase of nearly $34 million over 2002
• Volume of lumber exports increase more than 62%
($ Thousands FAS value)
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
1995 1996 1997 1998 1999 2000 2001 2002
China: Hardwood Import
Market Share
30
Market Share (%)
25
Indonesia
EU 15
Malaysia
US
Germany
20
15
10
5
0
1998
Source: Global Trade Index
1999
2000
2001
Top Five Lumber Species
Exported to China
($ Thousands FAS value)
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Red
Alder
Red Oak
Yellow
Poplar
Maple
White
Oak
Demand Drivers
• GDP and Population Growth
– Rising Income
• Construction
• Furniture, Architectural Woodwork and
Packaging
• Relative Price Competitiveness with Other
Materials
• Historical and Cultural Factors
– Consumer Tastes
GDP Growth
% Change from Previous Year
9
8
7
6
5
4
3
2
1
0
1997
1998
1999
China
Source: The World bank..
2000
USA
EU
2001
2002
Chinese Consumption:
Did You Know….?
• GM sold more cars in Shanghai than
any other city in 2002
• China buys more camera equipment
than Japan.
• More cell phones than the U.S.
• More televisions than France.
• More cars than Germany
Real Estate
Boom
• Housing
Privatization-1999
• “Turnkey”
Construction-2002
• Increasingly sophisticated
and wealthy consumers driving
domestic demand for higher
quality interior products.
Chinese Building Activity
Total Floor Space
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
1996
1997
1998
In Billions of cubic meters
Source: Chinese Ministry of Construction, 2001
1999
2000
2001
Quality Sample Program
Interior of model home in Shanghai outfitted with U.S. hardwoods
Quality Sample Program
Chinese Furniture Production
and Exports: 1997-2002
Billion $US
$16
$14
$12
$10
$8
$6
$4
$2
$0
1998 1999 2000 2001 2002
Production
Source: China National Furniture Association
Exports
Major Furniture Exporters:
1998-2001
$US
Billion
.
10
1998
1999
2000
2001
8
6
4
2
0
Italy
Germany Canada
Source: CSIL Milano
China
Per Capita Wood Consumption
1.4
1.2
1
0.8
0.6
0.4
0.2
0
China
World
OECD
In cubic meters per capita
Source: China Timber Import Export Co/Hardwoodmarkets.com 2001
USA
China Domestic Timber
Output Under NFCP
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1997
1998
1999
Source: China Timber Import Export Co/IFSA Consulting, 2001
2000
2003
China Timber Production from
Plantations 1995-2015
Volume (1000 Cubic Meters)
70
60
50
40
30
20
10
1995
2000
2005
Coniferous
Source: China Timber Import/Export Co., 2001
2010
Broad Leaf
2015
Chinese Timber Consumption
and Production: 2000-2010
Millions of cubic meters
250
200
150
100
50
0
2000
2010
Chinese Production
Source: China Timber Import Export
Co., 2001
Imports
US Hardwood Log Exports to
China: 1997-2002
100
90
80
70
60
50
40
30
20
10
0
(Thousands of Cubic Meters)
1996
Source: USDA-FAS
1997
1998
1999
2000
2001
2002
Other Markets to
Watch
• Southeast Asia/Vietnam
• Middle East
• Mexico
• Caribbean
• **The EU**
Hardwood Lumber Exports by Volume - 2002 (m3)
EU
Greater China
Mexico
Japan
Southeast Asia
Middle East
Korea
Non EU Europe
Oceania
Caribbean
S/C America
India
0
Source: US Census Bureau
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
US Hardwood Lumber Exports by Value
2002
EU
Greater China
Mexico
Japan
Southeast Asia
Middle East
Korea
South Africa
Non EU Europe
Oceania
Caribbean
S/C America
0
50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000
($1,000)
Source: US Census Bureau
Average Unit Values of
Hardwood Lumber Exports
2002
($ per cubic meter F.A.S. Value)
800
700
600
500
400
300
200
100
0
China
Source: US Census Bureau
Korea
UK
Japan
Italy
250
Eastern European Hardwood
Exports to European Union
(million euros)
200
150
100
50
0
1997
1998
1999
2000
2001
2002
www.sustainablehardwoods.info
www.ahec-europe.org
S.E.Asia: Market Overview
Million
US$
U.S. Hardwood Log, Lumber & Veneer
to S.E. Asia
60
50
40
30
20
10
0
1998
1999
2000
2001
2002
Log
Lumber
Veneer
US Exports to Vietnam
Million
US$
U.S. Hardwood Log, Lumber & Veneer
to Vietnam
Log
14
Lumber
12
Veneer
10
8
6
4
2
0
1998
1999
2000
2001
2002
Value of Hardwood Lumber
Imports to Mexico
1996-2002
($ Thousands F.A.S. value)
Source: US Census Bureau
US Hardwood Lumber Exports by Volume - 2002 (m3)
Under-promoted Markets
Middle East
Caribbean
Non-Eu Europe
South Africa
Vietnam
Oceania
S. & C. America
India
0
Source: US Census Bureau
10,000
20,000
30,000
40,000
50,000
60,000
For additional
information contact:
AHEC Headquarters
1111 19th Street, NW,
Suite 800
Washington, DC 20036
Phone: 202/463-2720
Fax: 202/463-2787
www.ahec.org