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Developing Infrastructure Developing Infrastructure
for Growth in Tradefor Growth in Trade
Ian de la Roche
Doing Business with ChinaMay 23-24, 2006
Vancouver, Canada
“Research for the Wood Products Industry”
•• Global TrendsGlobal Trends•• Research Needs and OpportunitiesResearch Needs and Opportunities•• Growing the PieGrowing the Pie•• Developing InfrastructureDeveloping Infrastructure
Outline of PresentationOutline of Presentation
ForintekCanada Corp.
“Research for the Wood Products Industry”
The Changing WorldThe Changing World
““New Rules & New Business ModelsNew Rules & New Business Models””
“Research for the Wood Products Industry”
Courtesy of A. G. Raymond & Company
China as a CompetitorChina as a Competitor
US Wood Furniture Imports
Source: Global Trade Atlas
0
2
4
6
8
10
12
14
16
US Dollars
Billions
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
US Wood Furniture Imports
OtherCanadaChina
ChineseChinese--Russian BorderRussian Border
Source: Kent Weiler
RussiaRussia’’s Timber Industrys Timber IndustryAllowable vs. Actual Timber HarvestAllowable vs. Actual Timber Harvest
0100200300400500600700
85 90 92 94 96 9820
0020
02
Harvest AAC
Million cubic meters
Source: R. Taylor, WMM Feb 2003; UN/ECE
potential for production & export
“Research for the Wood Products Industry”
Global Plantation TrendsGlobal Plantation Trends
Summary of Plantation Trends (million mSummary of Plantation Trends (million m33) ) 20002000--2050 (Source, Brown 2000)2050 (Source, Brown 2000)
CountryCountry 20002000 20102010 20202020 20502050
30301818101025251010
001251251515
40402828181825252727
001501505555
62625050303042424646
33223223
??
929271716868646425253333
330330??
BrazilBrazilChileChile
IndonesiaIndonesiaNew ZealandNew Zealand
RussiaRussiaSwedenSweden
USAUSAChinaChina
“Research for the Wood Products Industry”
INFORMATION & INFORMATION & COMMUNICATIONSCOMMUNICATIONS
REVOLUTIONREVOLUTION
The Changing WorldThe Changing World
““New Rules & New Business ModelsNew Rules & New Business Models””
“Research for the Wood Products Industry”
1. Inventory1. Inventory
2. Cash Cycle2. Cash Cycle
3. Growing the Brain3. Growing the Brain•• LearningLearning•• Data salesData sales
SupplierSupplierBankBank
Technology and Supply Chain
Store
“Research for the Wood Products Industry”
... ... Business has ChangedBusiness has Changed
•• It is global.It is global.•• It is knowledgeIt is knowledge--based.based.•• It requires products with attributesIt requires products with attributes
valued by the customer.valued by the customer.
Adding Knowledge is Adding ValueAdding Knowledge is Adding Value
“Research for the Wood Products Industry”
Increasing Value Added
Compete on raw material,Compete on raw material,energy, labor, marketenergy, labor, market
access.access.
Cost MinimizingCost MinimizingR&D < 1%R&D < 1%
Compete on promotion, Compete on promotion, brandingbranding
and distribution.and distribution.
Sales MaximizingSales MaximizingR&D > 2%R&D > 2%
Performance MaximizingPerformance MaximizingR&D R&D << 10% (of Sales)10% (of Sales) Compete on R&D, Compete on R&D,
knowledge andknowledge andpeople.people.
BusinessStrategies & R&D Investment
BusinessStrategies & R&D Investment
Adapted from Binkley and Forgacs
“Research for the Wood Products Industry”
TIME
RESOURCES
GLOBAL NATURAL
IndustrialRevolution
ElectronicRevolution
Agriculture &Domestication
Hunter &Gatherer
KnowledgeRevolution
GLOBALPOPULATION
GROW
TH
“Research for the Wood Products Industry”
If you want one year of prosperity, grow If you want one year of prosperity, grow GRAIN.GRAIN.If you want ten years of prosperity, grow If you want ten years of prosperity, grow TREES.TREES.If you want 100 years of prosperity, If you want 100 years of prosperity, grow PEOPLE.grow PEOPLE.
Old Chinese ProverbOld Chinese Proverb
ForintekCanada Corp.
“Research for the Wood Products Industry”
The Power of PartnershipsThe Power of Partnerships
Winner: Veneer Drying TechniquesWinner: Veneer Drying Techniques
Forintek Canada Corp. Research TeamForintek Canada Corp. Research Team
The Changing WorldThe Changing World
““New Rules & New Business ModelsNew Rules & New Business Models””
“Research for the Wood Products Industry”
Buildings are responsible for:Buildings are responsible for:40% of the world’s consumption of energy and materials
34% of the world’s CO2 emissions
40% of the world’s solid wastein landfills
17% of the fresh waterconsumption
“Research for the Wood Products Industry”
Steel-frameSteel-frame Insulated concrete formInsulated concrete form
Wood-frameWood-frame
How Do These Materials Compare?How Do These Materials Compare?
“Research for the Wood Products Industry”
xxxxEmbodied Embodied
EnergyEnergyGlobalGlobal
warmingwarmingPotentialPotential
AirAirToxicityToxicity
WaterWaterToxicityToxicity
WeightedWeightedResourceResource
UseUse
SolidSolidwastewaste
Wood DesignSteel DesignConcrete Design
Comparing Comparing wood, steel wood, steel and concrete and concrete in a typical in a typical house design:house design:
The Real Measure of The Real Measure of Environmental ImpactEnvironmental Impact
“Research for the Wood Products Industry”
•• Softest environmental footprint.Softest environmental footprint.
•• Renewable Renewable -- a cut tree can be grown again.a cut tree can be grown again.
•• Grown with solar energy.Grown with solar energy.
•• Absorbs carbon dioxide while growing.Absorbs carbon dioxide while growing.
•• Traps carbon dioxide until burned or decays.Traps carbon dioxide until burned or decays.
•• Recyclable and biodegradable.Recyclable and biodegradable.
•• Minimally and cleanly processed into lumber.Minimally and cleanly processed into lumber.
•• Better insulator than concrete and steel.Better insulator than concrete and steel.
The Wood Environmental ScorecardThe Wood Environmental Scorecard
“Research for the Wood Products Industry”
To a Sustainable FutureTo a Sustainable Future
Sustainable Forestry
Environmentally Friendly Construction
Energy Self Sufficient Manufacturing
Renewal Energy
“Research for the Wood Products Industry”
Increasing Demand for WoodIncreasing Demand for Wood
Maintaining existing markets and growing new markets
“Research for the Wood Products Industry”
A lot of eggs in one basket: US residential constructionA lot of eggs in one basket: US residential construction
90% of all lumber exports
US and Canada Residential:
Already saturated. Nowhere to go but down.
Termites, rot, fire, hurricanes, insurance, volatile lumber prices = more concrete. Steel also nudging up.
Non-Residential Buildings:
Almost as big a market as residential, but hardly tapped by wood.
Sources: US Census Bureau, Statistics Canada, WPC/FS 2005
New Construction, 2003 - US and Canada
0
0.2
0.4
0.6
0.8
1
1.2
Construction value
Wood volume
ResidentialNon- Residential
Target growth
Up to 6 billion board feet more lumber
Population Growth by 2030: an additional 3 billion people will need shelter. This translates into 96,150 units per day.
If 20% were wood frame and extremely modest in size, this would translate into 18 billion BF of lumber and 7 billion ft² of panel products.
Population Growth by 2030: an additional 3 billion people will need shelter. This translates into 96,150 units per day.
If 20% were wood frame and extremely modest in size, this would translate into 18 billion BF of lumber and 7 billion ft² of panel products.
Sustainable Shelter Solutions
Source: Global Report on Human Settlements 2005
Sustainable Shelter SolutionsSustainable Shelter Solutions
The Old China The New ChinaThe Old China The New China
The New ChinaThe New China
• Housing investments to grow by 7% annually
• China will build ~ 500M m2 of residential housing each year over the next 20 years
• Potential for wood in single and multi-family construction???
“Research for the Wood Products Industry”
“Research for the Wood Products Industry”
“““Research for the Wood Products Industry”
Platform Frame Technology Platform Frame Technology
Evolution Toward Mixed Systems(Steel / Concrete / Wood)
Evolution Toward Mixed Systems(Steel / Concrete / Wood)
“Research for the Wood Products Industry”
8 1992
2-level under groundparking
4-storey steel-concretecommercial & retail
4-storey wood frameliving units withsprinkler and fire-retardant exterior walls
142 apartmentsAMC 16 theater37400 SF retail shops & restaurantsSimilar project across the street
“Research for the Wood Products Industry”
Pine Square/Pacific CourtPine Square/Pacific CourtLong Beach CALong Beach CA
Vancouver:Roof in Multi-Storey Building
Shanghai: Attic Storey
Stockholm: Wood Top-Storey on Concrete Building
Scotland: Roof of an old church. It made sense then, it makes sense now.
WoodWood’’s high strength to weight ratio makess high strength to weight ratio makesit very suitable for roof applicationsit very suitable for roof applications
Research to Ensure Performanceof Building Systems and Assemblies
Research to Ensure PerformanceResearch to Ensure Performanceof Building Systems and Assembliesof Building Systems and Assemblies
Attribute AnalysisAttribute Analysis
Structural Performance Fire SafetyDurability
“Research for the Wood Products Industry”
“Research for the Wood Products Industry”
Alaskan EarthquakeAlaskan Earthquake
Performance - SeismicPerformance - Seismic
“Research for the Wood Products Industry”
“Research for the Wood Products Industry”
Global Disasters Attract Our AttentionGlobal Disasters Attract Our Attention
August 17, 1999 Earthquake
- Turkey: 120,000+ homes
“Research for the Wood Products Industry”
Global Disasters Attract Our AttentionGlobal Disasters Attract Our Attention
September 21, 1999Earthquake
- Taiwan: 13,000+ homes
“Research for the Wood Products Industry”
Global Disasters Attract Our AttentionGlobal Disasters Attract Our Attention
October 8, 2005 Earthquake
- Pakistan: 500,000+ homes
“Research for the Wood Products Industry”
Global Disasters Attract Our AttentionGlobal Disasters Attract Our Attention
“Research for the Wood Products Industry”
Global Disasters Attract Our AttentionGlobal Disasters Attract Our Attention
December 26, 2004 Earthquakes & Tsunami
- Indonesia: 100,000+ homes- Sri Lanka: 50,000 +- Thailand: 3,800
A ready client with funds and motivation:International aid agencies.
Big market demand: 1 million homes each year lost to natural disasters.
“Research for the Wood Products Industry”
September 2005 Wood SeminarsSeptember 2005 Wood Seminars
Seminar in Banda Aceh“Research for the Wood Products Industry”
September 2005 Wood SeminarsSeptember 2005 Wood Seminars
“Research for the Wood Products Industry”
Seminar in Jakarta
“Research for the Wood Products Industry”
Meeting with President &
Residents of Labui Village
Dialogue at Village LevelDialogue at Village Level
• Security of supply• Sustainable forestry• Engineering expertise• Proven safety and durability• Quick and easy to build• Easy to modify
Ready-to-assemble, Canadian-branded house kits.
Pre-cut, pre-treat and possibly panelize in Canada. Ship as a ready-to-assemble kit.
Demonstration ConstructionDemonstration Construction
“Research for the Wood Products Industry”
Indonesia: springboard to a huge global market.
Vision
“Meeting a global need for shelters that are safe, affordable,
attractive, healthy and environmentally friendly.”
“Growing the Pie in Wood Growing the Pie in Wood ConstructionConstruction””
“Research for the Wood Products Industry”
A Balanced, Multi-path Strategy
“Research for the Wood Products Industry”
But how?But how?
Industry-led promotionMarket intelligence Applied research Regulatory advocacyEnd-user assistance
“Research for the Wood Products Industry”
Thank you for your attentionQUESTIONS?
Thank you for your attentionQUESTIONS?