Wood exporters woo China

By CHRIS DANIELS forestry writer

Timber exporters are gearing up for a concerted push into eastern China, beginning with the dispatch of a top-level trade delegation to Shanghai next month.

The 20-strong delegation, representing 15 sawmilling and wood processing companies, will travel to the eastern Chinese cities of Shanghai and Ningbo as part of a Trade New Zealand-inspired move to open the Chinese domestic market to our pine.

Trade NZ sector manager Stuart McGeorge said New Zealand timber had for a long time been sent to southern China, where it was mainly used by local exporters.

New Zealand timber was used to make such things as furniture and kitchenware, which was then exported to places such as the United States, Japan, Europe and the Pacific.

Trade NZ is now trying to help timber companies sell into eastern China, where the wood will be used by companies making products to sell in China itself.

There are problems, however, with the Chinese attitude to pine, and these need to be addressed before New Zealand timber is better accepted.

Mr McGeorge said pine grown in China was not always of a good quality, so one aim of next month's trade mission would be to convince some of the top furniture and construction companies that New Zealand pine was good for more than just making boxes.

Fletcher Challenge Forests executives Adrian Gray and Kevin Rose, who will join the trade mission, say recent years of rapid economic growth in China mean big opportunities for the New Zealand forestry industry.

Fletcher Challenge Forests exports logs and processed timber to China.

"It's really expanding the geographic area that wood products from New Zealand are used in," said Mr Gray, Fletcher's general manager for Japan and Asia Consumer Solutions.

He said that as the amount of wood coming from New Zealand increased, a larger market could be supplied.

Mr Rose, Fletcher's manager of Asian lumber sales and market development, said the Chinese "have a real affinity for solid wood".

Several factors were now pushing the rapid expansion in the Chinese market, he said.

One was the ban on domestic logging, in part prompted by recent disastrous flooding in the Yangtze Valley. Another was the increasing development of the banking and home finance sector in the communist nation.

"Now, with the advent of mortgage mechanisms from the banks and loan facilities, people are buying their houses as opposed to having them allocated by the state," said Mr Rose.

"The housing market is developing rapid-fire in China, so this is increasing the demand for making their living conditions more appealing."

Wall panelling, furniture, kitchen cabinets and flooring products, once unaffordable, have become attractive to Chinese people who now own their homes.

Environmental certification of New Zealand's sustainable forests is also a big attraction to the Chinese timber buyer. An endorsement from a third party makes it easier for the wood to be re-exported as furniture to countries such as the United States, and is also becoming increasingly important for Chinese domestic consumers.

"As affluence increases, there is increasingly also an understanding that environmental elements are important," said Mr Gray

Mr McGeorge said two New Zealand seminars next month, in Shanghai and Ningbo, would be also used to educate some of the big Chinese furniture makers about the quality of New Zealand pine.

The chairman of the New Zealand Pine Exporting Companies Asia group, Bill Giller, said rapid economic progress in eastern China had presented great new opportunities for New Zealand timber exporters.

He said the big furniture makers in that part of China were perfect for receiving mid-grade timber exports.

Low-grade wood is exported as logs, while high-grade wood is sent overseas as finished timber. When it comes to the wood in the middle, however, an exporter needs to find a company with cheap labour to work it up into furniture.

"While we are experienced exporters into China, very few of our products are ending up in their domestic market," said Mr Giller.

Peter Crichton, the general manager of Nelson-based SouthPine, one of the sawmills that forms part of the large McAlpine group, said one of the biggest challenges for the trade mission to China was to convince buyers of the versatility of New Zealand wood.