BC softwood commodity product sales in Japan
(Softwood lumber, plywood, OSB, MDF and Particleboard)
- Third largest market for B.C. wood products in volume, but preference for higher quality wood products generates higher profit margins for B.C. exporters.
- Mature over-all housing sector, but opportunities in hybrid construction and “green building”.
- Market leader with 25.9% share of softwood commodity product imports.
- 2011: 2.8 million m3 of commodity wood products valued at $745 million.
- 2012 (through September): 1.9 million m3 valued at $521 million.
Government stimulus was helping Japan’s economy recover until the massive East Japan earthquake hit in March 2011. The country’s industrial production and private demand contracted sharply after the disaster; however, the economy started to rebound in May 2011 which helped limit the year’s GDP decline to 0.9 per cent as compared to 2010. By early 2012, GDP had recovered to almost pre-earthquake levels.
Japan’s softwood lumber consumption was 15.7 million m³ in 2011, up 5.8 per cent after a similar increase in the previous year. There has been relatively little reconstruction in the areas destroyed by the tsunami, but lumber demand is expected to increase in the next two to three years. In 2011, housing starts increased by 2.6 per cent to 834,117 units. Starts in platform-frame construction increased by 2.2 per cent and its share of wooden starts increased to 21.1 per cent. Domestic production of softwood lumber grew by 5.1 per cent, to 9.2 million m³.
2011 saw little change in B.C.’s volume of softwood lumber sales to Japan. However, B.C.’s share of Japan’s total imports declined from 39.8 per cent in 2010 to 37.3 per cent, primarily due to increased imports from Europe.
Japan is a mature market for many wood products and FII continues to work with the industry to develop niche opportunities in elderly care facilities, post-and-beam and 2×4 wood-frame construction, and value-added products. On the panel side, 2011/12 saw a significant increase in short-term demand for panel products in Japan as local production capacity was negatively impacted by the earthquake and tsunami. With funding from FII and NRCan, APA – The Engineered Wood Association has been working for some years to increase acceptance of OSB relative to other panel products and this led to increases in shipments following the disaster.
While cedar and hemlock demand has sagged in the medium term due to overall economic conditions in Japan, prospects are good in the home building market, particularly as the focus shifts to high-end elderly care facilities. The B.C. industry has worked to stimulate changes in building and fire codes and standards to accommodate the use of these important coastal species. Construction guides have been completed for some products and further testing is underway for applications of cedar, hemlock and OSB to ensure B.C. maintains its position as a preferred supplier.
On the value-added front, the “Living and Building with Wood” strategy led by BC Wood Specialties Group is increasing the profile of B.C.’s high-end design-led architectural, furniture and millwork products in Japan. This effort has generated over $6 million in new sales through the related tradeshow program, in which Japanese designers and architects are encouraged to use innovative architectural and interior products.
In addition to sector and product-specific approaches, the market strategy for Japan in 2012/13 also includes delivering on the $4.5 million Canada Tohoku Reconstruction Project. This effort to build wood frame legacy projects in the tsunami disaster zone is being led by Canada Wood Group, with contributions of $2 million each from the B.C. Government and the Government of Canada, and a further $500,000 from industry.
Select Accomplishments 2011/12
- Canada Wood Group has been growing the application of 2×4 building systems as “fireproof” buildings in nonresidential segments (“fireproof” being an important distinction in the Japanese code). New approvals for 2×4 nonresidential buildings that are designated under the “fireproof” category increased by 8 per cent.
- In 2011/12 a review indicated that significant progress has been made to introduce Oriented Strand Board (OSB) into the Japanese market with 13 new cases highlighted where non-residential buildings were converted to using OSB. Demand for OSB in Japan was particularly high in 2011 (a record 300,000 m³, up from 213,000 m³ in 2010) because of softwood plywood shortages and consequent high prices following the earthquake and tsunami. B.C. exported 211,000 m³ of OSB to Japan in 2011.
- COFI’s publication of a design and builders manual enabled significant growth of 2×4 building systems in elderly care facilities in Japan. Providing tools for builders to easily incorporate wood assemblies in their plans increased the number of approvals for 2×4 elderly facilities by 14 per cent.
- Testing programs for mid-ply wall assemblies in Japan are generating significant progress in securing Japanese regulatory approvals for 2×4 mid-ply walls.
- Over 360,000 people were exposed to B.C. value-added wood promotions through B.C. Wood Specialties Group’s tradeshow program.
- Canada Wood Group trained over 900 builders, architects and specifiers to enable them to incorporate wood in their building designs wherever appropriate under the Japan building code..
Focus in 2012/13
Increasing technical work and promotion for the non-residential applications of wood-frame construction are a major focus in 2012/13. Work is continuing on mid-ply construction codes and technical research on non-residential assemblies, sheer walls and SPF lumber in post-andbeam applications. This effort is led by the Council of Forest Industries and Coast Forest Products Association. Additionally, technical guides are also underway to support adoption of new systems by builders and technicians. Production of a Canada Tsuga guide will be targeted specifically at non-residential promotion and will augment existing technical support to increase the use of hemlock in building projects. Updates to the Cedar Book and other high-end publications will help to showcase innovative use of wood in design and construction.
Inbound missions to Canada will focus on elderly care facilities and multi-unit residential housing, and will help to augment on-the-ground support provided by Canada Wood Group in Japan. These missions will expose both media and developer audiences to the leading edge application of wood technologies in B.C. and Canadian building projects, helping to address any concerns about safety or performance of these products in Japan. BC Wood Specialties Group’s value-added program will target promotions on key Japanese tradeshows (e.g., Japan Home Show, Kenzai Show and Reform Fair) to connect B.C. producers with architects and designers.
In 2012/13, Canada Wood Group is also managing the first two reconstruction efforts under the Canada Tohoku Reconstruction Project: a public library and a public market, both located in Natori, Miyagi Prefecture. Canada Wood will work to identify additional reconstruction projects early in 2013.
For access to FII-funded market research and related data for the Japan market, click here
For B.C.’s current monthly exports of softwood lumber, by species, to Japan, click here