February 18, 2011
by Purchasing b2b staff
OTTAWA: Driven by demand from China, lumber producers in Western Canada are making money despite the slow recovery in the US housing market.
Hank Ketcham, CEO of West Fraser Timber Co Ltd, estimated the Vancouver-based company shipped 20 to 30 percent more construction lumber to China in the last three months of last year compared with earlier in 2010.
“The Chinese market continues to grow and our shipments to this important market are growing with the market,” said Ketcham.
Ketcham said about 32 percent of the company’s shipments of SPF lumber (spruce, pine and fir softwoods) ended up in Asia, with about 70 percent of that going to China. Salman Partners analyst Mike Richmond said much of what is shipped to China is used to make other wood products and in the construction industry for concrete forms.
“We started a quite a low base, but we’re seeing a quite substantial ramp up in this market here,” he said.
Richmond said wood buildings in the 2008 Sichuan earthquake in China held up better than most, prompting many to reconsider wood as a building material.
The growth in China comes as the U.S. recovery crawls along and the outlook for new housing construction south of the border remains dim after two of the worst years in the industry’s history.