Paul Newman is pleased to announce that the COFI Market Access/SPF Group has been awarded $3.3 million in federal and provincial market development funding for fiscal 2005-6. Approximately $2.0 million was received from the Canada Wood Export program and $ 1.3 million from Forestry Innovation Investment Ltd. Combined with industry funds a total of $4.5 million has been allocated in 2005-6 for market development activities in Japan, China, South Korea, Taiwan and Europe.

Paul Newman
Executive Director Market Access & Trade
Chairman Canada Wood Group Ltd.

Brian Zak, Canada Wood Plant Specialist – Western Canada, has been busy since he assumed his contract with us on April 1 st . Zak will work closely with his Eastern Canadian counterpart based in Quebec City. The function is intended to provide significant attention and strategic focus on the vexing issue of phyto-sanitary barriers plus coordinate resources and allies in Canada. Zak is presently focusing on Korea, Australia and the introduction of softwood packaging measures in many countries.

Brian Zak can be reached for clarification on plant health issues and compliance at: Office: 604 536 3902 or Cell: 604 720 6379 or
email: Allforestsolutionsinc@telus.net

Canada Wood is co-sponsoring a symposium on international wood building trends hosted by the University of British Columbia's Centre for Advanced Wood Processing and Forum Holzbau to be held in Vancouver on September 14 -15 th. We will present a talk on adapting wood frame construction for hot and humid Asian climates. Full details available at: http://yellowcedar.forestry.ubc.ca/iwbfvancouver/default.aspx

John McDonald has been promoted, effective immediately, to ‘Managing Director – CWG China Operations'. Previously John's title was ‘Director – China Operations'.

With the placement of Daryl Birtch (Construction Specialist) and Eric Zhang (Training Coordinator) at Shanghai's Dream House Canada, we now have in place the core of a highly skilled and versatile team for transferring knowledge on wood frame construction to Chinese builders and developers. Daryl and Eric have been active in their first four months identifying critical quality issues and liaising with builder contacts. Short courses are planned for delivery in August and September dealing with repetitive construction mistakes and building inspector training. Plans are underway to create a network of trained inspectors working within the builder community who will fall back on our team for expertise and guidance.

We also plan to add a construction specialist position to our new Beijing office later this year. Plus we are looking at the acquisition of a mobile training unit which will allow for the delivery of applied training on the construction site at outreach locations.

Detailed planning is well underway on the joint development of a local building code for wood construction in Shanghai. Following the consummation of an MOU between the Shanghai Municipal Construction and Management Commission (SMCMC) and Canada Wood in January, Paul Newman and Dr. Carl Wilson have been devising a process framework which will identify key issues and develop appropriate technical solutions. This approach was endorsed by senior SMCMC officials during their visit to Vancouver in July. Next steps include the formation of task groups comprised of expert building professionals from Canada and China.

Canada Wood has been working hard over the last two years to develop strong connections with the Chinese Ministry of Public Security (MPS) Fire Bureau. This work has paid off with an agreement in principle with MPS Tianjin Fire Research Institute to undertake a comprehensive assessment of Chinese fire regulations as compared to those in effect in wood using countries in North America and Europe. The intent is to work with the MPS to build confidence in the performance of wood construction from a fire safety perspective. Canada Wood will be partnering with European and American organizations in this multi-country effort. Canada's best fire researchers have enlisted to assist in this initiative. We hope that this could ultimately lever open markets for hybrid and larger height/area structures. The first meeting of the joint technical committee is scheduled for September in Beijing.

In concert with the public relations firm Edelman PR Canada Wood has pursued an active media campaign since November 2004. Since starting we have generated over 60 articles in the Chinese press and three television interviews. Both John Allan and Paul Newman have appeared on Chinese television promoting the use of Canadian wood products. It is estimated that we have created over 3.5 million media contacts during the campaign. We have a schedule of media roll-outs planned over the balance of this fiscal year.

We are pleased to announce the hiring of Barry Reimche who will be working as a Contstruction Specialist out of our newly opened Beijing Office. Barry has over 17 years of experience in the wood frame construction industry and has applied his expertise in Canada as well as Japan, Korea and Taiwan. Barry's other qualifications include:

• Certificate of Qualification - B.C. Building Code Level One
  
• Owner of a Canadian construction company that specializes in woodframe and concrete/wood/steel hybrid buildings
  
• Working knowledge of the techniques used to counter the affects of typhoons, earthquakes, and termites
  

In addition to the fire and Shanghai local code projects, Canada Wood is undertaking two other applied research projects this year to help establish strong credentials for wood frame construction in China. A contract for Phase II of an energy efficiency study will be assigned shortly. This project aims to calculate the environmental impact of different building systems used in China and contrasts to wood construction. Phase I included an overview of the energy challenges facing China and government policy responses as well as a comparative assessment of the operating energy requirements of wood versus steel and concrete for single family construction. Phase II will study more complex structures for multi-family residences and consider the embodied energy cost of building materials so a more complete lifecycle assessment can be made. Hard copies of the Phase I energy efficiency study can be obtained by contacting COFI.

A major disincentive to the specification of wood construction by Chinese developers relates to the absence of Chinese-based design software packages. Canada Wood has been investigating this critical gap, starting last year with a market research project which assessed the needs of Chinese designers and builders and sought to identify possible out-of-the-box solutions. An added advantage of tailored software would be the opportunity to embed Canadian material specifications and design properties. Recently we have been in discussion with potential commercial providers/partners in the development of a made-for-China product. We hope to be in a position to move forward to support development of a suitable platform shortly.

Certification and grade marking of wood products for construction use, as practiced in North America, Europe and Japan, has not been practiced in China. Establishment of the new code for timber design (GB50005), based on North American codes, has not adequately addressed this aspect of the process for regulating construction quality and safety. At the same time, the organization and operation of China's accreditation bodies for certification, testing and inspection has been restructured. Furthermore neither the Ministry of Construction nor the local regulatory authorities (e.g. Shanghai Municipal Construction Management Commission) have come to any conclusions with regard to the use of Certification or grade marks in their construction approval and enforcement processes.

Working Towards Conformity: What is Canadawood doing?

MOC proposed to the Canada Wood Group the convening of a Conformity Assessment FORUM, held on June 8th where Chinese authorities would presented on the current situation in China and Canadian parties overviewed the conformity assessment and building enforcement schemes operating in Canada. Options were discussed for the introduction of a new MOC framework for conformity assessment and compliance assurance for building materials.

Next steps:

• Complete trade-mark registration of Canadian grade-marks.
  
• Continue dialogue after FORUM. Respond to MOC and CNCA requests for training assistance for wood products certification personnel (this has already been mentioned informally).
  
• Once the new Chinese system is apparent, identity options for Canadian industry to achieve product acceptance. Review with industry in Canada.
  
• Pursue the designated options with the new certification body and/or through MOC/CNCA.

The Japan Wooden Home Association (WHA) presented the 2004 WHA Award to COFI/Canada Wood in recognition of COFI`s contribution to wooden post and beam construction in achieving official quasi-fireproof construction status. David Litchfield, Director COFI Japan Tokyo Office, is the first non-Japanese recipient of the award. The presentation took place at WHA's general annual meeting in May .

Acknowledgement was given to COFI's contribution as a member of the technical committee as well as to a series of fire tests completed resulting in recognizing post and beam construction as a qualifying quasi-fireproof construction method by the Government Housing Loan Corporation (GHLC) on March 25, 2005. This recognition under a Finance Ministry Order is deemed to be equivalent to quasi fireproof approval under the Building Standard Law. Once received, this designation enables post and beam houses to fall under the fire insurance category “B Construction” where insurance can be obtained at a 50% - 58% lower rate than the current “C Construction” category for Post and Beam structures.

Subsequent to receiving joint Ministerial Approval for 2x4 fire proof structures, the end of June marks one full year since the 2x4 Home Builders Association of Japan and the Council of Forest Industries Canada held their first qualification training seminars making possible the construction of 2x4 fire proof structures. During this time 147 projects have received construction approval. Of these 109 or two thirds of the total are located in Tokyo. 19 are located in Kanagawa, 3 in Okayama, 2 in each of Hokkaido, Chiba, Osaka and Hyogo Prefecture and the remainder in other locations. In looking at the breakdown by zone, 126 are in fire restricted zones, 17 in quasi-fire restricted zones and the remaining 4 in non restricted areas. While the initial marketing efforts may have targeted existing customers who desire to rebuild homes in heretofore fire restricted areas, more recently companies now appear to be formulating business strategies involving city property development. There are reports of companies specializing in the design and management of fireproof construction rental projects for real estate companies. One such company has successfully concluded 13 projects to date and is negotiating the conclusion of an additional 4. It has traditionally been very difficult to economically build on small city lots (average area of 100 square meters or so) with very narrow streets making access by trucks and cranes very difficult. Steel structures for these applications have not been cost effective while post and beam style construction results in the loss of valuable interior floor space. When compared to steel building a fireproof 2x4 structure can result in a cost reduction of approximately Yen 200,000/tsubo (3.3 square meters). As a result, even for single family inner city areas where property is so expensive that development has not made economic sense to date, projects become viable. Further, it appears there is an emerging market for very small one room rental apartments demanding relatively high rents targeting single individuals.

In March the Ministry of Agriculture, Forestry and Fisheries (MOAFF) announced new accreditation requirements associated with JAS certification. All companies wishing to receive accreditation (both new applicants as well as existing RCO/RFCO) are required to submit a formal application. Basic qualifications are proof of technical capabilities to ensure products receiving a JAS stamp are in compliance with JAS standards and in compliance with ISO Guide 65 and proof of independence and impartiality. All applicants are subject to MOAFF audit. Despite the fact that Canada received the first FTO designation in 1986 and the first RFCO in 2001 all 3 Canadian Registered Foreign Certification Organization are subject to a re-qualification process. The new system comes into effect March 1, 2006. COFI Tokyo is working closely with COFI Canada, CanPly and the CMSA as well as MOAFF to ensure successful conclusion to the process.

In June of 2004 COFI became aware of a movement by the Japanese government to potentially require Country of Origin labeling on all forest products sold in Japan. This development stemmed from a series of scandals in the food industry which involved false labeling of products. While the logic associated with initiation may or may not be valid, such labeling potentially has the benefit of allowing Canadian products to be differentiated in the market from countries carrying out illegal forestry or other questionable practices and standards On the other hand it also carries the additional costs associated with labeling or other unreasonable or onerous conditions. COFI has been following this issue through contact with Japanese government authorities as well as domestic industry and industry associations. The results to date are the introduction of an autonomous labeling system under the direction of a newly organized association, Forest-products Identification Promotion Conference (FIPC). Participating members are required to use the FIPC mark in addition to labeling country and area of origin on all products. Area of origin means the country where logging is done. To remain close to this issue COFI has become an associate member of FIPC.

The COFI SPF Group, with the support of Japan 2x4 Home Builders Association, Japan 2x4 Lumber JAS Council and Japan Wood Truss Council and cooperation of Mitsubishi Estate Housing Component Co., Ltd. hosted a five-day Framing Carpentry and Truss seminar (June 13th to 17th) titled “Two by Four Framing Training Workshop” at the Employment and Human Resource Development Organization of Japan’s Kodo Poly Tech Centre in Chiba. The workshop focused on re-training P&B carpenters and new carpenters on 2x4 construction techniques. Seiichi Higuchi, President of Higuchi First Class Architectural Office, instructed the workshop with the assistance of three qualified 2x4 framing carpenters who helped the seminar participants construct two small 2x4 structures over a five day period. There were 16 participants, 11 carpenters and 5 industry professionals in attendance. The event also included a tour of the Mitsubishi Estate Housing Component Plant in Chiba, the supplier of the SPF lumber and other materials used to construct the two small 2x4 structures..

The Korean government announced in spring 2005 that the newly introduced Korean Building Code (KBC) will now permit wood frame structures up to 18 metres to the roof crown and 15 metres to eaves. This change is a quantum leap from previous fire regulations on WFC that limited structures to two stories and single family housing (with an exception for pensions). On July 22nd the Ministry of Construction and Transportation also announced that structures built with assemblies complying to Korean Standard KSF 1611-1 would not require further testing and would be recognized as ‘fire resistant’. The designation of standard fire-rated wood assemblies (separating walls, floors etc.) is a major advance over previous requirements that mandated expensive fire testing and certification of any assemblies to be used in multi-family construction. With the new developments in Korea it will be possible to build wood frame structures up to four stories. Canada Wood has been working with fire researchers in Korea in an attempt to influence these new requirements. Korean builders are anxious to learn the construction techniques and critical design issues involved in multi-storey, multi-family building.

In line with favourable fire code changes implemented in Korea, Canada Wood is responding to builder requests for tech support by hosting or sponsoring several training programs this fall and winter:

• A group of Korea Wood Construction Association Builders will visit Canada to participate in an intensive program focused on the construction of multi-storey, multi-family residential dwellings.
  
• The Korean Wood Design and Building Association will deliver a twelve week part-time wood frame house inspection course. The idea is to create a cadre of trained inspectors who can eventually assimilate into a government sanctioned inspection framework.
  
• Wood University Centre will offer a two month part-time course focused on structural design using engineering software.
  
• We have invited the Korean Housing Association (KHA) to visit Canada on a technical study tour to learn about hybrid and multi-family construction. The KHA represents the major builders and contractor in Korea.

At the last Canada-Korea bilateral meeting co-hosted by CMHC and the Korean Ministry of Construction, Korea agreed to actively participate in a sub-committee process comprised of experts from both countries. The S/C would discuss issues of a technical nature and forward recommendations to the parent committee for action. Wayne Iversen was appointed Canadian co-chair at the first meeting held in Seoul this past February. The second meeting has been scheduled for Vancouver in mid-Septembers with 15 Korean building experts are expected to visit. Discussion topics include hybrid and family construction; building envelope; and quality inspection.

Move over Harry Potter, release of the Korean edition of the successful wood frame construction manual the “Guide to Good Practice” has been greeted with great acclaim and praise by Korean builders and designers. According to one commentator – “the Guide is the best thing that Canada has ever done to assist the Korean wood frame industry”. Originally developed for the Chinese market, the Guide was modified to comply with Korean code requirements and conditions and released in mid-2005. The first print-run has almost fully committed and a second printing is now contemplated. A companion document the “Inspection Manual” is under development for release in both China and Korea. It is intended to provide detailed guidance in the proper inspection and quality control of wood frame construction.

Case Study I
Dream Home Canada