February figures from the National Statistics Bureau report a frightening 23% jump in food prices. The unusually harsh winter storms destroyed crops, paralyzed transportation and caused factory shut-downs. This was one of the main drivers behind the official inflation rate which hit a decade high of 8.7%.

The Central Government took measures to counteract inflation including slapping price freezes on gasoline, electricity and other basic goods. China is now facing a likelihood of interest rate hikes as another anti-inflation tool. While most analysts expect upward movement of the Yuan, Goldman Sacs is boldly calling for a 12% appreciation against the US dollar. A strengthening Yuan is positive news for Canadian lumber exports.

Our previous China Market Update asserted that low grade shipments to China had increased significantly. Although this trend continues, the growth is not limited to low grade SPF.

The big picture is that total Canadian lumber shipments to China have increased by 450% over the last five years. Between 2006 and 2007 alone, SPF shipments grew from 43mmfbm to162 mmfbm for an increase of 375%.

SPF Shipments

Within this big picture we are seeing some particularly encouraging results. For example during the 2007 calendar year, BC shipments of on-grade SPF increased by 207%. This reflects a robust consumption of construction lumber. It also indicates that Canada Wood’s range of programs and activities are having a positive impact on China’s demand for structural wood products.

“Is this for real?” were the thoughts running through Kerry’s head as he watched some workers preparing a concrete foundation for a wood-frame villa.  He had just arrived in Shanghai to fill his role as guinea pig for the revised Quality Assurance program.  After running his own construction team in Japan for the last 12 years, Kerry wasn’t sure if there was potential to see things more over-built than the Japanese approach.  Somehow, the locals were out to prove him wrong.

Now, more than a year later, Kerry is still in Shanghai.  He doesn’t feel like the guinea pig on the program anymore, instead he’s been with it and watching it develop for his whole time in Shanghai.  Now when people ask him about wood frame construction in China, he just chuckles and says, “It’s got a few challenges ahead of it.”

He firmly believes in getting involved directly with the construction.  “A lot of what we do here is telling people how quick and easy wood frame construction is.  But every time the locals try it, they prove how slow and difficult it can be.”  So to put his words into action, Kerry has physically worked on several projects around China.  Once, he framed a whole house in Beijing in just one week by himself.  “Everybody who saw that project agreed, wood frame is faster than concrete or steel.”

When he’s not involved with site work, Kerry works on some other projects which don’t move as fast as building with wood.  Things like code development, and teaching builders how to properly protect their project against water penetration.  “The resistance to change is amazing.  We’re living in the country with the fastest rate of change in the whole world, but at the same time they don’t want to change the way they’ve been doing things for the last 5000 years."

When he gets away from work, Kerry likes to take in some of the cultural relics China has to offer.  He likes to think of the nearby city of Suzhou as his refuge from the hustle and bustle of Shanghai, and takes every opportunity available to spend a weekend there.  Additionally, he’s trying to learn the Chinese language, though he admits that so far, he’s learned enough to thoroughly confuse anyone he tries to have a conversation with.  “Maybe someday I’ll be fluent.  By then, the market will be flooded with 2X4’s, and it will be time to move on.”

Lighter foundations would make wood frame more competitive
Constructing any home usually starts with a concrete foundation.  Foundation sizes are determined by soil conditions, building size and local building codes. Of course, the bigger the structure, the bigger the foundation. Since the foundation accounts for a major portion of the total construction cost, foundation sizes are designed and engineered to be structurally safe at a minimum cost.

Here in China, residential housing foundations are often built more robust than foundations that support large wood frame apartment buildings in Canada. Of course, the weight of a 3 storey concrete house requires a heavy duty foundation. It is not uncommon to see 30 meter reinforced concrete pilings under massive piling cap beams, and 250mm thick double reinforced suspended slabs in a 3 storey concrete home.

As the majority of the single family homes in China are concrete, requirements for the foundation of all homes are the same, regardless of whether or not lighter materials are used to build the structure it is supporting. Thus, the cost of building wood frame homes remains higher than necessary. The obvious cost cutting solution for builders would be to design lighter foundations. Unfortunately, the current building code does not allow builders, designers, engineers or inspectors the freedom to specify the foundation size relative to the structure it supports.

In China, residential housing foundations are often built more robust than foundations that support large wood frame apartment buildings in Canada.	As the majority of the single family homes in China are concrete, requirements for the foundation of all homes are the same, regardless of whether or not lighter materials are used to build the structure it is supporting.

Should this barrier be torn down, the price of wood frame homes in China would instantly decrease giving wood frame builders a sales advantage in the housing market. Actions by the Canada Wood China team are in motion already to educate the designers, engineers, and inspectors. Research is underway and building code updates are in the works. We are building a solid foundation for the Chinese builders' future in wood frame construction.

Canada Wood College completes 1st term

Students learn proper sheathing technique

The curriculum was originally developed by BCFII for Canfor College and was modified to include content from the Guide to Good Practice. The lessons were also updated to emphasize current directions in the Chinese market like multi-family, wood trusses and in-fill floor system.

Steve Ross elaborated on the program from a sparsely decorated classroom at SIT. 

Instructor Michael Nauth supervises hands on training

“It’s important that we make our lessons relevant to the situation in China. Canada Wood College is by far our most effective program for developing inexperienced workers into professional framers. We not only aim to develop their skills but we also need to get them to understand the technology behind the wood frame system. We hope to graduate a group of workers who will become the leaders of wood frame construction within their companies”.

The demand for Canada Wood College was surprisingly high. Even though it was not heavily promoted, word spread and construction companies from as far away as Harbin were lobbying to have their employees admitted. The program is structured so that the students alternate between working at their regular jobs and attending the college’s four progressive terms. Of the thirty students admitted in the first term, most have significant backgrounds in concrete construction, but are relatively new to wood frame construction.

Cao Keke is a thirty year old project-lead from Nanjing. His company sent him to Canada Wood College with the understanding that he would return to Nanjing to teach his co-workers. Cao was impressed with the instructor’s “strict attention to detail”. He added that his experience at the college “will leave a deep influence on my future work”.

Canada Wood was fortunate to secure Michael Nauth, a well respected instructor from Algonquin College in Ottawa. One might expect his adjustment to have been huge, leaving a class of young Canadian college students to teach a class of more mature Chinese workers, but Instructor Nauth seemed to take it in stride.

Canada Wood's first graduating class

“Students in China are much the same as those in Canada.  You have the very bright guys and the average guys.  You have the industrious ones, the ones that respond to the ‘carrot’, and the ones that respond to the ‘stick’. On the plus side, [the Chinese students] are much more attentive and they are not shy about asking questions when they don't understand a concept.”

One big challenge for the instructor is teaching the students to work with a building system that requires both metric and imperial measurements.

“The 4 x 8 panels are a poor fit into the metric system. Stud layout is 406 OC instead of 400 mm, but more importantly, the calculations for roofs and stairs are very difficult. It would help the transfer of methodology immensely if the panels that were exported to China (and to anywhere outside North America) were cut at 1.2 m x 2.4 m.  Then the layout would follow 300/400/480/600 mm on centre and the tape measures could be marked for easy reference.  Roof slopes could then be matched to the base of 10 (instead of 12) and the calculations would be easy to do in your head.”

A concrete tradesman from Shanghai named Ding Wei confirmed the instructor's point. He said that he found the required calculations to be difficult. He also said he enjoys building with wood and he found the “systematic approach” taught in class to be especially valuable. 

Instructor Nauth will return to SIT this May when the students reconvene for the second term. He will bring additional concepts for them to learn, new techniques to practice, and without a doubt, more math to tackle. In the meantime, Wang Funan, Yang Haifeng, and Zuo Wei will travel back to Harbin “to build nice wood construction”. In his spare time Wang promises to “tell people about how wood frame meets the Chinese requirement for harmonious living.”

Portland Garden, a 168 unit WFC villas project, is located in the Northeast part of Beijing and the largest pure WFC project that we have known in China. The developer is Beijing Jingchen Real Estate Co. Ltd. and the builder is Tecsun Co. Ltd. Portland Garden is their third WFC project working together. They worked in Suzhou, and Shanghai with 40 and 108 houses, respectively.

On May 1, they will begin sales for the second phase of Portland Garden. The sales campaign will change their key promotional message from ‘western lifestyle’ to “western wood house”. The strategy is to capture the small niche market of Chinese and foreigners that are already familiar with WFC and are trying to find / buy WFC housing in China. Mr. Yang, the president of Beijing Jingchen Real Estate Co. Ltd, expressed that prior to the messaging switch, Chinese and foreigners who were looking for WFC homes were stumbling across the Portland project thinking it was traditional RC construction but were so excited once they found out it was 2X4 because they thought it didn’t exist in China. 1 million RMB is going to be spent in the media campaign to the consumer and WFC will be a hot topic since May, 2008.

Portland Garden, located in the Northeast part of Beijing, is the largest WFC project in China.	168 Western-style WFC villas are slated to go on the market May 1.

Mr. Yang also invites CW to the opening ceremony to have a relaxed chatting session with prospective buyers. Mr. Yang hopes that a CW rep from Canada will offer insights to what it’s like to live in a WFC home and answer many questions that customers have about it.

China’s architectural sector is well established to serve concrete and steel construction. This is evident by the resources available for concrete and steel design. Educational materials, technical software, and design manuals are abundant.  In order to facilitate local wood frame design, wood-specific support materials are required.

This is a period of rich diversification in Chinese architecture. Designers have an appetite for new ideas making this an ideal time to promote wood frame design. Technical guidance is an effective approach for reaching architects and introducing wood frame to them.

A challenge unique to the China design market is that architects often need to hit the ground running. They don’t get the benefit of working on simple projects to gradually develop their abilities. Instead, they break into wood frame design with little technical mentoring on difficult projects such as large multi-family developments.

The Standard Design Book (SDB) was created to help architects manage the steep learning curve. The book was produced by the China Institute of Building Standard Design and Research (CIBSDR) in partnership with Canada Wood. The SDB is also endorsed by the Ministry of Construction (MOC) which gives it solid credibility.

The SDB helps architects create blueprints for wood-frame construction. It illustrates installation and connection details and it prescribes recommended treatments for challenging elements such as windows, transition flashing, and beam construction. Architects can use these drawings as a learning resource and they can copy them directly into their own plans.

The SDB contains fifty pages of design detail with close to 150 drawings showing light wood frame construction.  It was created specifically for Chinese architects, as it is written in Chinese and it references Chinese building codes. The book includes various drawing formats including floor plans, elevation drawings, and index drawings.

Canada Wood ensured that the SDB serves the goals of the Quality Assurance program. The drawings are consistent with “better building practices”, which the architects will mandate forward to the builders. Common quality threats are addressed such as moisture control, fire proofing, and termite control. The book also encourages the use of structural materials that meet Canadian standards.

The Standard Drawing Book provides a good foundation to establish the wood frame design capabilities in China. “Made-in-China design” is essential to supporting the greater wood frame construction industry and the market growth for dimension lumber.

Canadian production inferior to German, says Scandinavian agent

Reports suggest that UK softwood sales have held-up reasonably well in the first part of 2008, and that the large stocks that built up in winter are slowly being reduced. However, prices are being kept low by Swedish shippers who are anxious to clear their remaining stocks of windblown material and sawnwood produced on the back of pulp output, and by importers who need to clear excess landed stock. At the same time, forward prices are more consistent with those seen last year, pegged by German and Finnish companies that must recover the cost of their inflated log prices. The result is that landed KD carcassing stock is being sold for as little as £130/m3 FOM, while forward prices are closer to £150/m3. Forecasts suggest that shortages could arise by as early as spring, and that £150/m3 will emerge as the accepted price.

Canada Wood representatives are reporting that the quality of Canadian production is viewed widely as being inferior to German and Scandinavian production, in terms of homogeneity, knot density, and length.

One agent commented that Canadian suppliers have developed a poor reputation over the last 12 months, and have a great deal to do if they want to become more than fringe suppliers to the UK in future. Consistent reports suggest that the quality of Canadian production is viewed widely as being inferior to German and Scandinavian production, in terms of homogeneity, knot density, and length (i.e. Canada’s 4.8m length maximum). It is clear that Canadian exporters will need to take great care to supply material in qualities and quantities that more closely meet market expectations and requirements. Another problem facing Canadian shippers currently is the strength of the CAD.

Buchanan Lumber Sales of Ontario shipped 9,400m3 of timber to the UK in a break-bulk delivery to the Port of Ipswich for Price & Pierce Softwood Ltd. The cargo featured around 3,000m3 of treated timber. Buchanan hopes that its vessel will make regular calls at Ipswich in future.

Timber wins audience vote over steel and brick: Report on ‘Innovations for the Built Environment’ Trade Show

Canada Wood UK participated at ‘Innovations for the Built Environment’ on behalf of the Quebec Wood Export Bureau. The following report describes observations made at the trade fair.

‘Innovations for the Built Environment’ took place at Earl’s Court in London during period 26-28 February 2008. The annual event is a cooperation of three trade fairs that take place beside one another. Together Ecobuild, Futurebuild and Cityscape claim to represent the most important themes impacting design, construction and the built environment – sustainability, innovation and the creation of successful and sustainable places. Overall this year, the show boasted some 500 exhibitors, and attracted an expected 20,000 visitors, marking rapid growth; the 2007 show accommodated 354 exhibitors and approximately 15,000 visitors.

Ecobuild features sustainable design, construction and the built environment, with over 400 exhibitors. Futurebuild embraces the theme of offsite and innovations in construction, hosting over 125 exhibitors. Cityscape is about urban design and the public realm, and attracted approximately 60 exhibitors. Timber had a strong presence at the show, with manufacturers, importers, distributors, merchants, timber frame and joinery companies that included Arnold Laver Timber World, BSW Alouette, BSW Timber (promoting Accoya), Capricorn Timber, Covers Timber Structures, Finnforest UK, Howarth Timber (Windows & Doors), JELD-WEN, Jewson, John Brash, Kingspan Insulated Panels, Kura Wood, Lawsons Timber and Builders Merchants, Proctor Group UK Ltd, Stewart Milne Timber Systems, Tarkett Limited, Travis Perkins and Ultra Joist. Timber Building magazine, Timber in Construction magazine, TRADA, the Wood Window Alliance and Modern Masonry Alliance also chose to exhibit at the event.

QWEB-Canada Wood stand attached to the Canadian Pavilion at Futurebuild 2008, London.

‘Innovations for the Built Environment’ offered over 100 individual conferences and seminars, many of which were free of charge. They covered many topical themes, commonly related to meeting government sustainability and performance targets and their expression through building regulations. A keynote address was made by new Housing Minister, Caroline Flint MP, and three of the mayoral candidates, Ken Livingstone, Boris Johnson and Brian Paddick discussed their plans for London's response to climate change. Carbon conservation issues were a recurrent theme.

Timber once again won the case for being the most sustainable construction material during what was billed as being the ‘Great Materials Debate’ at Ecobuild. After hearing the arguments by champions speaking on behalf of brick, steel, concrete and timber, the audience voted overwhelmingly in favour of timber.

The Canadian High Commission coordinated a Canada Pavilion within the Futurebuild section, comprising booths occupied by BC Market Outreach Network, Canada Mortgage & Housing Corporation, Canadian Council of Forest Ministers, Canadian Standards Association, Icynene, Quebec Wood Exporter Bureau (QWEB), Super E Office and Vincent Timber.