Persistance Pays

Timber could be the next decade's oil

The Canadian wood industry appears on the brink of a major windfall in China, proving Benjamin Franklin’s belief that “energy and persistence conquer all things”.

Despite the social stigma associated with wooden houses, and the unhelpful building codes, the Canadians (and Americans) have long maintained an expensive lumber promotion campaign in the belief they could break into the world’s fastest-growing housing market.

New Zealand put its toe in the water for three years with the government-funded Wood Innovation Centre in Shanghai, but that folded last year for lack of money and industry support. However, the much better funded North Americans have hung in there long enough to grab what at least one observer expects to be a genuine bonanza.

Mass urbanisation in China could make timber the ‘new oil’ and push prices up more than 300% in the next decade, according to the Times newspaper’s Asia business correspondent Leo Lewis. He expects construction activity in China over the next two years will reach unprecedented levels: “US$141 billion has been set aside in the national budget for production of 20 million square metres of affordable housing by 2012.”

Although wood is not the preferred construction material in China – timber houses are generally associated with the lower classes – the Government has issued new building codes, which are expected to increase opportunities for timber framing. This is where the North Americans should be the big winners.

Royal Bank of Canada spokesperson David Watt says the new regulations are the most comprehensive and detailed code for wood-frame structures. “Chinese demand for Canadian lumber is set to soar. We said Canada was moving from being a nation of hewers to one of bankers and real estate agents. But that might have been premature – lumber might be the next decade’s oil.”

Lumber exports from Canada to China doubled last year.