Harmac looks to Chinese market
Although experts say it could take years to build demand, many believe China could revive forest industry

Robert Barron, Daily News
Published: Wednesday, February 18, 2009

B.C. industrialists will look to markets in China to help inject cash into this province's struggling forestry sector. Officials from Nanaimo's Harmac pulp mill have just returned from a trade mission to China in an effort to increase markets of its northern bleached softwood kraft pulp to the huge Asian nation.

The mission comes on the heels of a visit to China around Christmas led by Forest Minister Pat Bell and representatives from B.C. forest companies, including Western Forest Products. It was an effort to increase lumber and processed wood exports to that country while the American housing market continues its slump.

As a result of that visit, Vancouver Island's Pacific Homes has been awarded a $4-million contract to supply 48 town homes for a new development in Mongolia.

The company, which manufactures prefabricated homes in Cobble Hill and is planning to open a new 35,000-square-foot Rona home improvement store in south Nanaimo in May, is building two-storey fourplexes that will be shipped to Ulan Bator.

However, at least one forestry analyst says building large-scale trade relationships with Chinese and Asian markets could take decades and invites competition from much closer lumber suppliers such as Russia.

"Opening up the Asian marketplace for B.C. wood products is something I've been pushing hard for since Day 1," Bell told the Daily News.

"We're off to a good start and we intend to put more arms and legs on our initiatives in the coming weeks." Levi Sampson, a spokesman for Harmac, returned from China last week in an effort to bolster the mill's sales to its existing customers and build relationships with new ones.

He acknowledged that times are tough around the world for the pulp and lumber industries and there's still no light at the end of the tunnel.

"The price of pulp has dropped pretty low globally and there certainly has been no improvement in the past few months, but things are still going fairly well for us and we'll continue to explore for more opportunities in the Chinese markets," Sampson said.

"Times are tough and while we don't have any plans to cut back on our one-line production (employing about 200 workers), there are no plans to expand operations at this time. The downturn in forestry is definitely a long-term issue and it concerns us to see so many other pulp and sawmills continue to curtail operations."

Bell has ambitious plans for increasing B.C. forest products to Asia, particularly China, to help revive the struggling industry.

He said he wants to see lumber exports to China increase to four billion board feet by 2010, a dramatic jump from the 260 million board feet exported to the country last year.

"China provides us with huge opportunities and I see our exports there growing exponentially in the coming years, so we need to be more aggressive with our marketing campaigns there," he said.

"The Chinese have traditionally built out of concrete and bricks so we've budgeted $4 million a year on a wide variety of initiatives to encourage more use of wood in their construction, which includes training programs for Chinese builders."