C I N T R A F O R
Special Paper Abstract
A Japanese Market Profile and Sourcebook for Pacific Northwest Value-Added Wood Products Exporters
Anne Theisen, John Dirks. 1996. ( pp) SP23 $20.00
"Today, for many products and services, the Japanese set the competitive standards. A company should never decide to come to Japan or significantly enhance its presence there without thoroughly researching and understanding the existing and potential competition. Even before that analysis takes place, however, the strengths of the company at home must be analyzed What are the resources that permit the company to be competitive in Japan? Many detailed questions must be asked and answered about the company itself in order to understand the costs of getting into the battle on Japanese soil When management is sure that it knows itself then it can try to understand Japan and its competitive environment in the context of the business."
-from Gaijin Kaisha; Running a Foreign Business in Japan, by Jackson N. Huddleston, Jr.
A new era of wood products exporting to Japan has emerged. what was once primarily a market for log exports has developed over the past 15 years to embrace a variety of finished and semi-finished imported wood products used in housing and building construction, by the wood processing industries, and interior home and office furnishings industries. Increasingly, Japanese contractors and importers bypass distribution channels in Japan and buy directly from American manufacturers or exporters that add market value to the products through delivered services. The wood products import market offers expanding opportunities for U.S. firms willing to do the up-front research and spend the time and resources to develop and maintain a competitive market presence in Japan.
A Growing Market
The importance of the value-added products market in Japan for Pacific Northwest manufacturers, ports, suppliers, and service industries led to the idea of this sourcebook. In 1994, $1,021 million in processed wood products (all solid wood products excluding logs and wood chips) were exported from the U.S. to Japan. While softwood lumber exports represent 61 percent of this amount at $626 million, the proportion of value-added products to processed products in the export mix has grown significantly from 15 percent to nearly 40 percent over the past five years.
Regional Comparative Advantages
Companies in the Pacific Northwest are well positioned to export value-added wood products and related services to Japan. In value terms, nearly 75 percent of the lumber and value-added wood products exports either originate or pass through the Pacific Northwest on their way to Japan. An experienced network of manufacturers, consolidators of products, exporters, freight forwarders, and other service providers exists in the Puget Sound, greater Portland, and other regional commercial areas. The region also hosts a transportation network of nil and trucking lines that lead to several major deep waterports. The region's long history as a supplier of logs and processed wood products to Japan and other Pacific Rim countries has created a positive climate for exporting. Organizations including industry associations and others sponsored by local, state and federal governments exist to help beginning and experienced exporters in their marketing efforts.
Sourcebook Approach
This book is intended to be a practical guide and reference to the Japanese market. It draws on a collection of published and unpublished reports and attempts to synthesize and present a breadth of information about the Japanese home building economy; the various niches for value-added products within housing, construction, and industrial markets; current product trends; and competitive issues. It is also designed as a sourcebook to the various organizations active on both sides of the Pacific in developing long term productive business relationships between wood products and building materials exporters in the U.S. and importers in Japan.
The first chapter provides a description of Japanese imports. Export trade data for value-added building materials. This is followed by an analysis of the Japanese housing market, which drives demand directly or indirectly for all value-added sectors. Chapter three explains some of the major influences 6n the housing market which affect the level of imports. Next is a study of the Japanese domestic secondary wood products industries. With this detailed information about the market, more general information is then provided in chapters five and six regarding Japan's housing and construction economy; as well as issues for exporters to consider when doing business in Japan. Washington State market development efforts are described. Finally, the Appendix provides a descriptive glossary of market development services and contacts.
The sourcebook design should encourage repetitive referencing. It is not necessary to read through the whole document to understand any particular chapter that is the most timely and applicable to the users exporting situation.