​Executive Summary
Japanese housing starts reached a high of 1.64 million in 1996 as homeowners rushed to beat the consumption tax increase scheduled for 1997.  The Asian economic downturn and various other factors caused housing starts to fall to 1.2 million in 1998.  The decline in housing starts, in conjunction with a Japanese recession, contributed to a dramatic decrease in imports of wooden building materials.  Japan, the most important export destination for PNW solid wood products, accounts for almost 31% of PNW exports.  During the economic downturn, Japanese imports of PNW primary wood products fell 30%, to $670 million in 1998 while exports of secondary wood products fell 36%, to less than $100 million.
Events that occurred before and during the recession have caused structural changes in the flow of wood products to Japan.  During the downturn, the Japanese yen weakened against the US and Canadian dollar, effectively raising the price of US wood products in Japan.  The consumption tax rate increase, strong US dollar, and the extended economic recession combined to heighten price sensitivity among Japanese consumers.  These factors combined to reduce the competitiveness of US wood products in the Japanese market.
The majority of firms engaged in exporting wooden building materials to Japan were affected by the Japanese recession.  While most firms reported a decline in export revenues from Japan, some firms experienced increases in their exports to Japan.  This anomaly prompted an investigation into why some firms were successful in increasing their exports while other firms were not.  The objectives of this study were to document the perceptions of PNW exporters and manufacturers on the importance of services offered to Japanese customer, to discover the key characteristics of successful exporters and to identify the impact of the marketing mix on export performance.  A mail and fax survey was designed to elicit specific information on the demographic and operational characteristics of exporting firms in the Pacific Northwest.
The survey population included firms that exported or manufactured and exported wooden building materials to Japan.  The survey was administered by fax with follow up faxes and letters.  Of the 163 US and 71 Canadian firms, 44 US (27%) and 15 Canadian (21%) firms were judged to have gone out of business.  Out of 173 viable firms, 72 returned completed surveys for a response rate of 41.6%.  US firms returned 41 surveys from a population of 119 for a return rate of 34.5%; while 31 of the 54 Canadian firms returned surveys for a response rate of 57.4%.
An open-ended question prompted the respondents to identify the factor that had the greatest impact (positive or negative) on their business in Japan.  The most frequently mentioned factors were the Japanese recession and the strong US dollar, while marketing factors, such as distribution and services were mentioned less frequently.
The survey data suggests that shorter channels were used more often than the traditional Japanese multi-layered channel.  On average, 58% of the respondents export sales went directly to Japanese homebuilders, while an additional 7% went through a company sales office.  Other distribution channels included Japanese distributors, Japanese wholesalers and other trade intermediaries.  Respondents perceived a significant advantage to having a sales office and sales/technical representatives in Japan.  They also perceived a significant advantage to using a Japanese distributor to take control of product distribution.  Overall, the survey data suggests that distribution channels for wooden building materials to Japan are becoming shorter.
Softwood lumber was the most commonly exported product (22%), followed by wooden doors (17%) and wooden windows (16%).  The remaining products exported included prefabricated housing components (10%), structural panels (8%), cabinets (8%), and glulam beams (3%), while other products accounted for 16% of the export mix.
Survey respondents were asked several questions related to the importance of the offering specific services to their Japanese customers.  In general, the importance of providing these services was perceived to be significantly more important by the firms that provide them relative to the firms that do not provide them.  The services included in the survey were:  warehousing spare parts in Japan, offering a product warranty, providing translated product information, providing translated installation instructions and providing translated maintenance instructions.  Of 68 respondents, 53% reported that they provided translated product information, 46% provided translated installation instructions, and 36% supply translated maintenance instructions.  An analysis of the data suggests that as the product becomes more technically complex, there is a lower likelihood that the exporter will provide translated technical information.
Nearly all of the survey respondents reported that their Japanese customers had become more price sensitive.  Most firms reported that this increased price sensitivity had a negative impact on their export performance.  However, a small set of respondents indicated that their exports to Japan increased despite the increased price sensitivity of their Japanese customers.
A comparison of US and Canadian firms revealed some basic differences in the products and distribution channels used to service the Japanese market.  Canadian firms shipped 71% of their total exports to Japan, while the US only shipped 53%, a significant difference.  Canadian firms also tended to ship a larger volume of primary wood products through shorter channels than their US counterparts.  US firms were more likely to ship value-added products through longer distribution channels.  Finally, Canadian firms were more likely to know the segment of the residential construction industry in which their products were used.
The distribution channel and product mix of firms that successfully exported to Japan during the Asian downturn differs greatly from the unsuccessful exporters.  The firms that did well had export product mixes containing high amounts of wooden prefabricated building components and other value added products.  Unsuccessful exporters tended to focus more on lumber, structural panels and doors.  Successful exporters tended to report a higher use of short distribution channels, often exporting directly to the homebuilder or to a company sales office.  Finally, successful exporters tended to supply a higher percentage of their products to post and beam builders and into other (non 2x4) segments of the construction industry.
Market knowledge appeared to play a vital role in export success as unsuccessful firms were over three times more likely not to know how their products were used.  This lack of market knowledge makes offering after market sales support difficult and successful promotion within those market segments almost impossible.  This research suggests that the firms that were successful during the downturn exported more than twice the amount of products into other market segments (primarily post & beam, prefabricated homes and log homes) than did unsuccessful firms.  These segments of the housing market may be less sensitive to changes in the overall economic conditions than are the larger post and beam and 2x4 housing segments.
Analysis of total sales by export success reveals some interesting patterns.  The medium-sized firms (export sales revenues between $1 million and $5 million) appear to have done much better than both small firms (export sales revenues less than $1 million) and large firms (export sales revenues above $5 million) (Figure 5.5.7).  It is interesting to note that a much higher percentage of the medium-sized firms reported an increase in export revenues.  Fully two-thirds of the companies who reported an increase in export revenues were medium-sized firms.  In contrast, the firms who reported a decline in export revenues were fairly evenly distributed, although almost forty percent of these firms were large firms while just 13% of the successful firms were large companies.  As mentioned previously, exports tend to be a much higher percentage of the total sales revenue of the small- and medium-sized firms in contrast to the larger firms who tend to have a heavy focus on the domestic market with exports rarely comprising more than 10% of their total sales.  Thus, we might conclude that the medium-sized firms are more committed to the export market and have developed a marketing strategy that provides them with a greater chance of succeeding in Japan even when the markets are poor.  While smaller firms are also more focused on their export markets it would appear that they do not have the financial and marketing resources to withstand a significant decline in the export market, as indicated by the fact that 83.3% of the small firms reported declines in export sales revenues in Japan.
A factor analysis reduced the larger number of eleven marketing factors into just three factors.  The average importance ratings for each factor clearly show that not all of the factors were perceived to be equally important in marketing wood products in Japan.  The factor with the highest average importance rating was “Providing translated product information to Japanese customers” which received an average importance rating of 5.52.  The second factor, “Providing customized in-country services”, was considered to be somewhat important with an average importance rating of 3.94.  The third factor related to the use of specific distribution strategies in Japan, was perceived to be the least important of the three factors with an average importance rating of 3.42.
This study has documented structural changes in the trade of PNW wooden building materials with Japan.  It has also provided quantitative and qualitative insights into the impacts of the Asian downturn on the performance of exporters in the PNW.  The Asian downturn may have served to accelerate the changes occurring in the distribution channels, product mix, and services offered to the Japanese housing market.  Changes in the demands of the Japanese consumers have opened new areas and created new opportunities for firms to develop or increase their competitiveness.  These changes include shortening the distribution channel and shifting the export mix to include more value-added products.  Also, providing more after-sales support, primarily translated product information was also perceived to be important.  While some of these strategies may not be suitable for all firms, exporters should realize the need for increasing their competitiveness in the expanding global economy.

Executive Summary
The Pacific Northwest (PNW) forest sector is strategically linked to Pacific Rim markets, as it has been at a competitive disadvantage with the US South and interior Canada in delivering wood products to the population dense eastern and southern US markets.  Deep-water port access to Asia however, has provided the PNW with a comparative advantage in serving what was until recently, the region with the world's highest sustained growth.  The Asian financial crisis, which began in 1997, substantially reduced US exports to Asia, and has compounded the negative impacts of the harvest restrictions intended to protect the habitat of endangered species, which began in 1990.  Both the Asian financial crisis and the harvest constraints are forcing long-term structural changes.  Understanding these changes is important to maintaining the economic and biological health of the forest sector. 
​

​Executive Summary
Introduction
The Japanese market for prefabricated homes and wooden building materials has tremendous potential for US firms, particularly those located in the Pacific Northwest.  For example, exports of prefabricated housing to Japan increased by 51% from 1994 to 1995, with 81% of these exports originating from the Pacific Northwest.  Despite this success, Japan is a relatively new market to most US firms and more information is required before US firms can fully take advantage of the opportunities that exist.  This research project was developed to provide a broader understanding of the Japanese market for prefabricated homes and wooden building materials, and to identify the problems that exporters must overcome in order to compete effectively in Japan.
The objectives of this project were:  (a) to perform a competitive assessment of the Japanese market for imported prefabricated housing and wooden building materials,  (b) to identify those marketing strategies that are being employed by US manufacturers to compete successfully in Japan, and  (c) to identify the tariff and non-tariff barriers that are perceived to adversely impact the competitiveness of US firms in Japan.
The results of this research study were derived from a census of prefabricated housing manufacturers, export consolidators, and Japanese trading companies currently exporting their products to the Japanese market.  The final sample frame included sixty-six firms:  fifty-one in Washington and fifteen in Oregon.  Sixteen of the companies manufactured prefabricated housing, while thirty-four were export consolidators, and sixteen were subsidiaries of Japanese trading companies. The final response rate for the survey was 70%, with responses being received from 75% of the prefabricated housing manufacturers, and 79% of the export consolidators, but just 47% of the Japanese trading companies.
Results
Prefabricated housing exporters in Washington and Oregon can be characterized as being small to medium-sized firms with annual sales of less than $10 million and employing less than 25 employees.  Most of the firms have been exporting to Japan for a relatively short time, usually less than five years.  However, prefabricated housing manufacturers appear to be highly involved in the Japanese market, as indicated by the fact that approximately half of the respondents generated more than 50% of their annual sales revenue from exporting to Japan.
The promotional strategies used by the survey respondents were fairly limited, a fact which might be attributed to the small size of the respondents and their limited financial resources.  A majority of the respondents indicated that they relied on product brochures, word-of-mouth referrals, and trade shows to promote their products.  Promotional strategies that required a higher commitment of financial resources, such as establishing a model home or product showroom in Japan, were employed less frequently than the other strategies.
In general, the distribution channels for wood products exports in Japan are complex, consisting of several layers of intermediaries.  However, the results of this research indicate that many of the prefabricated housing manufacturers and export consolidators have been successful in bypassing the traditional Japanese distribution channels.  Approximately half of the respondents indicated that their primary channel of distribution involves selling their products directly to Japanese home builders.  This strategy provides these firms with substantial cost savings, helping to increase the competitiveness of US prefabricated homes and building materials in the Japanese market.
Most respondents considered the establishment of a strong personal relationship with their Japanese customers as one of the most important factors for succeeding in the Japanese market.  This factor was rated as being more important than any other single marketing factor by each of the three groups of respondents included in the study.  Other marketing factors that were perceived to be important included providing after-sales service, short delivery times, and technical assistance to the customer.
Product adaptation was also considered to be an important factor for succeeding in Japan.  In fact, all of the prefabricated housing manufacturers and 88% of the export consolidators reported that they modify their product to some extent for their Japanese customers.  The most common types of product adaptation included changing the design of the home to include a tatami room and/or a genkan (Japanese-style entryway), utilizing higher quality materials in those products exported to Japan, and translating product brochures, installation instructions, and technical information into Japanese.
JAS and JIS product certification of building materials and the Japanese building code were perceived to be non-tariff trade barriers that had a substantial negative impact on the competitiveness of US prefabricated houses and building materials in Japan.  Two other factors, the difference between US/Japan construction technology and inefficient transfer of US construction technology, were also perceived to be non-tariff barriers that restricted the competitiveness of US firms in Japan.  It is interesting to note that in many cases the US subsidiaries of Japanese trading companies perceived the various trade barriers as having a greater impact on competitiveness than did the US firms.  This was particularly true with respect to the complexity of the distribution channels in Japan and the import tariffs for prefabricated houses and building materials.
The vast majority of the prefabricated housing units exported from the US to Japan are manufactured using 2x4 construction technology.  This poses a problem given the fact that most of the survey respondents reported that Japanese architects, contractors, and carpenters do not possess a strong understanding of 2x4 technology.  In addition, many respondents stressed the fact that Japanese residential contractors seldom utilize the construction management techniques that are widely used in the US residential construction industry.  As a result, construction costs are more than twice as high in Japan as in the US.  But perhaps more important from a long-term strategic market development perspective is the fact that this basic lack of understanding regarding 2x4 construction technology can adversely impact the quality of 2x4 homes built in Japan and reduce their long-term performance.  Either of these factors could potentially erode the competitive position of US prefabricated housing and wooden building materials in the event that substandard products and/or product performance adversely affect Japanese consumer perception of US products.
Not surprisingly, survey respondents indicated that the efficient transfer of 2x4 construction technology was an important component of their marketing mix, with approximately 85% of the respondents utilizing some type of strategy to address the issue of technology transfer.  The three most widely employed types of technical assistance were:  providing customers with installation instructions and/or product brochures, providing customers with seminars and/or on-site technical training, and sending over carpenters and/or construction site supervisors to ensure the quality of the construction work.  Unfortunately, current Japanese immigration law makes it very difficult for US contractors and carpenters to obtain the work visas that are required to work in Japan.  When asked to indicate what strategy would be most effective in transferring 2x4 construction technology to Japan, almost half of the respondents indicated that they favored providing training for Japanese construction professionals.
The results of this study indicate that prefabricated housing manufacturers and export consolidators in the Pacific Northwest are strategically poised to take advantage of current housing policies in Japan that promote imported housing and building materials.  Despite the fact that many of the participants in these industries are relatively new to the Japanese market, a large number are already experiencing success.  In particular, these firms have demonstrated the ability to take advantage of the new competitive environment in Japan by developing strong business relationships with their customers and partners and developing distribution channels that bypass the traditional extended and costly distribution system.  Given the strengthening Japanese economy, the opportunities for imported housing and building materials in Japan appear to be bright.

​Executive Summary
Existing models of internationalization have failed to address adequately the important question of why some firms succeed in exporting while others fail. Using interviews with twenty-five export managers and fourteen industry experts associated with the forest products industry, this research develops a resource-based model that examines the impact of the firm's intangible resources on export performance. In developing the model, we studied the U.S. wood products industry, a domestically-focused, commodity-oriented industry in which exporting has been the almost exclusive entry mode for small- and medium-sized firms entering foreign markets.
Many researchers have hypothesized that a firm's tangible resources are the primary determinant of export performance. However, tangible resources such as raw material supplies, financial assets, manufacturing facilities and sophisticated technology do not guarantee export success although they can provide a firm with a competitive advantage over their competitors. Rather, there appears to be some evidence that intangible resources may play a key role in the export performance of the firm. Intangible resources might be described as those resources within the firm that are difficult to quantify. For example, managerial innovativeness, managerial attitudes towards risk, managerial commitment to exporting and the firm's reputation all represent intangible resources. The preceding examples highlight an interesting factor of intangible resources. That is, intangible resources are very often related to the quality of the human resources employed by the firm.
What differentiates this research effort from previous work in this area is that firm size was not found to be directly correlated with export performance.  While size may provide a firm with a comparative advantage in tangible resources and a competitive advantage in the domestic marketplace, these advantages do not necessarily translate over to foreign markets. In fact, the increased bureaucracy and conservative management practices associated with larger firms may adversely impact the export performance of those firms. In contrast, this research has indicated that the specific competitive advantages associated with successful exporters were related to the development of intangible resources within the firm that are independent of firm size. The intangible resources that appear to be most important in contributing to export performance are managerial innovativeness, managerial commitment to exporting, the ability to manufacture high quality products, and knowledge of foreign markets.
 

​Executive Summary
While the Russian Republic represents one of the largest single holdings of forests and forest inventory, the potential of this resource is far from fully realized. In part, this is due to the huge size of the Republic, and the overall pressures that have taken priority over the development of the forestry and forest products sector historically.
 
In more recent years, the ongoing political and economic disruptions associated with political and economic reforms have resulted in actual declines in output and production in the face of breakdowns in the routine processes of economic activity generally. The findings of this analysis clearly indicate, however, that there remain a number of fundamental problems of a long-term nature that will inhibit and slow the realization of the potential for the forestry and forest products sector beyond the immediate short run chaos.
 
Timber Resources
The economic availability of timber resources, in contrast to the physical presence of forests, brings into question the real potential for near term development. Primary harvest, from designated (Category III) forests under the administration of the forest administrative authorities, has been stated as approaching 833 million cubic meters annually as a sustainable yield (Annual Allowable cut). However, only a fraction of that potential is considered by the Russian authorities as either currently available or potentially available over the next twenty years through significant investments in infrastructure for accessibility. In the present analysis, it is suggested that of the 545 million cubic meters of current and potentially accessible AAC, that the near-term harvest will be restricted to the currently accessible forests. These forests have an AAC "realistic" AAC of only 426 million cubic meters, or about 51 percent of the aggregate physical total. Of the currently accessible AAC, some 248 million cubic meters are from conifer forests, and 178 million cubic meters from deciduous forests. Further, this analysis finds that some 88 million cubic meters of the "currently accessible" AAC is in fact not realistically accessible due to access, reservation for alternative uses, environmental restrictions etc.
 
Timber supplies from other sources include intermediate harvests (primarily from silvicultural operations), harvests from "other" forests not administered• by forestry organizations, and secondary resources from waste and recycling. While important, these sources do not constitute more than 125 million cubic meters in the aggregate, and at present is mainly derived from secondary sources (primarily sawmill waste).
 
Economic Reforms and Forestry
The future outlook for the forestry and forest products sector is highly uncertain in today's political climate. As Russia struggles to install "market economy" mechanisms, it finds itself trapped in many economic and political issues of transition. Reforms are far from complete, particularly as it relates to the former administered cost/price system and the physical nature of decision-making for the forestry sector. Further, the overall decline in economic performance throughout the Russian economy has led to declines in almost all indicators for the sector relative to the previous "normal" levels as of 1989.
 
It is expected that in the near term that domestic prices and costs will continue to be distorted, and hence of limited value in guiding normal economic decision-making about the allocation of resources. Further, the forestry sector is compelled to approach reforms from the vantage point of the existing industry structure and resource conditions. This will mean that structural adjustments will come slowly. This is only part political. The lack of capital investment to modernize and restructure the sector will be a major constraint. The reinvestment of present hard currency earnings within the sector for restructuring are meager, as these earnings are diverted to other purposes. Foreign investment is likewise discouraged by the economic and political uncertainties, as well as the unknown parameters of future policies.
 
It can be expected that the imperfect corrections to the price/cost structure will have an immediate impact on the forestry sector, since the freedom from central control also means that enterprises must become "profitable" - measured by the covering of primary operating costs (variable costs) from their own sources of income. In the short term, the installed industrial capacity (including logging) can be further depreciated, with the appearance of avoiding the significant capital (fixed) costs of operations. Although beyond the period of analysis incorporated in this analysis, the deferral of capital investment will have serious consequences for the sector after the turn of the century. It is also clear that Russia will be torn between two conflicting policies with respect to domestic use of. available forest resources. On the one hand, the large standing inventories of timber represent a "bank account" that can be liquidated as needed to generate desperately needed hard currency. The potential for exploiting the significantly higher valued export markets is a great temptation under the pressing needs of the country at present. However, this factor is offset by the rapidly declining levels of domestic consumption since 1990, and the potentially growing need for forest products to aid in the eventual economic recovery process and future economic development. This means restricting the export of timber in lieu of meeting current and anticipated future domestic requirements.
 
Future Timber Harvests
In terms of harvest, the need to recover variable costs by forest enterprises means that not all "currently accessible" timber can be economically harvested under prevailing (and distorted) prices and costs. The relatively low domestic price for timber means that the ability to cover rising domestic costs is difficult, imposing a constraint on harvest.
 
The scenarios developed in this analysis attempt to mirror the "most likely" conditions through the end of the century, and bracket the most significant potential uncertainties. For the baseline conditions, the economic harvest rate declines to a delivered volume of industrial timber of approximately 250 million cubic meters for Period 1 (1990-1995), in contrast to a 1989 level of some 338 million cubic meters. Due to the presence of existing infrastructure for accessing the forest and the installed production capacity, the share of delivered timber increases for the European-west Siberian region, from 68 percent of the 1989 total to over 76 percent of the projected Period One timber supply. In Period 2 (1996-2000), the delivered supply is projected to decline further, to approximately 244 million cubic meters, with 178 million cubic meters (73 percent) derived from the European-West Siberia region. This slight decline in regional share is due to the continuing depletion of mature timber inventory in the Russian west. Under the Pessimistic scenario, the delivered supply would decline to only 214 million cubic meters, while the most Optimistic forecast for Period 2 would lead to a supply of 338 million cubic meters, just restoring the previous levels of 1989.
 
If firewood is excluded from the delivered commercial supply, but secondary sources (waste, chips and recycled fiber) are included, the total available wood/fiber supply projected from Period 1 is 230 million cubic meters, which includes 185 million cubic meters of roundwood. By region, this supply includes 175 million cubic meters from the European-west Siberian region (76 percent roundwood) and 56 million cubic meters from the Asian-Pacific region (86 percent roundwood). For Period 2, the total wood/fiber supply is 229 million cubic meters under the baseline scenario. with the decline in capital investment, the pessimistic outlook for Period 2 is for a supply of only 203 million cubic meters. Under the optimistic case, Period 2 supply would increase to 341 million cubic meters. The gain over the baseline case represents an increase of 112 million cubic meters, which includes 65 million cubic meters of roundwood, with 40 million cubic meters of this derived from the Asian Pacific region as the inventories in the European-west Siberian region continue to decline. The most important gain under the Optimistic case would be for greater waste paper recovery in the European region, with the equivalent of 37 million cubic meters of waste fiber recovered.
 
The analysis also sought to approximate the likely supply response to long term price/cost reforms based on 1992 international levels. Although higher international prices are an incentive, the reform of domestic costs would clearly discourage production. The results were perhaps surprising, indicating that full price/cost reforms to international levels for Period 2 would result in <an economic timber/fiber supply of only 216 million cubic meters, very close to the Pessimistic case outlook. However, supply would shift slightly to the Asian-Pacific region, where the more abundant timber would offset the higher costs, while the European-west Siberian region would continue to face declining competitiveness due to aging capital structure. If sufficient investment was made in infrastructure to access the "potentially accessible" forest (a factor not assured) the overall supply would increase to 265 million cubic meters, well below the 338 million cubic meters attained in the "pre-reform" period (1989).
 
As an illustrative example, it was further assumed that world real prices would increase by 10 percent in response to growing global timber scarcity. This assumption, with constant (1992) world real costs, lead to an estimate of Russian supply of only 350 million cubic meters, close to the realized volume of 338 million cubic meters for 1989. Conifer supply would approximate 248 million cubic meters, with deciduous supply would be 102 million cubic meters.
 
Full economic reform (to global competitive levels) thus does not significantly improve the comparative advantage of Russia in the absence of increased prices, and only then with substantial capital investment. Russia will continue to struggle to recover to the harvest levels and delivered wood/fiber supply of the centrally planned system (338 million cubic meters) during this century.
 
Allocation of Available Timber/Fiber Supply
The allocation of the available wood/fiber supply will reflect the dual objectives of assuring an "adequate" domestic consumption consistent with overall economic performance (GOP) and internal price/cost reforms and the opposing need for critical foreign hard currency earnings. Assuring domestic consumption (relative to the declining GOP) results in a domestic use of timber of 207 million cubic meters in Period 1, leaving some 22 million cubic meters available as "surplus" for export. In Period 2, domestic consumption (baseline) is estimated as declining to 204 million cubic meters, leaving a slight increase available for export (25 million cubic meters).
 
Under pessimistic assumptions for Period 2, domestic consumption would absorb the entire supply of 203 million cubic meters. However, the analysis suggests that Russian central authorities would sacrifice domestic consumption in order to maintain exports at near present levels of 13 million cubic meters, resulting in a decline in domestic consumption to 190 million cubic meters.
 
Optimistic conditions would lead to a Period 2 domestic consumption of 256 million cubic meters, reflecting recovery of GOP. This growth, together with increased capital investment would allow for total supply to reach 341 million cubic meters, giving an export potential of almost 85 million cubic meters.
 
Domestic Use of Timber/Fiber
Domestic processing of wood/fiber is primarily related to conifer lumber. In 1989, output was 83 million cubic meters, with two-thirds of this in the European region. Projections for Period 1 indicate a significant decline, to approximately 54 million cubic meters of lumber, with conifer lumber accounting for 44 million (mainly non-larch species or 37 million cubic meters). Under optimistic assumptions, lumber production would increase over the baseline, but only to about 68 million cubic meters, still below the 1989 level of 83 million cubic meters.
 
Wood panel production in 1989 was approximately 12 million cubic meters. This is estimated to drop to only 6 million cubic meters in Period 1, and to a maximum of 7.7 million cubic meters in Period 2 under the optimistic case. Pulp and paper production was some 11.4 million metric tons in 1989, with 8.6 million metric tons produced in the European region. Baseline estimates are for a decline to 5.9 million metric tons in Period 1, with 3.5 million metric tons in the European region. For Period 2, production is estimated to range from 3.8 million metric tons (pessimistic) to 7.8 million metric tons (optimistic), with the majority being produced in European region.
 
Export of Roundwood and Wood Products
Export trade by Russia as typically involved the export of unprocessed logs to both the former soviet Republics and China (soft trade), the Pacific Rim (Japan) and Europe for hard currency. While the Pacific Rim trade has been primarily higher quality sawlogs, the hard currency trade with Europe has been primarily lower grade sawlogs and pulpwood.
 
Export trade with the former Soviet Republics was approximately 20 million cubic meters in 1989. Due to economic declines in the Republics (as with Russia), domestic consumption has fallen and hence the need to import conifer logs. Period 1 estimates are that unprocessed exports will decline to 8 million cubic meters, reflecting the Russian desire to maintain the traditional trade relationship with these Republics that are the source of critically needed Russian imports of other goods. In Period 2, exports to the former Republics are estimated to range from 8 million cubic meters to an optimistic level of 17 million cubic meters, a level still below that of 1989.
 
Exports to hard currency markets in Europe and the Pacific Rim were about 16 million cubic meters in 1989. Period 1 estimates are for exports of 13 million cubic meters, with 7 million going to European markets and 6 million to the Pacific Rim. While only 30 percent of European exports are sawlog quality, it is expected that over two-thirds of Pacific Rim exports will be higher grade sawlogs.
 
In Period 2, hard currency exports are estimated to range from a low of 7 million cubic meters (pessimistic) to a high of 29 million cubic meters. The baseline projection for Period 2 is for exports of 13 million cubic meters, representing the Central Government concern for maintaining hard currency sales in spite of the implied shortfall for domestic consumption. European exports would range from 2 to 17 million cubic meters, while Pacific Rim exports range from 5 to 12 million cubic meters.
 
Exports of manufactured wood products are anticipated to remain modest in contrast to unprocessed timber exports. Lumber exports are almost entirely to Europe, with the total estimated at 4.5 million cubic meters total for Period 1 (4.1 million cubic meters to Europe), and ranging from 3.3 to 5.8 million cubic meters for Period 2. Panel exports are likewise modest, estimated at only 0.4 million cubic meters in Period 1 and ranging from 0.3 to 1.9 million cubic meters in Period 2. The majority of panel exports will be to the Former Asian Republics of the Soviet Union rather than to hard currency markets.
 
Future Outlook
Although Russia seeks to utilize the forestry and forest products sector to promote regional economic development and desires to encourage value added production (both for domestic consumption and exports), the current state of industry capacity and the near term problems of gaining hard currency for capital investments will continue to constrain the achievement of these objectives. If (and when) incentives emerge for the reinvestment. of hard currency export earnings and/or a favorable climate for foreign investment is created, it can be expected that the more optimistic outlook described here will be more realistic. However, it remains that even the optimistic outlook barely allows Russia to reach the levels of harvest, production and trade achieved under non-economic central planning in the last half of the 1980 IS. Further development will require Substantial capital investments beyond the levels assumed in the optimistic scenarios in order to develop a competitive sector with an international comparative advantage.
 
Trade of forest products with hard currency trading regions can be expected to continue at levels evident 1n the late 1980's and early 1990's through 1995 (subject to short term cyclic variations).
 
The prospects for wood fiber exports between 1995 and 2000 depend on levels of invested capital, alacrity with which domestic costs and prices rise to world levels, and levels of domestic demand. Exports during 1995 and 2000 will fluctuate between 17 million cubic meters to European markets and 12 million cubic meters to Pacific Asian markets, and 2 million cubic meters to European markets and 5 million cubic meters to Pacific Rim markets. Higher exports are potentially possible should the ties binding Russia to other republics of the former Soviet Union not be as strong as those existing before the break-up of the USSR.
 
Employing the Russian Forest Sector Model, the reasonable bounds for this important sector of the Russian economy have been estimated. The implications are that restructuring and reform have had significant negative impacts to date, but that modest recovery can be anticipated during the balance of this century. However, no major expansions of the sector, or external trade, can be anticipated in the near to medium term. In fact, recovery to the pre-reform levels of the late 1989 will be a substantial challenge as Russia struggles to put reforms in place, and to substitute more market-like resource allocation decision-making for the previous noneconomic central planning approaches.
 
The longer-term outlook for the volume of wood raw material exports to trading regions not belonging to the former Soviet Union is clouded in uncertainty. Rising domestic consumption levels interacting with the physical limits imposed by the forest resource may effectively limit the contribution which Russia could be expected to make to consumption in regions outside of Russia. Longer-term outlook for the volume of wood raw material exports to trading regions not belonging to the former Soviet Union is clouded in uncertainty. Rising domestic consumption levels interacting with the physical limits imposed by the forest resource may effectively limit the contribution which Russia could be expected to make to consumption in regions outside of Russia.

​Highlights:

• U.S. manufacturers who wish to be more competitive in European markets should shift from traditional production-oriented manufacturing of industrial commodity products to more market-oriented production of specific products.
• Opportunities exist for increased U.S. export of value-added wood products to Europe, particularly components for furniture and windows
• U.S. wood manufacturers can improve their image as suppliers of higher value-added products in Europe by learning more about the market, meeting customers' specific demands, and understanding cultural differences dictating how business is conducted.
• German customers are very concerned about consistent dimensions, rapid delivery and consistency in pricing. Italians are particularly interested in long-term relationships with their suppliers, consistent supply, and close customer relations. Industrial end-users in the Netherlands value quality of wood drying, long-term commitments, and close contacts with their suppliers.

U.S. lumber suppliers who wish to be more competitive in European markets must understand the European definition of quality.  Quality is much more than accurate grading.  Other factors like dimension accuracy, consistent supply, and customer service are also very important.  Customers in European countries do hot have the same preferences as U.S. customers.
The objectives of this study have been 1) to investigate how industrial end-users of lumber, importers and agents in Germany, Italy and the Netherlands, define quality, and -2) to present factors that may contribute to the success of American lumber exporters in the European market.
 
U.S. Export of Wood Products to Europe
There was a slight increase in the export of wood products from the United States to Europe during the 1980’s. The European Community (EC) is a very important export market for U.S. sawmills, having imported $1.1 billion of wood products from the U.S. in 1991. Approximately 41 percent of U.S. hardwood lumber exports and 22 percent of softwood lumber exports were shipped to the European Community in 1991.
 
Distribution Channels -
The trend at many-European manufacturers of furniture, cabinets, windows and doors is for fewer, closer wood suppliers. This results in more direct sales and reduced involvement of -intermediaries.  Today approximately 10 percent of softwood lumber and 30 percent of hardwood lumber is imported directly to the industrial end-users, who are primarily larger manufacturers of furniture and windows.
Even if direct sales are a preferred sales strategy, there may be advantages, particularly for small -and mid-size firms in the U.S., in contacting a European intermediary. Agents and importers have an understanding of the culture and the traditions dictating how business is done. They can also help small producers find customers, follow design trends, and deal with complaints.
 
The Swedish Sawmilling Industry
In this project, U.S. export strategies are compared to the strategies practiced by Swedish exporters.
Sweden has for many years exported large quantities of lumber to the countries in the European
Community and therefore has extensive experience in trading in these markets. The European
Community (EC) imports almost 22 percent of its softwood lumber from Sweden compared to four percent from the U.S.
 
Closeness to the market is an advantage Swedish lumber producers have over North American producers.  In today's fast-changing market and with importers and end-users interested in minimizing their inventory, it is crucial to be able to meet orders with short notice, arrange fast shipments and offer just in-time deliveries. Knowledge of the market and a better understanding of the business culture are often mentioned as major differences between Swedish and North American exporters.
 
Perhaps the most important advantage the Swedes enjoy is the long-term relationship they have shared with many of their customers. These old relationships result in loyalty, reliable business relations, and relatively stable prices over business cycles.
 
Opportunities for U.S. Wood Exporters
There is an increased interest in Europe for buying more finished wood products from the United States. European industrial end-users want to be less involved in the primary wood process and spend more time and effort on developing new products, marketing and distribution.
United States hardwood species like cherry, walnut, red alder, oak and ash can be promoted as substitutes for tropical hardwoods in furniture, cabinets, paneling and flooring. U.S. manufacturers also should promote some species and products that are unique to North America, for example, thick and wide dimensions with clear wood from species such as Douglas-fir, red cedar and hemlock. A preferred strategy is to promote products that are less sensitive to price and encourage end-user loyalty to suppliers.
 
Germany
The unification of East and West Germany has increased investment in the repair and remodeling sector. This has resulted in strong demand for wood products such as construction lumber, windows and doors. Although clear solid wood is preferred, glued and finger-jointed products are becoming increasingly accepted due to decline in the quality of lumber imported from both North America and Northern Europe. Preferred North American species are hemlock, Douglas-fir, lodgepole pine, spruce and oak.
The increased activity in the renovation sector has resulted in a higher frequency of special orders and demand for custom-cut components. The do-it-yourself market, which is already the largest in Europe, has also seen an expansion, particularly in eastern Germany. Opportunities also exist for hardwood lumber and components for furniture and flooring.
 
Italy
Imports of semi-finished and customized wood products to Italy are expected to increase, particularly for use in windows and furniture. Italy is one of the largest producers of furniture in the world. Opportunities exist for lumber and components of red oak, red alder, yellow-poplar. walnut, white ash and black cherry.
Old-growth Douglas-fir is the species preferred by many window manufacturers in Italy. However, there is an increased interest in alternative species since the wood quality of Douglas-fir has declined and the price has increased in recent years. Two alternative species of interest are hemlock and red cedar. There is also an increased market for three-layer laminated window stock made from second-generation Douglas Fir and southern yellow pine.
 
The Netherlands
The Dutch Timber Information Centre promotes U.S. species such as Douglas-fir, hemlock, southern yellow pine, red oak and white oak for increased use in such areas as construction, furniture and windows. Because 0.1 bans on use of tropical hardwoods for certain products, U.S. ash, white oak and red oak are increasingly substituted.
With the increasing price for clear wood; acceptance of laminated window stock is growing. Opportunities exist for use of three-layer components from Douglas Fir, western red cedar and hemlock.
 
QUALITY IN EUROPE
"Quality" is a buzzword often used by marketers of forest products today, especially if there are plans for expanding sales to the European market. It is important to remember that customers in Europe do not have the same preferences as U.S. customers. Before spending too much time and effort on advertising and promotion overseas, it is crucial for U.S. wood suppliers to understand how Europeans define quality': For European wood users; quality stands for a synergism between wood quality, manufacturing quality and quality of service.
 
German customers of lumber and wood components are very concerned about consistent dimensions, rapid delivery and consistency in pricing. Germans also desire that imported wood originates from sustainably-managed forests. Italians are particularly interested in long-term relationships with their suppliers, consistent supply, and close customer relations; Industrial end-users in the Netherlands value quality of wood drying, long-term commitments, and close contacts with their suppliers. The large fluctuations in exchange rates between. the guilder and the dollar are a major Dutch concern.
 
ADVANTAGES FOR PACIFIC NORTHWEST MANUFACTURERS
Manufacturers in the U.S. have higher labor costs than many other countries now producing commodity lumber. In order to be more competitive, U.S. manufacturers should therefore concentrate on manufacturing value-added products of high quality. Low-quality products and bulk-type producti6n can be made less expensively in other countries with lower salaries. Today, Pacific Northwest wood manufacturers have some advantages over their Scandinavian counterparts. These include lower labor costs1 lower raw-material costs, larger logs, larger components of 6lear wood and a greater variety of species.
 
ENTERING THE EUROPEAN MARKET
U.S. wood manufacturers can change their image in Europe by learning more about the market, meeting the customers' specific demands, and understanding the cultural differences dictating how business is conducted. It will take some time and effort in traveling to meet the customers and determine their specific needs. lt rnay also be necessary to invest in new equipment.
 
Some important key issues U.S. manufacturers should consider when exporting to Europe are:
 
Try to develop a strong relationship with the industrial end-user.
 
Look to the European market as a long-term investment, not a market to turn to when the U.S. economy
is down.
 
Develop a long-term strategy to seek loyal customers rather than always trying to sell at highest price.
 
Promote products that are less sensitive to price and encourage end-users to be loyal to their supplier.
 
Concentrate on a few markets and customers, create a healthy niche, then try to service them well.
 
Ensure a high quality of drying, as this is very important to European customers.
 
Sort the lumber according to customer demands. Better sorting requires relatively tittle extra effort.
 
EXPORTING TO EURQPE
 
Even though Europe will be a single market ft would be a mistake to adhere to a single "European" marketing strategy. To be successful in this large market, ft is necessary to have a country-specific marketing strategy. Each country will continue to have specific product demands, design trends, and cultural differences dictating how business is conducted. These differences will not be significantly altered by the European integration.
 
To be more successful in the European market, U.S. manufacturers can change strategy from traditional production-oriented manufacturing of industrial commodity products to more market oriented production of specific products. There will be a large demand for wood components in Europe in the future. Increased export opportunities exist for U.S. manufacturers if they can define quality and adjust to new market conditions.
 

​Summary
The Pacific Northwest has traditionally been a strong participant in international forest products markets in the Pacific Rim.  The combination of a substantial resource base, processing capabilities to manufacture high quality timber products and export facilities have contributed to a comparative advantage in the export of wood and wood products.  The region has been able to maintain its comparative advantage, and hence its market share in the Pacific Rim at a time when other U.S. regions, notably the South, have successfully increased domestic market share.
Recent environmental legislation has reduced the timber resource base substantially and will impact the management of additional areas.  A 44 percent decline in timber sales volume in 1989 will result in an annual 9.7 million cubic meters (2.0 billion board feet) reduction by 1995 in public timber harvest.  As a consequence, public timber revenues will deadline and there will be higher relative sawlog cost to both domestic and foreign purchasers of timber produced in the region.  The 75 percent log export restriction by the state of Washington will lower these costs for domestic mills, but increase them further log foreign purchasers.  The reduced timber harvest and trade restriction will also diminish the export value of logs and finished products originating from the region.  Hence, the region's comparative advantage and market share will decline as other regions will become more competitive with the Pacific Northwest in forest products trade.
Specific measures of these impacts associated with a 2 billion board feet reduction in public timber harvests are:
1)  The decline in timber sales volume from public lands reduces public timber receipts by$176 million (in 1988 dollars) in 1995 and reaches $188 million in 2000.  The total revenue decline for the public sector amounts to $1.9 billion d6llars for the 11 year period (1989-2000).
2)  The reduction in timber sales volume from public lands in the PNW region leads to increased log production from overseas producers.  Other producers offset nearly 90 percent of the timber reduction in the public sector.  Over half of the harvest reduction is made up overseas in only two years.  The private sector in the PNW region is unable to effectively increase the share of the log market.  Harvests from the private sector in the region begin to decline in 1993.  By 2000 timber harvest from the private sector in the PNW is only ten percent of the contribution by other regions.
3)  The impact on sawlog costs for the sawnwood and plywood sectors is substantial.  A 9.7 million cubic meter reduction in public timber harvest will increase annual log costs by $1 billion in 1995 and 2000 on a global basis.  Log costs in 1995 in the PNW region will increase $211 million compared to $63 million for the South and $34 million for Canada.  A similar pattern is observed in 2000.  In Japan, the impact of reduced timber supply increases log cost by $131 million in 1995 and $90 million in 2000.  Log cost impacts in 2000 are lower as Japan adjusts to the decrease in public timber harvests.  The price increase for sawlog will allow marginal softwood log producers to harvest more logs.  The substitution of hardwood logs for softwoods can also be expected in regions where technological and economic constraints are not binding.
4)  The impacts on profits for sawmills and plywood mills are also substantial and regionally distributed. Profits in the U.S. West decline in 1995 by $79 million.  There are only modest gains in profits in the South:  $7.4 million.  In 1995, Canada increases its profit in the sawmill industry by $84 million.  The decline in profits in 2000 for the U.S. West is $60 million, while the South's profit increase by $1 .3 million.  Canada, by 2000 increases its profits in the sawmill industry by $90 million.  Japan's sawmill industry sees a decline in profits of $77 million in 1995 and $32 million in 2000.
5)  In the export markets, the value of U.S. log exports declines by $152 million in 1995 and$168 million in 2000.  Globally, the value of log exports decreases by $75 and $83 million in 1995 and 2000 respectively. Nearly one quarter of 'the decline in U.S. log export value is recovered by Chile and New Zealand during this period.  In the sawnwood markets, the decline in value of coniferous sawnwood is matched by an increase in export value from Canada.  The value sawnwood exports by U.S. West is reduced $135 million and $246 million in 1995 and 2000, respectively.  Canada increases its export value of sawnwood by $152 and $205 million in 1995 and 2000 respectively.  In the plywood sector, the U.S. West experiences a decline in export value of $45 million in 1995 and 2000, while the U.S. South increases its export value by $57 and $58 million in 1995 and 2000 respectively.
6)  The diminished supply of timber in the region will reduce lumber and plywood production globally and increase the prices of finished product.  Globally the cost to consumers in increased lumber and plywood prices is $849 million in 1995 and $904 million in 2000.  For the U.S., the consumer costs are $161 million in 1995 and $198 million in 2000.  The price increase for lumber and plywood will promote greater non-wood substitution as end users will prefer new technologies that incorporate less wood inputs on the basis of factor cost.
While policies that promote the conservation of forest resources for non-timber outputs are likely to be successful within the regions in which they are implemented, allowing the region to achieve a higher environmental standard, the impacts of reduced timber harvests will increase timber output pressure on forest resources in other regions and other forests within the region and allow non-wood resources potentially more damaging to the environment to substitute for the wood-based items.  The overseas regions that increase their timber outputs do not maintain their forest resources under a sustainable management regime, forest productivity and forest area will decline bringing into question the overall environmental gains achieved with conservation efforts in the Pacific Northwest.  In effect, imposing a single regional environmental policy only shifts the environmental benefits from one region to another -- old growth forest area will stabilize in the Pacific Northwest, but forest area and productivity in other regions will fall.  When evaluated globally, the environmental benefits of such a trade-off may be negative:  restricting the use of renewable forest resources in one region may produce a negative environmental impact globally.
The study demonstrates the globalization of specific Pacific Northwest harvest constraints and illustrates the need for a better understanding of the environmental benefits which the forest products industry can provide on a global level.  Allowing timber production to take place in regions where sustainable management is more likely to be successful will increase the comparative advantage of forest products versus non-wood substitutes, as well as maximizing environmental benefits within a global context.  The present study is a first step in demonstrating these benefits.  An extension of the present analysis will quantify the environmental effects with the appropriate linkages between forest products production and trade and the production of environmental by-products.
 

​Executive Summary
The purpose of this study was to examine the prospects and opportunities for expansion of market pulp exports from Alaska. The focus was on opportunities for the addition or new capacity and expansion of exports in grades not now produced.  We provide a brief overview of the existing industry in Alaska, its historical development, the characteristics of its facilities, sources of raw materials, and its financial problems. And we provide a view of the potential markets for expanded pulp exports by grade, the likely competition to be faced by Alaskan producers, and the comparative cost position of Alaskan mills vis a vis other regions. Certain conclusions emerge.
It seems likely that expanded market pulp exports from Alaska will find their principal markets around the Pacific Rim and particularly in the developed or emerging countries of Asia. There is potential for continued growth in pulp demand in the region.  Given constraints on domestic fiber supplies, environmental and cost considerations in domestic pulp production, and continued strong growth in domestic paper and board consumption, Asian demands for pulp imports will likely continue to grow similarly to recent historical trends.  Japan will be the source of most of this growth.  Both FAO and IIASA projections suggest for Asia as a whole that this increase by 2000 could be as much as twice the current pulp imports.  For Asia this would amount to imports totaling some 2.0 million metric tons.
A new Alaska mill will produce long-fiber pulp in direct competition with existing major producers in British Columbia and the U.S. Pacific Northwest.  Current trends in capacity expansion and the projections of both FAO and IIASA indicate that these regions will continue to figure prominently in Pacific Rim and specifically Asian pulp markets.  If the IIASA projections are correct, however, rising wood costs could push the U.S. Pacific Coast into the role of marginal producer, with the bulk of export growth going to British Columbia. It is also clear that Chile and, to a lesser extent, New Zealand are likely to capture growing shares of this trade. And Brazil will be mounting a major effort to substitute its short-fiber pulps for traditional coniferous grades. Both the IIASA and FAO projections suggest that Brazil will have some success in this venture.  Cost competition will be keen in this market, particularly within light of the prospect of constant or only limited growth in real pulp prices.
Given the substantial cost advantages of South American producers, a minimum condition for a successful Alaska expansion will be the ability to deliver its product in Asian markets at costs at least as low as those in the Pacific Northwest and British Columbia.  We are unable, however, to identify any particular cost advantage for an Alaska mill relative to its closest potential competitors in western North America. Our analysis examined both a traditional bleached kraft mill and a smaller, high yield, thermo-mechanical pulp (TMP) mill.  In either case, an Alaska mill seems to face cost problems across the full range of inputs, with major disadvantages in wood, labor, energy, and construction costs.  The cost disadvantage is even greater when compared to the U.S. South or major Latin American producers.  Thus, although a market may exist, it is not immediately obvious that Alaska is in a position to pursue some share of it.
These results should he viewed only as broad indicators.  Given the time and resource constraints of the present study, we have relied exclusively on secondary and published data to support our analysis.  A far more detailed and specific study of both the market and cost sides is needed to reach a definitive conclusion on any particular project.  Three items merit specific mention for further study:
1.  There is a strong need for close attention to resource and capacity developments in the southern hemisphere.  The rapid growth of plantation-based mills in South Africa, New Zealand, and South America has dramatically changed the nature of competition in the global market for pulp in the past two decades.  In sharp contrast to the dependence in western North America on natural forests, this resource base was designed and grown to meet mill requirements.  The mills operate with considerable advantages in wood costs relative to mills in the northern hemisphere using fiber from natural stands.
2.  Previous studies note the potential attractiveness of a TMP mill on the basis of lower capital costs, lower environmental impacts, higher pulp yield, ability to tailor pulp characteristics to specific customer needs, and so forth.  High-yield pulping technology has been developing rapidly and is characterized by considerable flexibility in its adaptation to specific resource and market conditions. Detailed analysis may reveal opportunities for targeting particularly high-valued markets, reducing energy and wood costs through technical adaptations, or lowering transport costs through pooled shipping arrangements with existing pulp facilities.  As a consequence, this option would seem to warrant close and continuing evaluation.
3.  A final key item relates to the cost and availability of wood fiber.  In our analysis, we have identified Alaska as a region of pulp production that is relatively high in wood cost, owing in part to high costs of logging and transport of logs and chips.  Though our estimates are admittedly crude, this is a crucial concern, because wood is the main variable input cost in production (outside Latin America).  At the same time, it is evident that the bulk of wood supplies to a new mill in Alaska must come from the National Forest and that the Forest Service is under intense pressure to limit both current and future harvest levels.  These circumstances seem to warrant a thorough analysis of prospective future wood supplies and costs under several assumptions about prospective Agency policies and levels of operation of existing log, lumber, and pulping facilities.
This study was undertaken through a grant from the USDA, Forest Service, Pacific Northwest Research Station and the Center for International Trade in Forest Products at the University of Washington. The report, part of a larger study of Alaska forest resource opportunities, was completed in 1989.  The trends noted in the study have continued and the conclusions, based on data available at the time, remain valid.
 

​Executive Summary
International trade in sawlogs and veneer logs is concentrated in the Pacific Rim.  According to world forestry statistics (Food and Agricultural Organization of the United Nations, 1989), Japan, the People’s Republic of China, Taiwan, and South Korea accounted for 72% of the world imports of sawlogs and veneer logs in 1987.  The volume of world trade in coniferous logs and nonconiferous logs is roughly equivalent, as is the coniferous-nonconiferous import mix for these countries as a whole.
The Soviet Union plays a critical role in the Pacific Rim market for coniferous logs.  The Soviet Union accounted for 25% of Japanese coniferous log imports in 1987 and 41% of Chinese imports.  Japan is the principal market:  Just over 5mm m3 were exported to Japan in 1986 and 1987.  The peak year for Soviet coniferous sawlog exports to Japan occurred in 1978 when shipments totaled 7.9mm m3.  The recent decline in the volume of Soviet sawlog exports to Japan may be explained by a reduction in total Japanese coniferous sawlog imports, and more importantly, by the growth of the Chinese market for softwood sawlogs.  The Soviet Union exported 2.5 mm m3 to China in 1987.
The Soviet Union exported 9.0 mm m3 of sawlogs in 1987, slightly below the 9.2 mm m3 exported in the 1986 peak, and on a par with the previous peak of 9.4 mm m3 in both 1977 and 1978 (Foreign Trade Statistics of the USSR, various years).  Because Japan and China are the primary destinations, the vast majority of sawlog exports originate from the Eastern Soviet Union.  Although Eastern Siberia makes a significant contribution to these export totals, the Far East is the dominant supplier and will continue to be in the future.  Data on log exports for the early 1970s suggest that the Far East originated over 80% of the volume destined for the Pacific Rim (based on data from Barr, 1989).  It is likely that the Far East has experienced a small decrease in its share in recent years due to the increasing importance of the Chinese market, and the resulting improvement in Eastern Siberia’s competitive position.
Potential Timber production in the Soviet Far East is enormous.  The Far East accounts for 33.5% of the Soviet forest land, and 31.4% of the stock of mature coniferous trees.  The 1983 Far Eastern growing stock volume of 20.7 billion m3 (bm3) is similar to the timber volume in the entire U.S. (21.4 bm3 in 1986 (Haynes, 1988)), or in Canada (23.1 bm3 in 1986 (Canadian Forestry Service, 1988)).
How much timber will the Soviet Far East supply to the Pacific Rim in the future:  This paper addresses this complex question by examining a wide array of relevant issues such as timber inventory, timber availability, institutional factors, environmental constraints, infrastructure, labor and capital availability, and domestic consumption needs.  We conclude that increases in future log exports are likely to be quite limited.  While lack of infrastructure and labor and capital shortages pose important problems, these are secondary to constraints on timber availability.  Although the Soviet Far East has vast timber reserves, economic conditions, environmental restrictions, and institutional factors limit the possibilities for additional harvesting.
 
 

​Abstract
Congress is considering two legislative changes affecting softwood log exports from the West.  One would drop the ban on exports from Federal lands.  The other would permit States to embargo exports of logs from State-owned lands.
Lifting the ban on federal log exports would increase exports about ten percent, or about 430 million board feet (bd. Ft.) annually.  High-grade (old growth) shipments would increase about 630 million bd. Ft., while lower-graded log exports would decline about 200 million bd. ft.
Halting exports from State-owned lands would suppress log exports about ten percent.  High-grade log exports would decline to a rate of about 400 million bd. ft. per year, with little change in lower-grade shipments.
Upper-grade log prices would change significantly under either proposal.  Under the first plan, export prices of high-grade logs would drop about $100 per thousand bd. ft. (Mbf), with domestic logs in these grades rising about $100 per Mbf within the region.  Price effects on lower grades would be negligible.  If exports of State logs were halted, export prices of high-grade logs would rise about $150 per Mbf; domestic log prices in the same grades would decrease by about $50 per Mbf, and lower-grade log prices would be largely unaffected.
Direct employment in the timber industry would decline by about 375 persons under the federal-log plan; it would increase by about 700 positions with the State-log proposal.
Some economic effects would take years to be felt fully.  Either policy might induce early speculative demand that would fade.  Changes in mill capacity would occur to meet declining (federal-log policy) or rising (State-log plan) demand for high-grade lumber and veneer.  In addition, either plan would change product lines and, perhaps, marketing channels.

Introduction
This study was done to explore the possibility of exporting charcoal from the Seward, Alaska area.  In investigating any product’s market feasibility, three general cost areas are examined: Production, Transportation, Marketing and Selling.  While all three areas are of importance, the purpose of this marketing paper relates only to transportation and marketing. To give a clear picture of issues involved with charcoal marketing, this report is broken into four main sections.

1. The first section looks at market uses and prices of charcoal in countries of the Pacific Rim, which are separated into net importers and net exporters.  Net importers represent potential markets and net exporters form the competition.
   
2. The second section of the analysis is developed from interviews of charcoal producers in the United States.  The status of current U.S. charcoal exports and product and marketing strategies are discussed.
   
3. The third part of the report provides a detailed transportation cost breakdown.  Different transportation methods, modes and carriers were investigated.
   
4. The fourth part summarizes the three main market potentials.
   

​

​This report presents the results of an investigation into softwood lumber grading systems used in Europe with an emphasis on systems used, or proposed, for international trade transactions.  The report also presents comparisons and approximate cross-references of these systems with North American grades.  This involves the use of previously published comparisons as well as new material developed during the course of this study.  The study also briefly examines the nature of the European softwood lumber market and its future prospects.  The information presented in this study represents a step in the direction of improving the North American manufacturer’s understanding of Europe.
 
The information contained in this report relied principally on a search of available literature in the University of Washington Library system, reports sent in response to out letters to various European testing and research organizations, and conversations with representatives of the American Plywood Association and Western Wood Products Association.  Consequently, interpretations regarding historical background and current status of lumber grading practices in Europe may be limited by not having the opportunity to observe practices first hand or to converse with firms heavily involved in European trade.  It is believed that the information contained in this report is a fairly accurate description of major events and combined with the grade cross-reference will be useful to North American producers.