1. China Experience Presented by : Chris Sutton, Director James Latham plc

2. The Business  2006/2007 - £99.6 million turnover  Wood based panel products (sheet materials), hardwood, hardwood flooring, softwood  10 companies operating from 9 strategically placed distribution facilities across the UK

3. Trade Bodies & Certification

4. Statistics  Imports of hardwood plywood by major supplying countries January – March 2007  China – 44.9% *  Malaysia – 24.0%  Brazil – 9.0% * 2006 22.1%  Lathams Ltd sale of panel products 2006/2007  a) 175,000m 3 Total  b) 20,000m 3 Hardwood plywood  = 11.437%  C 2,250m 3 Chinese plywood = 1.29% of a) = 11.25% of b)

5. Certified Products Panels> Plywood> Particleboard> MDF > Fibreboard> OSB > Door Blanks > Worktops > Blockboard Timber> Softwood> Hardwood > Decking > Flooring

6. China Why ?  They make competitively priced products! Our Criteria  Minimum legally verified  Glue lines to EN Standards  CE Marking  Face & back grading to our requirements  Clear marking for country of origin

7. China What We Have Done & Where are we Now?  Visited 3 time in 12 months  Identified mills we wish to work with and most importantly, we can trust  Laid down our minimum criteria

8. China Case Studies Mill 1  Using domestic plantation specie (DPS), such as Paulownia for faces  Using domestic Poplar for cores  Obtained certificates stating right to log, providing 2 nd party certificates Mill 2  Using Eucalyptus veneers grown in Guangzhou area for cores  Mills working with tropical forest trust to attain full FSC certification for forest  Use controlled wood face veneers from Malaysia or Sabah

9. China The Issues  Most Chinese mills like to say yes!  Some UK buyers encourage misrepresentation  Most Chinese mills have a lack of understanding regarding certification  Volume of certified wood being sold probably exceeds volume actually available  Mills achieve a premium for selling certified products  Rising costs encourage misrepresentation  Use of allegedly illegal imported logs

10. China The Way Forward  Work through TTF & TFT  Dialogue with Chinese trade bodies and local Government  Dialogue with Chinese mills  Explain the certification process to mills  Improve the auditing system  Stamp out use of illegal logs

11. China Summary  Chinese government are working to develop an improved forestry programme  Some mills want to work towards and achieve genuine third party certification  Policing by UK certification bodies  We should work in partnership to achieve our mutual goals