1. CANFOR Export Project

2. Agenda 1.Objective 2.Company overview 3.Potential wood demand in China 4.Competitive advantage 5.Possible constraints

3. Objective Due to current events and new regulations, this project focuses on the growing market of lumber exports to China.

4. Company Overview

5.  Canadian company based in Vancouver, British Columbia.  Marketing offices present worldwide.  Major business units.  Wood Products  Pulp products  Pulp and specialty kraft paper  Coastal operations

6. Company Overview  Mission  Profit + Planet + People  Corporate pillars

7. Company Overview  Differentiation with a strong vision in sustainability  Sustainable forest management certifications.  Forests licenses.

8. Potential wood demand in China

9.  Chinese housing market.  Current housing situation.

10. Potential wood demand in China  Chinese housing market.  Current housing situation.

11. Potential wood demand in China  Current figures

12. Potential wood demand in China  Market forecast

13. Potential wood demand in China  Chinese housing market.  Definitions  Short History

14. Potential wood demand in China  State of affairs wood imports  Wood and lumber imported by China from Canada 20042005200620072008 Chinese Imports of cork and Wood in $US Million $4,262.1$4,923.9$5,790.8$7,331.5$9,178.1 (000’s USD)20042005200620072008 China 93,31392,264102,616146,282207,444 Others 13,946,31812,759,13011,223,5958,787,4576,169,857 Total 14,039,63112,851,39411,326,2108,933,7396,377,301

15. Competitive advantage

16.  Over international competitors  Canadian lumber perceived as a high quality product (smoother, cleaner, and can be reused).  Over national competitors  Long-term forest tenure agreements with the 3 provinces.

17. Competitive advantage  Overall  Production capacity.  “Responsible” supplier.  Third-party sustainable forest management certification strategy.  Worldwide presence of sales offices.  High-skilled labor – patented products (Silvastar®).  Distinctive supply chain management.

18. Competitive advantage  Overall  Locations of operations.

19. Competitive advantage  Overall  Wide product portfolio.

20. Possible constraints

21. China Import Volume (m 3 )China Import Price (US$) Source: UN comtrade Possible constraints

22.  Uncertainty on Russian export tax schedule.  Uncertainty on Canadian exports restriction  Different product classification and dimension  Trade cost and price disadvantage

23. Possible constraints  Uncertainties on supply.  Foreign exchange exposure and risk  Uncertainties on market acceptance.

24. Ease of doing business in China Possible constraints

25.  Culture difference and development separation  Political coldness

26. Conclusion

27. Q&A