Wood Market Trends in Japan - Forum

Transcription

10. Internationales Holzbau-Forum 2004
Wood Market Trends in Japan
Christopher Gaston
Dr. Director, Markets and
Economics
Forintek Canada Corp.
Vancouver, British Columbia
Canada
Aktuelle Studie über den Fertighausmarkt Japan
Analisi attuale del mercato delle case
prefabbricate in Giappone
document in english
1
2
1 Introduction
Japan remains the single most important offshore market for the North American wood products industry. Yet many of the competitive advantages that N.A. has enjoyed as the premier
supplier have been challenged, focused around a number of identifiable trends in demand and
supply (market share shifts shown in Figure 1). Based on an upcoming publication by Gaston,
Cohen and Eastin (Wood Market Trends in Japan—2004 Edition), this presentation summarizes these trends and identifies the challenges and opportunities for wood product suppliers to
Japan.
12,000,000
Cubic Metres
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
1993
1994
1995
Canada
US
1996
1997
Chile
NZ
1998
1999
Russia
2000
2001
Scandinavia
2002
2003
Other
Figure 1: Japan imports of softwood lumber
2 Strengthening of the yen against N.A. currencies
In the 1970s, the Yen per U.S. or Canadian dollar was trading around 350. By 2000, this had
declined to 75 yen per $CDN and 105 yen per $US, which meant that Japanese buyers were
paying less in real (inflation adjusted) yen for virtually any wood commodity in 2000 than they
were three decades earlier!
From 2000 to present, the yen has stayed relatively constant against the U.S. dollar (with a
short-term peak in 2002) and weakened modestly against the Canadian dollar. More importantly, the yen against the Euro has weakened significantly (Figure 2). Given the strong U.S.
demand for wood products over these years, however, this has not lead to a significant increase in North American wood product share to Japan (to date).
¥150.00
Monthly Exchange Rate
¥/Euro
¥130.00
¥/$US
¥110.00
¥/$Can
¥90.00
¥70.00
Sep-04
Jan-04
May-04
Sep-03
May-03
Jan-03
Sep-02
May-02
Jan-02
Sep-01
Jan-01
May-01
Sep-00
May-00
Jan-00
¥50.00
Figure 2: Japanese exchange rates
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3 Increased demand for housing performance and
longevity
Stimulated by the Kobe earthquake of 1995, Japan began valuing wood and wood structures
for performance in addition to aesthetic values. In fact, the average life span of a single family
detached wood home in Japan in the 1990s was only 25 years or so, compared to recent market research suggesting a desire for 55 years. This is a significant change, both in the type of
wood products and systems being demanded in Japan, and in the expected increases in future
repair and renovation activity (which has historically been very low). This trend leads to, or is
related to, many of the trends which are discussed below.
4 Japan’s aging population stimulates “healthy house”
As of 2003, 19% of Japanese people were reported to be aged 65 and over, making Japan one
of the most aged societies in the world (Figure 3). This has tremendous implications via the
need for more seniors’ housing (both single and multi-family), barrier-free and with the need for
second, smaller kitchens and bathrooms. It also stimulates the demand for higher air-quality
inside the house, leading to low formaldehyde panels and engineered wood products, as well
as ready to assemble solid and composite flooring in place of carpeting.
Figure 3: Age structure in Japan
5 Western-style housing remains strong
There is no question that housing is the single most important demand driver for wood products in Japan. In fact Japan is the third largest user of wood-based single-family homes after
the U.S. and Canada (Figure 4).
Most of these wood structures are of a “post & beam” system, both traditional and modern in
architecture. Due in part to Canadian promotional efforts and their performance in Japan’s
Kobe earthquake, the North American platform-frame system (termed 2x4 in Japan) has gained strong popularity, as emphasized in Figure 5. This has translated into a demand for N.A.
sized structural lumber, sheathing, and for “western” value-added products such as doors, windows and furniture.
4
p
g
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
2x4
P&B
Total Starts
Figure 4: Japanese housing starts
100,000
18%
90,000
16%
80,000
14%
70,000
12%
60,000
10%
50,000
8%
40,000
6%
30,000
20,000
4%
10,000
2%
0%
0
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
2x4
2x4 percent of all wood
Figure 5: Japanese platform-frame housing starts
6 Post & beam construction largely moved to “pre-cut”
An aging and diminishing skilled labour force necessitated the move toward prefabricated
automation. With North American platform-frame construction, this has meant a move toward
prefabricated wall panels, and to a lesser degree, floor and roof systems. With post & beam
construction this has meant the adoption of the so called “pre-cut” component system, where
the detailed joinery system typical of post & beam connections are pre-manufactured in a factory setting (utilizing CNC router technology), and packaged for on-site use (Figure 6). Well
over 300,000 homes erected annually in Japan are utilizing structural components sourced
from pre-cut facilities today, representing about 75% of the post & beam market.
The transformation away from on-site construction has all but eliminated the demand for green
lumber. Given that Japan has found itself short of needed kiln drying capacity to meet its domestic needs, this has reinforced the demand for imports of kiln dried dimension lumber, including lamstock for domestic glulam production.
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Figure 6: Example of Japanese pre-cut post & beam components
7 Post & beam construction continues to move to
engineered wood products
To date, engineered wood products in Japan mostly means laminated lumber, and in particular
glulam. Strengthened by the previous trend of prefabrication and the need for kiln dried
products, large dimension solid and dried members are reserved for the high-end of the market, with glulam now commonplace in the majority of post & beam structures.
1,200,000
1,200,000
1,000,000
1,000,000
800,000
800,000
Cubic Metres
Cubic Metres
Again, given Japan’s inadequate drying capacity, this has translated into a strong demand for
first glulam imports and them lamstock imports. While the volume of the latter are difficult to
gauge as they are recorded under “softwood lumber” import statistics, glulam imports are reported to be growing as shown in Figure 7. Note that Japan uses laminated lumber in both
structural and non-structural applications (the latter typically laminated veneer lumber). The
premier supplier of hardwood laminated lumber is the South Seas and China/other SE Asia,
with Scandinavia, Germany, and Austria dominating softwood laminated lumber supply.
600,000
400,000
400,000
200,000
200,000
0
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Non-Structural
Structural
Figure 7: Japanese imports of laminated lumber
6
600,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Canada
US
NZ
South Seas
Scandinavia
Other
8 “Hybrid” construction becomes established
Hybrid construction can take many forms. The first is a hybrid of construction techniques, mixing post & beam with platform-frame. This is the most common in Japan, including the sheathing post & beam structures with plywood, the use of metal connectors in place of traditional
joinery, earthquake tie-downs, addition of non-structural interior studs for ease of later renovations, and so on (see Figure 8). The second type of hybrid, and still in its infancy in Japan, is
mixed materials (such as concrete ground floor and wood-frame upper floors) and mixed use
(commercial with residential). These are being addressed in the Japanese building codes and
are expected to increase in the near future.
Figure 8: Examples of "hybrid" construction in Japan
9 Housing styles increase in diversity
Until the end of World War II, the extended family was commonplace in Japan, consisting of
three generations (grandparents, parents and children) living under one roof, often along with
various uncles, cousins and so on. The average number of persons per household had remained constant at about 5 for over 50 years. However, after the war the nuclear family, consisting of one set of parents and their children, was promoted as the official government policy.
The average number of people per household declined continuously from 1955 onward, and by
2002 there were less than 2.75.
However, while many Japanese adopted the nuclear family structure, during the past 15 years
there has been a resurgence to a modified extended family - the expanded family - where three
generations once again live under the same roof. Unlike the extended family, the elderly retain
independence, and the house is much like an internal duplex. In 2002, 4.6 million households
had three generations living in them, representing over 10% of all occupied houses in Japan
(Figure 9).
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1950
Extended
hierarchical
multi-generational
paternalistic
group focus
royal lineage
resists change
open house design
multi purpose rooms
1990
Nuclear
21st Century
Expanded Family
3 + generations
privacy + group
caregiver & baby sitter
y Financial base
self contained floors
(interior duplex)
universal design
elderly
modular
two generations
focus on individual
privacy important
promotes change
personal power
separate rooms in house
single purpose rooms
Figure 9: Japan's evolution of family structure
This has translated into the demand for a new mix of housing styles: traditional and modern
post & beam structures, larger (often three story) homes suitable for independent space for
multi-generations, smaller, single elderly couple appropriate living spaces (high-end apartments), and an increased demand for mid-end, affordable quality / built for sale homes. The
latter is particularly appealing to the “echo-baby boomers”, and is often in platform-frame.
10 Government regulation in housing increases
Staring with the new Building Standars Law, and the associated Housing Quality Assurance
Law of 2000, the trend emerged of government becoming more involved in the regulation of
housing. Regulations which initially applied to only platform-frame construction now extent to
post & beam. Most of these regulations, including the so-called performance indicators have
been designed to protect the homeowner. Interstingly, this has led to homebuilders to market
their homes on the basis of these indicators, and even to have them warannty their homes for
up to 25 years, subject to inspections and repair & renovations done by contract.
Regulations have most recently focused on indoor air quality, particularly regarding formaldahyde emmission tollerences. Even more recently, govenernment is proposing regulations related to green space requirements, with the Ministry of Land, Infrastructure and Transport
(MLIT) proposing legislation to ensure that space will be provided for gardens (including rooftop), totalling 25% of the total building lot size.
11 Increased repair & renovation demand
As mentioned earlier, the live expectance of a single-family home is double today from the
roughly 25 years of less than a decade ago. While there remains a large stock of homes that
are in need of replacement, this is leading to an increase in demand for repair & renovation
(termed “reform”) products and services. This trend is expected to continue in the future, fed
not only by the desire for home longevity, but also by performance expectations and more
price-conscious homeowners (Figure 10).
The four most common repair & renovation projects in Japan are kitchen 23%, bathroom
(19%), room additions (12%) and exterior (12%) (Center for International Trade in Forest Products, 2004). This trend could lead to increased demand for flooring, doors/windows, cabinets,
moldings, structural, outdoor and other value-added wood products.
8
Annual Reform Spending (Billion yen
12
10
8
6
4
2
0
1996
1997
1998
1999
2000
2001
2002
2005
2010
2015
2020
Figure 10: Repair & renovation spending in Japan
12 Secondary wood product demand remains strong
Japan has consistently preferred wood products over other materials for furniture and interior
finish (Figure 11). Even in flooring, which has been dominated by composites, growth in solid
wood has been significant in recent years.
Three trends are important to note for this market segment. First, unlike North America, the
Japanese homeowner continues to value light coloured species and finishes for interior applications, offering a market beyond traditional hardwoods such as oak. Second, the demand for
outdoor products such as decking, patio furniture, fencing, etc., continues to grow. Finally, cost
consciousness is prompting substitution of lower cost components in manufacture, such as
using edge-glued panels instead of solid wood (Figure 12). This has also led to increased
sourcing of wood components from China.
Figure 11: Homeowner preferences for materials used in interior finish
(Cohen and Gaston, 2000)
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Figure 12: Example of edge-glued panels
for decorative use
13 Consumers become more price sensitive
Evidence of the growing price conciousness of Japanese specifiers is abound, including the
choice of engineered wood post and beams over solid dried, the use of edge-glued panels in
finish applicaions over solid wood, and the growing outsourcing of components and products to
China. Even in structural lumber purchases for platform-frame construction, there is a noted
trend away from the purchase of J-grade to lower, less expensive lumber grades.
There are a number of reasons which contibute to this trend. The most obvious is the economic recession of the mid 1990s. Further, over the past four years, there has been an ongoing
drop in the consumber price index (Figure 13), leaving consumers in the position of wanting to
put off purchases with the belief that everything will be even less expensive next year. Even
more important to the primary driver of wood product demand (housing), land prices began a
year-to-year decline from the early 1990s to date (Figure 14). For the first time in recent history
in Japan, this lead to the house being considered something other than a disposable good. As
in North America and Europe, the house (as opposed to only the land) became viewed as an
investment, something of lasting value. This even led to a before unforseen phenominon in
Japan - a secondary housing market.
CPI Change %)
3.0
2.0
1.0
0.0
-1.0
-2.0
Figure 13: Japan consumer price index (percent change)
10
2004-1
2003-3
2003-1
2002-3
2002-1
2001-3
2001-1
2000-3
2000-1
1999-3
1999-1
1998-3
1998-1
1997-3
1997-1
-3.0
Land Value 1987=100
160
140
120
100
80
60
40
20
2002
1999
1996
1993
1990
1987
1984
1981
1978
1975
1972
1969
1966
1963
1960
0
Figure 14: Japan land price index
14 Adapting to the emergence of China
With Japan’s shortage of workers and its growing price conciousness, the emergence of China
a major world wood products suppier was a natural for consumption, outsourcing and joint ventures. This has become so prevalent, in fact, that any wood product supplier to Japan will likely
have to consider China as part of the suppy chain. Evidence of this can be seen from structural
to finished apperance prducts, illustrated in Figure 15 for recent supply trends for laminated
lumber.
m3
% chg. 03-04
Austria
82,476
119.6
Finland
64,816
92.8
China
57,919
248.1
Schweden
36,547
93.0
Germany
28,291
63.4
Canada
14,092
127.5
Russia
12,117
105.4
USA
3,657
62.8
Total
304,143
106.8
Japan Ministry of Finance
Figure 15: Japanese Imports of Glulam Lumber (January – June, 2004)
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15 Summary
Outside of North America, Japan remains the single most important volume market for wood
products related to wood-framed housing in the world. And unlike North America, or the smaller
volume wood-for-housing users such as Europe and Oceania, Japan continues to be a significant net importer of wood products.
To suceesfully compete in this market, suppliers more than ever need to fully uderstand the
wood-use trends behind the market demands in Japan, both for structural systems and for nonstructural applications.
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Wood Market Trends in Japan - Forum

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