Light Weight Plywood in Stock!

Garnica Plywood’s “Pluma-Ply” is a lightweight poplar core plywood that weighs approximately 55 lbs (15% lighter than typical 3/4″ veneer core panels).  We are stocking a variety of thicknesses with North American hardwood veneer faces and backs.  Different veneer grades are stocked to meet customer needs for both quality and price.  Products are also available with a clear UV finish 1 or 2 sides.

UNIBOARD INVESTS OVER $53 MILLION IN VAL-D’OR FACILITY

The investment will increase the productivity of the plant in addition to modernizing key production areas of the Val-d’Or facility allowing Uniboard to better service our customer base in Canada and the United States. The investment will continue to position the Val-d’Or facility as one of the preferred particleboard and thermofused laminate producers in the North American panel industry. It will strengthen Uniboard’s overall network of particleboard, MDF and thermofused laminate facilities which are located in Sayabec and Mont-Laurier, Quebec. Uniboard employs a skilled workforce of 186 at its Val-d’Or site and over 800 people within the entire corporation.

Uniboard’s Val-d’Or facility has seen significant growth since its origins dating back to 1976. In 2010, Uniboard invested in a new thermally fused laminate short-cycle press in Val-d’Or to complement its value-added products. In 2012, Uniboard further solidified its position in the industry when it was acquired by Kaycan, a leading manufacturer of building products in North America with its head office located in Montreal, Quebec. The Kaycan Group of Companies offers a full array of products for both the exterior and interior of the home, including vinyl, aluminum and engineered wood siding products, PVC windows and patio doors, particleboard, MDF, thermally fused melamine and laminate flooring.

James N. Hogg, President and CEO of Uniboard Canada Inc. stated, “With today’s announcement, this important modernization project confirms Uniboard’s leadership position in the North American composite panel industry and allows Uniboard to further enhance its offering of engineered wood and value-added products. Over recent years, Uniboard has invested heavily into product development, launching new colour collections including North America’s first registered embossed thermofused laminate panels as well as expanding our successful NU Green® range of low and no-formaldehyde products. We greatly appreciate the strong commitment of the Kaycan Group, the engagement of our employees and the community and the financial support of both provincial and federal government agencies, Investissement Québec and Economic Development Agency of Canada for the regions of Québec, allowing Uniboard to move forward with this project while securing quality employment in Quebec’s Abitibi region”.

About Uniboard™

Uniboard Canada Inc. is a leading North American manufacturer of engineered wood products, with an installed capacity of over 640 million square feet of raw particleboard, high-density and medium-density fiberboard, of which over 50% is converted into value-added thermally fused laminate and laminate flooring products. Uniboard’s mills in Val-d’Or, Sayabec, Mont-Laurier and Laval employ over 800 people. Its products are sold to retailers, distributors and finished goods manufacturers, which cater to the kitchen cabinet, furniture, office, home renovation and construction industries, as well as to the floor covering industry. More information at: www.uniboard.com.

Coalition of U.S. plywood manufacturers files to appeal previously dismissed case

Hardwoods Distribution Inc. announced that a coalition of U.S. plywood manufacturers filed a summons with the U.S. Court of International Trade to appeal the ruling that had dismissed their trade case against Chinese hardwood plywood.

The trade case was initiated on Sept. 27, 2012, when the coalition alleged that Chinese imports are sold in the United States at prices below cost and are subsidized by the government of China. After more than a year of investigation, on Nov. 5, 2013, the U.S. International Trade Commission ruled unanimously against the coalition’s case.

Hardwoods Distribution’s strategy includes selling both imported and domestically produced hardwood plywood to satisfy the demand and diverse product preferences of its customers. The company estimates approximately 14 percent of its total sales are of product imported from China that fall within the scope of this trade dispute. The company says it will closely follow the appeal process that has been initiated.

It is expected a ruling from the U.S. court system will take 18 to 24 months, and that no duty liabilities related to importing Chinese hardwood plywood would arise during that period of time.

HPVA statement on Chinese hardwood plywood case

By Kip Howlett, president, Hardwood Plywood and Veneer Association

Domestic producers comment on investigation into plywood imports.

Are seeking legal remedies for violations of the international trade law a trade war? No. Duties are never unprecedented when violations of the trade law have been found. The levels of price dumping and the amount of the subsidies are determined by the facts of each case. To counteract dumping and government subsidies, international trade law puts in place remedies which are not punitive but remedial to level the playing field. Products are supposed to be traded fairly. China itself is an aggressive user of anti-dumping law against imports coming into China.

Are the six domestic companies seeking a competitive leg up in the marketplace by petitioning the federal government to investigate unfair trade practices in China? No. Remedies are not designed to give someone a competitive leg up. They’re designed to make trade fair. If a company has a natural economic advantage, then so be it. It’s a free market.

Importers are “baffled” that the Department of Commerce found preliminary antidumping and countervailing duties. A significant number of Chinese producers refused to respond to the initial questionnaire and are viewed as a matter of law and policy “to have something to hide.” Moreover Commerce examines “adverse facts” relevant to this investigation that are in the public domain as well as to the Department to calculate the preliminary rates. The preliminary determinations did not come out of thin air. (1)

Commerce is now in the in-depth investigation phase which includes in-country visits. The final dumping margins and countervailing duties for subsidies will result in final duty determinations scheduled to be announced on September 17th.

Chinese manufacturers use lots of illegally harvested timber. ”Because after massive floods blamed on deforestation of China’s forests, China sharply restricted logging at home. According to the EIA (Environment Investigation Agency), last year one-third of all the timber sold worldwide was bought by China, with little regard to its origin. After analyzing trade data for 36 supplier countries, the EIA has concluded that approximately 10 percent of the logs and sawed timber is illegal, representing “turnover” of $3.7 billion.” China is the world’s largest hardwood log importer and the world’s largest illegal log importer. The report goes on to say: “the Chinese Government has done virtually nothing to curb illegal imports, while putting in place policies to ensure supply from some of the worst illegal logging hotspots in the world.” (2)
China is not known for its strong environmental protection or safety record in products or the workplace. The August 10th edition of The Economist’s cover calls China: “The world’s worst polluter – Can China clean up fast enough?” (3)

Environment International reported: “Over the last 20 years, China’s formaldehyde industry has experienced unprecedented growth, and now produces one-third of the world’s formaldehyde. More than 65 percent of the Chinese formaldehyde output is used to produce resins mainly found in wood products – the major source of indoor pollution in China. Although the Chinese government has issued a series of standards to regulate formaldehyde exposure, concentrations in homes, office buildings, workshops, public places and food often exceed the national standards . . . The wood processing industry has the highest average industrial formaldehyde concentration, caused in part by unventilated workshops and a lack of safety precautions.” (4)
Will the domestic cabinet industry be harmed if they do not have access to cheap Chinese hardwood plywood if duties are imposed to address the trade law violations?

The answer depends on how much is hardwood plywood contributing to the total cost of production. If hardwood plywood is 20-25 percent of the total cost of a cabinet, the impact is not significant. Product quality will improve because of the better product quality of the U.S. made product. Fewer claims or consumers deselecting are positive effects on both the cost and revenue side. The recall cost is a 100 percent and probably more than the original price.

Will U.S. cabinet producers lose market share in the new housing market? That depends on the builder choice for quality and demand sensitivity of the cost of cabinets in a kitchen to the overall price of the house. If there are $6,000 of cabinets in a $250,000 house (2.4 percent) and hardwood plywood is 20-25 percent of the cost of the $6,000 cabinets, then the cost of the house will affected 0.06 percent. How sensitive is consumer demand to that change when the cost is amortized over a 30 year mortgage? A half percent increase in mortgage rates drives up the paid home price far more.

The very point of dumping and subsidization is to capture a foreign market. Eventually, the unfair traders monopolize the foreign market (by driving competitors out through price undercutting). And, in any monopoly, without strict controls, prices increase dramatically. This is China’s aim, even while it keeps its own domestic market protected. They export $670 million of HWPW and we export to them $250,000 of HWPW and $17.6 million of hardwood veneer.

There are no hardwood plywood products which are currently imported from China that cannot be manufactured by domestic producers. If a cabinet or furniture company wants to source their requirements from domestic producers, they surely can. And, since the domestic producers are operating at about 50 percent of their production capacity, there is plenty of room to ratchet up production to meet increased demand.

By ratcheting up production to meet increased demand, domestic manufacturers can spread their fixed overhead costs over a larger production pool. This, by itself, would serve as a natural “brake” on any price increases.

Chinese imports squeezed out other countries who used to have a larger share of the U.S. market. These suppliers will also come back into the market as well. There will not be supply shortages. There will be a new market equilibrium which will be based on the fair trade of hardwood plywood.

If there is an influx of ready to assemble Chinese cabinets that incorporate the hardwood plywood that used to be destined for the U.S. market, the U.S. cabinet industry has a remedy. Welcome to our world.

(1) Commerce Preliminarily Finds Dumping of Imports of Hardwood and Decorative Plywood from the People’s Republic of China http://ia.ita.doc.gov/download/factsheets/factsheet_China-Hardwood-Decorative-Plywood-Prelim-30APR13.pdfhttp://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations/2012/hardwood_plywood/prelimphase.htm
(2) ‘Appetite for Destruction: China’s Trade in Illegal Timber’ highlights China’s lack of action against illegal logging http://www.timberdesignandtechnology.com/chinas-voracious-appetite-for-timber-driving-illegal-trade-says-eia-report/
(3) The Economist, August 10-16, 2013, www.economist.com
(4) Environment International 35 (2009), 1210-1224

Builder Confidence Hits Major Milestone in June

Builder confidence in the market for newly-built single-family homes hit a significant milestone in June, surging eight points to a reading of 52 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. Any reading over 50 indicates that more builders view sales conditions as good than poor.

“This is the first time the HMI has been above 50 since April 2006, and surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases,” said NAHB Chairman Rick Judson, a home builder and developer from Charlotte, N.C. “With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes.”

The eight-point jump in the index was the biggest one-month gain since August and September of 2002, when the HMI recorded a similar increase of eight points.

“Builders are experiencing some relief in the headwinds that are holding back a more robust recovery,” said NAHB Chief Economist David Crowe. “Today’s report is consistent with our forecast for a 29 percent increase in total housing starts this year, which would mark the first time since 2007 that starts have topped the 1 million mark.”

Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components posted gains in June. The index gauging current sales conditions increased eight points to 56, while the index measuring expectations for future sales rose nine points to 61 – its highest level since March 2006. The index gauging traffic of prospective buyers rose seven points to 40.

The HMI three-month moving average was up in three of the four regions, with the Northeast and Midwest posting a one-point and three-point gain to 37 and 47, respectively. The South registered a four point gain to 46 while the West fell one point to 48.

Editor’s Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at www.nahb.org/hmi. More information on housing statistics is also available at http://www.housingeconomics.com/