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Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
Session 20 ic2011 ganguly
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Session 20 ic2011 ganguly

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  • 1. Perceived Benefits and Challenges of Chain of Custody Certification: A Survey of Supply Chain Members in China and VietnamDR. IVAN L. EASTIN, DR. INDRONEIL GANGULY, DR. JEFF CAO & DR. MIHYUN SEOL PRESENTED BY DR. INDRONEIL GANGULY FACULTY RESEARCH ASSOCIATE CENTER FOR INTERNATIONAL TRADE IN FOREST PRODUCTS (CINTRAFOR) UNIVERSITY OF WASHINGTON, SEATTLE, USA F P S 6 5 TH I N T E R N A T I O N A L C O N V E N T I O N ; P O R T L A N D , O R E G O N J U N E 1 9 TH – 2 1 ST, 2 0 1 1
  • 2. Presentation Contents Overview  Global wood products trade Wooden Furniture Exports  Background of overview of global furniture market  Chain of Custody Certification  Market leader in furniture exports – China  Emerging nation in furniture exports – Vietnam Acknowledgements
  • 3. Wood and Wood Products Exports – by products 120,000 100,000 80,000 Million US Dollars 60,000 40,000 Builders Joinery And Carpentry 20,000 Lumber 0 2006 2007 2008 2009Source: Global Trade Atlas 2010 Note: Wood and Wood Products represent HS 44 – Furniture (HS 94) not included
  • 4. Top 5 Wood and Wood Products Exporting Nations Germany China Canada Russia United States 18,000 16,868 16,000 Canada 14,000 13,442 Million US Dollars 12,000 Germany 10,000 8,536 8,000 6,547 6,000 3,758 4,000 2,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Source: Global Trade Atlas 2010 Note: Wood and Wood Products represent HS 44 – Furniture (HS 94) not included
  • 5. Top 5 Wood and Wood Products Importing Nations United States Japan China Germany Italy 25,000 23,773 20,000 Million US Dollars 16,560 15,449 15,000 9,803 10,000 5,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Source: Global Trade Atlas 2010 Note: Wood and Wood Products represent HS 44 – Furniture (HS 94) not included
  • 6. China’s Log Import TrendsImportant trends from 2000 to 2009 Important trends from 2007 to 2009 China’s log imports increased by 147% China’s log imports decreased by 24% Log import from Change Trend Log import from Change Trend Russia 373% Russia (-)36% New Zealand 1416% New Zealand 177% United States 903% United States 12% Australia 9225% Australia 20% Vietnam 1010% Vietnam (-) 89% Canada 2209% Canada 186%Solomon Islands, Congo, 504% Malaysia (-)49%Central African Republic, to Germany (-)59% Mozambique 6138% France 86% Malaysia (-)46% Central African Republic, 72% to Germany (-)75% Benin, Togo 245% France (-)50% Legend:  Market share increased 67%Gabon, Papua New Guinea,  Market share decreased to Myanmar, Cameroon 170%  Market remained unchanged
  • 7. Wooden Furniture Exports &Chain of Custody Certification Discussion on Market leader in furniture exports – China Emerging nation in furniture exports – Vietnam
  • 8. Top 5 Wooden Furniture Exporting Nations 8,000 7,593 7,000 China 6,000 Germany Million US Dollars Italy 5,000 Vietnam Poland 4,000 3,000 2,773 2,000 1,286 1,000 350 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Source: Global Trade Atlas 2010 Note: Wooden Furniture represent HS 940330, 940340, 940350 & 940360
  • 9. Competitive Threat from Emerging Furniture Exporters Exports of Wooden Furniture - Globally 8,000 7,593 China Vietnam Malaysia Indonesia 7,000 China 6,000 From 2001 to 2009 Million US Dollars China’s exports grew by 491% 5,000 Vietnam’s exports grew by 692% 4,000 3,040 3,000 2,773 2,000 1,000 350 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Source: Global Trade Atlas 2010 Note: Wooden Furniture represent HS 940330, 940340, 940350 & 940360Note: * Vietnam’s export data is estimated
  • 10. Competitive Threat from Emerging Furniture Exporters Exports of Wooden Furniture to the US 5,000 4,932 China Vietnam Canada Malaysia Indonesia 4,000 From 2000 to 2009Million US Dollars China’s exports to the US grew by 119% Vietnam’s exports to the US grew by 16,276% 3,000 3,181 2,000 1,450 1,061 1,000 6 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Source: Global Trade Atlas 2010 Note: Wooden Furniture represent HS 940330, 940340, 940350 & 940360
  • 11. Competitive Threat Changing Regulatory Environment:  Public procurement policies in Japan, the EU and the US require verification of legality for imported wood. Market Opportunity:  Proactively move to increase the use of certified wood and adopt chain of custody certification to ensure the legality and sustainability of wood supplies
  • 12. Number of FSC-CoC Firms 800 Malaysia Indonesia Vietnam China 700Number of CoC Firms . 600 500 400 300 200 100 0 2001 1998 1999 2000 2002 2003 2004 2005 2006 2007 2008 2009
  • 13. C0C Certification -- CINTRAFOR SurveyChina: 128 out of 621 firms Vietnam: 28 out of 162 firms Response rate: 20.6% Response rate: 17.3%
  • 14. CoC Survey – Respondent Profile CHINA VIETNAM Wood products manufacturers (46%), Wood products manufacturers (86%),Business Types traders and distributors of wood products traders and distributors of wood products (20%) (14%) Over 50% half of the companies are The majority (63%) are small-mediumCompany Size medium-large sized companies with annual sized companies with annual sales under sales over US$5 million last year $5 million FSC-CoC (71%)Types of Env. FSC-CoC (99%) ISO 14001 (4%)Certification ISO 14001 (25%) PEFC-CoC (8%)held PEFC-CoC (6%) Almost 75% of Vietnamese CoC operations Over 85% of Chinese companies do not reported a significant proportion (over 25%CoC Production have significant CoC certified production of annual sales) of CoC certified volume (less than 25% of annual sales) production
  • 15. CoC Survey Results: ChinaEnd Markets for China’s Price premiums for certified woodCertified Wood Products products vary by marketEnd 2006 2008 8%markets 6.3% Price Premium .Europe 54.6% 31.4% 6% 5.1%US 29.8% 17.2% 4% 2.8%Canada 8.4% 8.9% 1.5% 2%Australia 1.6% 6.5%Japan 0.6% 8.9% 0%China 2.8% 13.0% Europe US Canada ChinaOther 2.2% 7.7%Total 100% 100%
  • 16. CoC Survey Results: China – Vietnam Comparison Market Challenges with Adopting CoC Certification Low Awareness of Vietnam 21.1% FSC Label China 52.0% Shortage of 36.8% Certified Wood 50.0% Lack of Market 10.5% Incentives 44.9% High Cost of 47.4% Certification 42.9% Little Support to 36.8% Meet FSC Standards 32.7% 0% 10% 20% 30% 40% 50% 60% Percentage of Survey Respondents
  • 17. CoC Survey Results: China – Vietnam Comparison Intention when current certification expires Renew Current 47.4% Certification 53.1% 5.3% Not sure 25.5% Obtain Multiple 47.4% Certification 20.4% Vietnam Switch to a 0.0% Different Program 1.0% China 0% 10% 20% 30% 40% 50% 60% Percentage of Survey Respondents .
  • 18. CoC Survey Results: China – Vietnam Comparison How important is CoC certification in helping you meet your business partners purchasing requirements? 60% China Vietnam Percentage of Respondents . 50% 40% 30% 20% 10% 0% 1 2 3 4 5 6 7 Not Helpful Very Helpful
  • 19. CoC Survey Results: China – Vietnam ComparisonHow important is CoC certification in helping you reduce business risk by removing illegal timber from your raw material supply? 70% China Vietnam 60% Percentage of Respondents . 50% This contrast is statistically significant at alpha = 0.00 40% 30% 20% 10% 0% 1 2 3 4 5 6 7 Not Helpful Very Helpful
  • 20. CoC Survey Results: China – Vietnam Comparison How important is CoC certification in helping forest-dependent communities by supporting sustainable forest management? 50% China Vietnam 45% Percentage of Respondents . 40% This contrast is statistically significant at alpha = 0.00 35% 30% 25% 20% 15% 10% 5% 0% 1 2 3 4 5 6 7 Not Helpful Very Helpful
  • 21. Discussions – CoC Survey China Supply constraints in obtaining certified wood Low market awareness of certification programs is the biggest challenge High certification costs reduce competitiveness of SME’s Most firms not currently making certified products Sales of certified products <20% of sales and <1% of wood exports
  • 22. Discussions – CoC Survey China & Vietnam Chinese firms are more likely to perceive that lack of market incentives, supply shortages and low market awareness of certified wood are constraints Vietnamese firms are more likely to pursue certification under multiple programs in the future Vietnamese firms tend to be more optimistic regarding the business and social opportunities provided by certification programs
  • 23. Acknowledgements The studies presented here are funded by  USDA Cooperative State Research, Education and Extension Service  USDA NIFA-ISE competitive grant (no: 2009-51160-05463)  Travel and miscellaneous research support provided by Softwood Export Council, Western Wood Products Association, West Coast Lumber Inspection Bureau, & Pacific Lumber Inspection Bureau Mr. Jeff Cao & Ms. Mihyun Seol (UW-CINTRAFOR graduate students) contributed significantly to the CoC study. Thank you

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