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Sept 2004 - The Logging and Sawmilling Journal

SPOTLIGHT

Q-WEB delivers new markets

The Quebec Wood Export Bureau—or Q-WEB as it’s known—has developed a solid strategy that is capturing new sales and markets for Quebec wood producers.

By Roy Ostling

Q-WEB’s membership includes some of the province’s largest commodity softwood producers, such as Tembec and Abitibi-Consolidated, as well as major hardwood producers and remanufacturers, like C A Spencer Inc and Algonquin Wood Mouldings.

At a time when some wood products export organizations across Canada are struggling for funding, the Quebec Wood Export Bureau is busy capturing new markets and building new programs. The Quebec Wood Export Bureau, known as Q-WEB, was established to stimulate the export of Quebec wood products to overseas markets. It brands itself as “the only organization in Quebec that represents export companies in the wood products sector with recognized experts.” Q-WEB provides market intelligence and generic product promotion services for manufacturers grouped in six sectors: softwood lumber, hardwood lumber, hardwood flooring, finished wood products, pre-fab housing, and engineered wood products.

Depending on the sector, members pay annual dues of $2,000 to $2,500. Q-WEB’s membership includes some of the province’s largest commodity softwood lumber producers such as Tembec and Abitibi-Consolidated, as well as major hardwood lumber producers and remanufacturers such as C A Spencer Inc and Algonquin Wood Mouldings. “The toughest part is keeping the group together,” says chief executive officer Sylvain Labbé. A former Quebec remanufacturing company owner, Labbé refocused and re-branded Q-WEB in 1996. At that time, the Bureau de Promotion des Industries du Bois, which represented lumber producers in Eastern Canada, disintegrated because of the impacts of softwood lumber quotas and funding disagreements.

 Q-WEB member C A Spencer Inc’s operation in Laval, Quebec (above). With production of over 70 million board feet annually, and as Canada’s leading wholesaler and exporter of hardwood lumber, C A Spencer has a strong interest in developing new export markets.

Over the past eight years, Labbé has seen Q-WEB grow from its original 75 members to more than 200 companies, develop a sustainable funding base and steadily grow a range of services and programs supported by a $3 million annual budget. Federal and provincial governments continue to provide the majority of Q-WEB’s funding but its members now cover up to 40 per cent of the annual budget. While maintaining good relations with government is a priority, industry determines what Q-WEB does and the services that it provides. “If you let politics drive the industry, you are in trouble,” Labbé maintains. “Politics is a four-year cycle, and markets can’t be developed that quickly.”

That attitude prevailed when Q-WEB was offered funding to bring on smaller producers who weren’t prepared to pay the membership fee, which would have changed the focus and structure of Q-WEB. “Sometimes you have to say ‘No’ to government if you have a long-term perspective, and that’s not a bad thing,” Labbé explains, and it was a position that his members endorsed.

Q-WEB’s annual budget is divided equally between infrastructure, which includes local and overseas staff, and activities directed at promotion, market access and development. By cooperating and pooling their resources, members gain more leverage in an increasingly competitive global wood products market. When it comes to promoting members’ products through its website (www.quebecwoodexport.com), in technical bulletins or on trade missions, Q-WEB focuses on generic information. Quebec’s primary mills ship more than 42 million cubic metres of softwood lumber annually, making it Canada’s second largest producer after British Columbia. As well, Quebec is Canada’s largest producer of hardwood lumber, generating 78 per cent of the country’s volume. By promoting the strength of Quebec’s slow growing SPF products, Q-WEB benefits all members in the Softwood Lumber grouping, as does promoting the quality and availability of Quebec’s hardwoods for the Hardwoods sector.

Market access barriers are a big area of concern for Q-WEB members. This can include environmental regulations and concerns, construction codes and standards, and even how terrorism has affected the notice required and completion time for shipping product into the United States.

The Quebec Wood Export Bureau works like a federation. That’s one of the keys to its success in serving and maintaining its diverse membership. Each sector has its board of directors, has staff based on its product grouping, determines its own budget, and identifies activities to participate in, such as trade shows, and the promotional materials it wants to produce. As well, each product group develops a five-year strategic plan showing where potential export growth is and how to capitalize on it. “Each sector identifies two markets it wants to investigate for the coming year and we work to develop them,” Labbé says. In some cases, this involves working with federal agencies and partnering with the BC Wood organization on trade missions and shared in-market resources in countries such as India and China. “Some markets have proven good for hardwoods such as South Africa and South Vietnam for its growing furniture industry. Others such as the Philippines and India have failed,” Labbé says.

He adds that Mexico has proven difficult to penetrate as a market for wood frame housing because of pre-established views about the suitability of wood for construction whereas China shows promise. The resources Q-WEB devotes to developing new markets depends on the product sector. The Hardwood Flooring sector already exports about 90 per cent of its volume into the US and wants Q-WEB to concentrate on developing new markets in Europe and other overseas markets. The other product sectors—such as Softwood Lumber, Engineered Wood Products or trusses, and Pre-Fab Wood Frame Housings—see market access as a major constraint to export growth, and want Q-WEB to focus on helping them overcome those barriers. “Market access barriers are a big item,” Labbé says. This applies particularly to the Softwood Lumber sector, where most of the companies are big enough to do their own market development.

In European markets, sustainable forestry practices are a major concern. Q-WEB has taken on the role of certifying that its members’ products come from legal timber sources where forestry standards are met and where there is no illegal harvesting.

While Q-WEB doesn’t lobby government, it is constantly in touch with experts involved in the US/Canada softwood lumber dispute and continually updates members on changes to the Countervailing Duty and classifications. Other product access issues include psychological or cultural barriers, environmental regulations and concerns, construction codes and standards, changing trends in consumer tastes, and even how terrorism has affected the notice required and completion time for shipping product into the US. Q-WEB has several ongoing programs and initiatives to help members overcome market access barriers. It’s developed a code of conduct or protocol that members must follow and which requires them to label their products before they can be sold in export markets. In European markets, sustainable forestry practices are a major concern. Labbé is on the UNECE Timber Committee and Q-WEB has taken on the role of certifying that its members’ products come from legal sources where forestry standards are met and where there is no illegal harvesting.

Phytosanitary certification of wood products is now a requirement in most overseas markets, and Q-WEB is a recognized body able to inspect and verify its members’ products have met the required standards. Q-WEB has 10 full-time staff located in its St Foy, Quebec office, with two employees working full time updating its market contact database. Each Q-WEB member receives a searchable CD-ROM database that lists 70,000 customers worldwide identified by sector, with a financial evaluation of each company assessing its potential risk as a buyer. Another CD-ROM that members receive features a database of 15,000 commercial and residential builders in North America, and the next edition will include builders in Japan and Europe.

The CD-ROM databases are copy-protected and expire at the time Q-WEB members must renew their annual membership. While $2,500 in annual membership dues may sound like a big investment for some wood product manufacturers, Labbé says simply that you get what you pay for. “If industry invests, they will ensure their money is well spent, otherwise it becomes a social club.” Q-WEB’s stable membership is a good indication that the membership feels it is getting value for money. So are the comments from members themselves. “I find them of very high value,” says Fern de Silva, export manager for Tembec, which produces 1.6 billion board feet annually of structural and specialty softwood products. One benefit is the leads he receives when buyers post inquiries on the Q-WEB website; these leads translate into actual sales. “We also get access to new markets and information about new markets related to specific products.”

Another benefit is being able to connect with Q-WEB staff in specific markets, such as when a Tembec salesman accompanied a Q-WEB representative to investigate if a UK truss manufacturer would accept Canadian standards in its products. What impresses Daniel Warnett, sales manager for Algonquin Wood Mouldings, about Q-WEB is its well-organized approach and reliability at providing information. Overseas exports account for about 15 per cent of Algonquin’s 4.5 million board feet annual production of hardwood lumber, mouldings and specialty products for the kitchen cabinet industry. “Their (Q-WEB’s) product is their service,” he says. “They are really up-to-date on markets and what those markets want. They support our industry and are doing a good job and that’s why we keep renewing our membership.”

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