Variety of news selected from Japan Lumber Journal regular article, “News in Brief”

“Trends in Forests and Forestry in Fiscal 2009 and Policies for Forests and Forestry in Fiscal 2010 (A Forestry White Paper)” was approved in a cabinet meeting on April 27. The paper clearly explains measures to bring out forests’ manifold functions and to develop forestry in a sustainable and healthy manner. At the beginning, it features “Rehabilitation Plans for Forests and Forestry” and introduces new ways of using lumber for public buildings. In the first chapter: “Productivity Improvement for Rehabilitation of Forestry,” it describes the measures to increase the forestry productivity in order to rehabilitate our country’s forestry, like improvement of the network of roads, mechanization of forestry, forestry intensification, and personnel training. In chapters in and after the second, it reports on “Measures to cope with the Problems of Global Warming,” “Management and Maintenance of Forests,” “Forestry and Villages,” “Forest Products and the Lumber Industry,” and “The Main Trends in Each Area of National Forests.”

The Food and Agriculture Organization of the United Nations (FAO) recently reported a decreasing trend in the past ten years in the loss of the world's forests due to the conversion of tropical forests into agricultural land. However, deforestation is continuing in many countries at an alarmingly high rate. According to the FOA's The Global Forest Resources Assessment 2010, which covers 233 countries and areas, approximately 13 million hectares of forest land were converted to other uses or lost due to natural damage annually from 2000 to 2010. Compared to the approximately 16 million hectares per year during the 1990s, deforestation decreased about 15%. Conversely, an increase of new forest land of over 7 million hectares each year during the same time period was also reported. The following points were raised as important factors: 1) the notable decrease in the high rate of deforestation in Brazil and Indonesia, 2) the ambitious tree planting programs in countries such as China, India, the United States, and Vietnam, and 3) the natural increase of forests in some regions.

Rus Intera, a sales subsidiary of JK Holdings Co., Ltd., completed its company registration on January 29 and recently began business operations. The company conducts import sales of Japanese and Chinese construction materials in Vladivostok, Russia. The employees include Yosuke Shudo, the company president, and three Russian staff members. The main products that are sold are ceramic based siding manufactured by Toray and eucalyptus plywood produced in China, and the company is targeting 80 million yen in net sales for the first business year. Currently in the region, sales of ceramic based siding manufactured in Japan are expanding year by year, but there are only a few sales agents or outlets that have inventories of the products, and it takes about two months from placing the order to receiving the product. Therefore, by having products in stock, the company is looking to bring about a number of benefits and to gain market share. In addition, although sales results of eucalyptus plywood is almost nonexistent, the plan is to expand sales of mainly medium thick plywood used for material in floor foundations in condominiums and partitions and walls between rooms. Samples are displayed at every sales outlet and are already receiving high praise.

According to a report titled “The Movement of the Forestry Industry in 2010”, published by the government of Aichi Prefecture on April 21, the prefecture’s shipment amount of logs and lumber items in 2008 was ¥175,360 million (down 4.8% from the previous year). That ranks it number two in Japan after Shizuoka Prefecture (¥184,349 million). Its share in Japan remained unchanged from the previous year with 6.8%. Number three was Hokkaido with ¥165,734 million. Aichi, being a distribution center of timber in the Tokai area and a place having consuming regions behind it, is a basis of distribution and manufacture of wooden items. With those factors, the rank of the prefecture had been number one for long time until 2007. The number of sawmills in the prefecture was number 11 with 196 factories, and its share of lumber shipment in Japan was 2.0% with 223,000 cubic meters (down 5.5%).

The second national convention of the “Forum to Promote Woody Towns and Woody Houses” was held at Shibaura Institute of Technology in Toyosu, Tokyo on April 24. The forum, established in February 2009 to further encourage the usage of lumber for houses and buildings, is supported by the Ministry of Land, Infrastructure, Transport and Tourism and the Forestry Agency. At the convention, an activity report of the past relayed forums titled “The Power of Wooden Buildings - The Future of People and Forests” and a panel discussion were presented. In addition, its logo, selected from among applicants, was announced there and the designer of the logo was given an award at the ceremony. Representative Takanori Arima reported that the total number of the group’s individual and organization members exceeded 880 and said, “Over the past year, this forum has fulfilled the function as a place of information sharing and exercising the ideas. In the future, we would like to try to offer and share information by continuing the activities based on our five philosophies.”

Daito Trust Construction Co., Ltd., the largest company of apartment and condominium buildings constructed with the 2x4 construction method, announced its business results for its fiscal year ending March 2010. The company achieved increased revenue and increased profits for the second consecutive term with sales of 972.616 billion yen (1.9% increase compared to the previous year), ordinary profit of 76.663 billion yen (3.6% increase compared to the previous year), and net profit of 45.353 billion yen (7.7% increase compared to the previous year). As for the construction business in which the strength of the company lies, sales from completed construction totaled 465.58 billion yen (0.9% decrease compared to the previous year) not reaching the results of the previous year, but total profits from completed construction improved 3.8 points compared to the previous term to 166.461 billion yen (35.8%). With a decrease in material procurement costs, improvements in construction methods and specifications, and the use of substitute products, the results of the cost cutting measures bore fruit. Concerning the reception of orders, the main business office, which used to be divided into three areas nationwide, was integrated and changed into a flat organization to meet the customers diversifying needs for land utilization. Sales from orders taken in the following year are forecasted to be 485.0 billion yen.

403 Co., Ltd., which runs a portal site “Custom-made housing 403” (Tokyo) to let users find the right builders, opened a showroom in Shanghai, China on April 1. To cope with the increasing demand for Japanese products in the Chinese market, it opened the facility jointly with Kokawa Co., Ltd. (Wakayama Prefecture), a manufacturer of threshold sills which owns its factory in Shanghai. In the showroom, products centering Japanese traditional as well as custom-made items such as Japanese rooms, interior doors, and furniture, are displayed. The company is predicting sales of 100 million yen in three years.

Aqura Home Corporation (Tokyo), a builder which supplies low cost housing called "fast housing," had sales of 30.9 billion yen for its fiscal year ending February 2010, increasing 11% compared to the same period last year. Revenue increased for the sixteenth consecutive term. Sales were strong of "Shinsumai 55," the company's designed home with a base price of 5.5 million yen and "Optis," the company's order-made home with a base price starting from 10.0 million yen and with the specifications for "long-term, excellent housing". With the promotional campaign, "Triple Housing Eco Points Campaign," taking place twice since February and being effective, visitors to the company's exhibition sites increased greatly by 24% compared to the same period last year, the number of orders for houses increased 5% to 1,648 units, and the number of completed houses increased 18% to 1,367 units. Operating profit seems to be 24 times higher compared to the same period last year at 1.0 billion yen, ordinary profit, 9 times higher at 1.1 billion yen, and net income, 9 times higher at 0.6 billion yen. For the fiscal year ending February 2011, the company is forecasting sales of 31.6 billion yen (2% increase) and the number of completed houses to be 1,400 units (2% increase).

On April 9, the Ministry of Land, Infrastructure, Transport and Tourism announced the state of the eco-point system for housing at the end of March. From the start of the application period on March 8 to the end of the month, the number of applications totaled 3,690 of which 163 (4%) were for new housing construction and 3,527 (96%) were for remodeling/reconstruction. In addition, the number of points issued until the end of March was 3,000,000 points for 10 cases of new housing construction and 13,279,000 points for 337 cases of remodeling/reconstruction with an overall total of 16,279,000 points. For remodeling/reconstruction, about 79% of the issued points were for improving window insulation. Among the issued points, the number of points that were redeemed for products or other items was 10,942,506 points accounting for 67.2%. Among this amount, about 20% was used in the instant redemption system. The remaining 80% was exchanged for products or other items, mostly for redeemable product gift certificates or prepaid cards. Environmental donations numbered 2 cases for 600 points.

On March 23, Seminar Concerning Measures to Promote Domestic Lumber Exports --Business Presentations Concerning Measures to Solve Domestic Lumber Exports-- was held in Tokyo by the Japan Wood-Products Export Promotion Council. At the event, presentations were made by three lecturers concerning the results of survey research on developing specifications to export domestic lumber corresponding to the needs and standards of China. Regarding developing the specifications, surveys were conducted on structural materials and the main structural parts of the post and beam construction method using laminated cedar lumber, which were selected as the research target to examine on the post and beam construction system in China according to the different processes. The survey showed the following: 1) the post and beam construction system in China is not completely developed, so information and support from Japan for many of the processes are requested. 2) Calculation and construction are planned to be dealt by the local side in China. In addition, three-story homes constructed in the post and beam method using laminated lumber are being promoted by the Japan side. Concerning not only the structure but also finishing work, the lecturers pointed out details such as "a paint finish is essential in China" and "roofs are tiled."

On March 12, a case study presentation, "New Lumber Use," was held by the Lumber Use Promotion Central Council in Shinkiba, Tokyo at the Mokuzai Kaikan. At the event, presentations were given one after the other in the parts: part one: lumber use for barns, part two: lumber use for stores, and part three: examples of office furniture, and the full capacity audience listened with deep interest to the topics being spoken about by people-in-charge from the different companies. The representative from Prime Truss Co., Ltd. spoke about the merits of wood trusses, and with photographs, he explained about their use in large-scale facilities such as barns and agricultural facilities, nursing facilities, and assembly halls. Key-Tec Co., Ltd. representative spoke about its use of FSC certified material, which takes into consideration environmental measures, in its LVL and how its active work on environmental problems is attracting the attention of clients. The lumber use policy of Okamura Corporation was explained as taking into account biodiversity, improving its guarantee on legality and sustainability, and its increase in the use of domestic material. While introducing examples of lumber use for furniture and interior at local welfare centers and cultural centers, the presenter from Okamura said, "We're aiming to create space that uses wood naturally."

On March 18, the Ministry of Land, Infrastructure, Transport and Tourism announced the appraised value of land at the time of January 1 of this year. On a national average, both residential land and commercial land dropped for the second consecutive year. Only 7 areas (of which 6 were residential areas) of the 27,410 points on the survey increased in value falling below the 23 areas from last year and becoming the fewest ever. The percentage in the amount of decrease was 4.2% for residential land and 6.1% for commercial land. In the three largest cities (Tokyo, Osaka, and Nagoya), the underlying tone of the decrease is in an easing trend, but in the rural areas, residential land expanded its decrease from 1.9% in the first half to 2.1% in the latter half with the underlying tone of the decrease still as severe as ever while commercial land was level. With the flow of population moving toward urban areas where jobs are available and with no brakes being put on the population outflow from rural areas, regional land demand decreases, and this is also reflected in land value.

Nice Corporation (in Yokohama City) has started accepting applications for housing eco-points setting its 13 lumber markets as the contact points. As insurance companies of warranty against defects of houses have undertaken the task of receiving the applications for housing eco-points from the government; Nice, as a company which had concluded a trustee agreement with the Organization for Housing Warranty, one of those insurance companies, will act as an agent. To apply for issuance of housing eco-points, the builders need to make and arrange the necessary papers. So, many builders are supposed to do the application procedures on behalf of home owners. For this reason, Nice’s lumber markets, as the contact points, will support the builders in making the papers.

Mitsubishi Paper Mills Ltd. has announced that it has started production of printing paper which meets the new Law on Promoting Green Purchasing. In February 2010, a revision of the fundamental policy based on the law was decided by the cabinet. This law was made to make governmental organizations purchase items on the basis of environment-friendly policies. For printing paper, a new “General Evaluation Index System” is to be installed from fiscal 2010. Under this system, the percentages of pulp with forest certification and pulp made of thinned wood are shown in points to indicate the overall evaluation in figures. The printing paper matches this new system. The company started production of A2 mat coated paper and high-quality paper mainly made of recycled paper pulp with forest certification in March. As for lightweight copying paper, the company had been dealing with paper with forest certification made of 70% recycled paper pulp, which suits the law; however, this time, the company trimmed its weight by about 6% maintaining the basic quality in order to improve the environmental value.

The Japan Acoustic Floor Manufacturer's Association (JAFMA) recently collected and released the shipment statistics for directly-applied soundproof flooring in 2009 (January-December). Reflecting the slump in new housing construction, the total annual amount of shipments recorded a double-digit decrease for the second consecutive year to 6,278,000 m² (21.9% decrease compared to the previous year). Because condominium construction, which is the main customer of soundproofing flooring material, recorded the largest decrease (58% decrease compared to the previous year) among housing starts, the results showed a severe two-digit decrease for the second consecutive year. In addition, shipments decreased 37.3% compared to 2007 when shipments were at their peak. Based on performance grading, LL45, which overwhelmingly holds the largest share, totaled 4,872,000 m² decreasing 26.0% compared to the previous year and falling more than the total average. Due to shipments of flooring material having a six month time lag with construction starts of condominiums, the association is expecting the severe number to continue for a period of time in the near future.

According to a report which Forestry Department of the Hokkaido Government compiled from customs statistics, Japan imported 4,381 cubic meters of temperate zone hardwood logs from America (North America and Canada), China and Russia in January. The figure dropped 74.9% from the same month in a year earlier or increased 210.5% from the previous month. This month-to-month growth is attributed to the fact that the import of American logs increased. After having continuously marked zeros since September 2009, Russian logs (1,268 cubic meters) came in for the first time in five months. Furthermore, the import of Chinese logs sharply increased to 659 cubic meters (up 117%, up 348%). However, the import in January is still lower than the average monthly import (5,200 cubic meters) in 2009. The import of lumber in the month largely decreased from the same month in the previous year to 5,505 cubic meters (down 29.6%, up 2.7%). In it, the amount of Russian lumber was 72 cubic meters, which is only one-third of the same month in the previous year. The volume of Chinese and American lumber decreased to 1,524 cubic meters (down 47.0% from the same month in a year earlier) and 3,909 cubic meters (down 17.3%) respectively. These results are backing up the scarcity of those items in the market.

On March 9, the government decided on a "bill concerning the promotion of the use of lumber in public buildings" at a cabinet meeting. The basic policy looks to plan for a change to wood construction for low-rise public buildings and to maintain a system in order for supplies to be made smoothly. As a measure, the bill will also apply in addition to public buildings to schools and senior citizen group homes that are even privately owned and will call on prefecture governments to put in their efforts. The bill did not state in its wording to use domestically produced lumber, but Hirotaka Akamatsu, the Minister of Agriculture, Forestry and Fisheries, stated at a news conference, "With the way I feel, I would like to see the use of wood centering on domestically produced lumber." If the bill is approved, it is scheduled to come into effect within six months.

On March 3, the Forestry Agency announced the results of survey concerning the conditions of ownership of forest industry machinery in fiscal 2008. At the end of fiscal 2008 (the end of March 2009), the number of owned high performance forest industry machinery increased by 328 units from the previous fiscal year to 3,802 units and increased for the 20th consecutive year since the start of the survey. Based of the type of machinery, processors (lumber producing machinery) were the highest in number with 1,144 units accounting for about one-third of the total. Other machinery followed with 990 forwarders, 633 harvesters, and 574 swing yarders. Within this overall gradually increasing trend, both skidders and tower yarders decreased for the second consecutive year by 13 units and 3 units respectively compared to the previous year. Looking at the number of owned machinery based on region, Kyushu had the highest number with 760 units followed by Hokkaido with 639 units, Chubu with 585 units, and Shikoku with 424 units. In Hokkaido, the number of feller bunchers being introduced stood out, and of the 60 units nationwide, Hokkaido has 51 units.

Japan Federation of Housing Organizations has published the results of its quarterly survey on “Managers Views on the Housing Business Confidence (as of January)” about low-rise apartment houses. The business confidence indexes on the result of the third quarter of 2009 (October-December 2009) were plus 8 points year-on-year in the number of total order receipt (minus 58 points in the previous survey), and minus 8 points in the amount of total order receipt (minus 54 points). The number of total order receipt went up for the first time in seven quarters. This is because of the recovery in custom-built detached houses after seven quarters whereas ‘minuses’ are continuing in the sector of rental houses. The indexes for the fourth quarter of fiscal 2009 (January-March 2010) are plus 54 points in the number of total order receipt (plus 19 points) and plus 50 points in the amount (plus 17 points). Both figures showed big pickups. By sector, recovery is expected in all sectors including custom-built detached houses, built-for-sale detached houses and rental houses.

The Forestry and Forest Products Research Institute recently announced its findings that showed forest thinning changed the species composition of plants and increased the number of insects and the number of insect species for a short-term. The question of whether or not thinning of forest plantations is useful in the preservation or recovery of biodiversity has been attracting attention. The research institute compared the change in number and in species of various insects and lower stratum plants in cedar plantation forests that had undergone forest thinning and that had not (after one year and three years). According to the results, the species composition of plants changed after both one and three years, but a large change did not occur in the number of species and degree of spread (area covered by the plants). On the other hand, the number of insects and the number of insect species for all insect groups increased in the forest after one year of forest thinning. However, results after three years varied depending on group, and the difference with forest, in which thinning did not take place, tended to disappear. From these results, the effects of forest thinning were concluded to have changed the species composition of plants and to have increased the number of some insects and the number of some insect species for a short term.

On February 19, Oji Paper Co., Ltd. announced that it agreed with Korindo Group, a plywood manufacturer in Indonesia, to buy and sell shares of the group’s tree-planting company PT. Korintiga Hutani (KTH) and to do a joint venture. By this investment, Oji Paper is planning to stably procure papermaking wood chips made of sustainable forest resources, and in the future, it aims to do a general forest product business including plywood and lumber with the group. KTH got the business right of plantation from Department of Forestry in Kalimantan Tengah in Indonesia in 1998 and has already planted about 62,000 hectares. The company’s licensed area is about 98,000 hectares (including protection area), where it is planting eucalyptus and acacia trees. Oji Paper Company’s investment ratio is 34.34% of KTH’s issued stocks. The scheduled starting date of the investment is the end of February in 2010.

Dainihon Wood-Preserving Co., Ltd. (head office: Nagoya City) developed their own system for placing online orders and recently began using it to take orders for lumber products such as ‘hirakaku.’ After entering the product order page on the company's website, information such as product type, size, amount, and date of delivery is input on the order form and sent to the processing center. The company's western regional distribution center receives the order and sends information such as delivery status by e-mail to the person who placed the order or to the salesperson in charge. Orders for specialized sizes can be taken for specific products such as laminated foundations and ‘hirakaku’ made of Douglas fir (green and kiln dried), whitewood, redwood, and other wood types. This will be the first time for this kind of company to use such a delivery system classified according to customers. By installing this system, "speedy" sales that informs the person-in-charge about delivery status through direct e-mail and that decreases input work, becomes possible, and a speeding up in office processing is expected. In addition, customers can review their individual customer data from the past on the website, so the system is also useful for its function of managing data of customer orders.

According to a report released by Ministry of Agriculture, Forestry and Fisheries of Japan, gross forestry production in 2008 increased for the third consecutive years to ¥444,870 million (up 0.8% year on year). Of the total, ¥213,300 million (down 5.4%) was lumber production, which decreased for the first time in three years. On the other hand, production of cultivated mushrooms increased for the third consecutive years to ¥223,980 million (up 7.5%), which exceeded lumber production for the first time. In total, forestry production slightly increased. In softwood, lumber output decreased in cedar with ¥94,120 million (down 8.4%), cypress with ¥38,480 million (down 12.5%), and red pine and black pine with ¥8,230 million (down 4.5%). Only larch, Yezo spruce and Saghalien fir showed a slight increase to ¥35,050 million (up 0.2%). Lumber output of hardwood was ¥32,050,million (up 9.1%). As production of cedar in 2008 decreased 1.1% from the previous year and its price dropped, the outturn decreased for the first time in three years. Because of similar reasons, that of cypress also decreased two years in a row. The outturn of larch etc. remained unchanged from the previous year, because demand for these items is increasing as the material for plywood. Income earned by forestry production was ¥241,610 million (down 1.9%).

On February 2, Mitsubishi Corporation has announced that it signed a note for a strategic collaboration in the field of biomass fuel with Weyerhaeuser, the biggest forestry product company in the USA. In the note, the two companies pledged to jointly build a bio pellet manufacturing facility aiming to become a world-scale supplier. As a first step, they will start joint investment for bio pellet manufacturing facilities in the USA and a feasibility study for the partnership. Bio pellet is a solid fuel pressed in column shape and made from previously-wasted forestry by-products. By burning it with coals, coal-fired plants can reduce the green house gas emission. At present, they are planning to start operation of the first manufacturing facility in 2011. Depending on the survey results, they say they will establish more for more than one period.

On January 8, Mitsui & Co., Ltd. (Tokyo) announced that all 44,000 hectares of its forest land in 73 locations have attained the Forest Stewardship Council (FSC) certification on December 18. This was the first time in Japan for a private company owning more than 10,000 hectares of forest land to receive the FSC certification. Mitsui & Co. received the FSC forest management (FM) certification and the FSC chain of custody (CoC) certification. The CoC certification was attained by a subsidiary of Mitsui & Co., Mitsui Bussan Forest Co., Ltd., that is involved in the maintenance and management of the forests and the sales of lumber. By attaining this certification, all the lumber produced from the company's forests can now be sold as being FSC-certified, which will make the company a leader in handling FSC-certified lumber (domestic lumber) in Japan. In fiscal 2008, the company handled 48,861 m³ of material from its forests, and with this amount as a base figure, the amount of FSC-certified lumber to be handled by the company will leap to the top in Japan. The company will work on activities to protect forests that take into consideration the protection of biodiversity by conducting forest management that adheres to FSC standards, which can in turn show the function of the company-owned forests as a public benefit.

On January 21, the Ministry of Agriculture, Forestry and Fisheries held the 1st meeting of the Task Force to Promote the Forests and Forestry Management Revitalization Plan (Hirotaka Akamatsu, Minister of Agriculture, Forestry and Fisheries, as the head of the task force) at the ministry. With a purpose of creating a guideline for the rapid revitalization of forests and the forestry industry in Japan with a target of 10 years, the plan contains three basic ideas: 1) to show continuously the multifaceted functions of forests, 2) to revitalize forestry management and the lumber industry in a form that creates regional resources, and 3) to contribute to a low-carbon society by expanding the use of lumber and energy of forests and the forest industry. The plan also looks to shift the structure of Japanese society "from a concrete society to a wood society" and aims to raise the lumber self-sufficiency rating to over 50% in ten years. At the meeting, the items that were examined were classified into 5 categories: 1) basic policy for forests and forest industry, 2) network and operating systems, 3) reorganization of forestry associations and development of the forest industry businesses, 4) employee development, and 5) production, distribution, and use of domestic material. For each category, an examining committee with knowledgeable members was established. The topics will be examined by each committee. A midterm report will be made in June, and while looking ahead to the estimated budget request for fiscal 2011, corresponding policies will be examined.

Wood One Co., Ltd. (Hatsukaichi City, Hiroshima Prefecture) announced on January 26 that its related factories in Japan and its overseas affiliated companies acquired CoC certification (administration certification for the manufacturing and distribution processes) from Forest Stewardship Council (FSC). Newly certified four domestic factories are as follows: the factory of its headquarters, the Toyohashi factory (Toyohashi City, Aichi Prefecture), the Gamagori factory (Gamagori City in the same prefecture) and Kanto establishment (the Kanto Precut factory in Bando City, Ibaraki Prefecture). Overseas certified factories are four companies which break down into one in the Philippines and three in China. Wood One has already acquired FM certification (Forest Management certification) and CoC certification from FSC in February 2009 for all forests and all factories owned by its local corporation in New Zealand. With this new acquisition, the company has established a coherent shipment system of certified products within the group from forest management to end products. The company is planning to start shipping certified items in April this year.

Electric Power Development Co., Ltd. (J-POWER, Chuo-Ward, Tokyo) and Miyazaki Prefecture Federation Forest Owner’s Cooperative Associations have announced that they will jointly establish a woody pellet manufacturing company in order to produce fuel for power generation with forest waste. They are planning to build a factory in Kobayashi City in Miyazaki Prefecture so that they can start operation at the end of the next fiscal year. The name of the new company is Miyazaki Wood Pellet Co., Ltd, capitalized with ¥300 million. The factory’s acceptable amount of forest waste is 80,000 cubic meters annually, and its pellet production capacity is 25,000 tons. The factory will manufacture pellets after it smashes, dries, presses the forest waste which the Cooperative Associations supplies. The pellet will be burnt with coal in the boiler of the company’s Matsuura heat power station (Matsuura City in Nagasaki Prefecture) as the fuel for power generation. This mixed combustion, done as “a proofing project of mixed combustion power generation using forest waste biomass and coals” by New Energy Promotion Council, will reduce the emission of carbon dioxide by about 40,000 tons a year compared with coal combustion.

JK Holdings Co., Ltd. (Tokyo) and Nanning Xiening Building Materials Co., Ltd. have agreed that they will establish a company to manufacture and sell eucalyptus plywood in Nanning City in Guangxi Zhuang Autonomous Region in China and concluded a joint-venture contract on December 14 in 2009. The signing ceremony, held in Shanghai, was attended by chairman Yoshida of JKHD and President Huang and related persons from Nanning Xiening Building Materials. On behalf of the both sides, chairman Yoshida and President Huang signed the contract. Plantation of eucalyptus in China is concentrated in Guangdong, Guangxi, Hainan, and Yunnan. Among them Guangxi has the greatest area of plantation. This project aims to manufacture earth-friendly plywood mainly from eucalyptus trees systematically planted in Guangxi and to sell it in China and all over the world. The companies are planning to go through procedures so that they can start operation in July 2010. The new company is capitalized at 20 million Chinese Yuan, 70% of which is invested by Nanning Xiening Building Materials and 30% by JKHD.

Real Estate Economic Institute Co., Ltd. has announced supply forecast for the market of condominiums in the Tokyo metropolitan area and the Osaka metropolitan district in 2010. The expected supply of condominiums in Tokyo area is 43,000. Due to the resurrection of ceased or postponed construction works and the emergence of new projects, the number increased 23% from the estimate of 2009. The supply is estimated to increase to the same level as in the year before last centering Tokyo’s 23 wards and Kanagawa prefecture. The market will be moved by major companies not by small and medium sized companies, supply for which is expected to continue dwindling under their tight financial situation. Medium and small scaled condominiums centering about 100-unit condominiums will be the main force. Though superhigh-rise and supersized condominiums are still popular, suppliers tend to escape construction of those types due to the risk. Forecast for 2010 expects the supply in the Osaka area will increase 11% from the estimate of 2009 to 22,000. The reason for the increase is that suppliers will start selling condominiums after they postponed it during the “ice period of condominiums”.

Yamaha Corporation (Hamamatsu City) has announced on November 19 that it started negotiations with an investment fund, Japan Industrial Partners Inc. (Chiyoda Word, Tokyo), about stock transfer of its 100% subsidiary, Yamaha Livingtec Corporation (Hamamatsu City), which deals with household equipment such as ready-to-assemble baths. Yamaha Corporation is expecting to reach a final agreement next spring. It is planning to provide for the majority shares and virtually withdraw from the housing industry. Details including the transfer price will be determined later. Yamaha Corporation says that amidst the decreasing housing starts, it judged Yamaha Livingtec will need to enhance its power to cope with the market by departing from the framework of the sound and music centered groups and expand its business in the medium and long terms.

Sumitomo Forestry Co., Ltd. (Tokyo) has decided at its board meeting held on November 30 that it will merge its 100% subsidiary companies, Sumitomo Forestry Crest Co., Ltd. (Tokyo) and Toyo Plywood Co., Ltd. (Ama-gun, Aichi Prefecture), as of March 31, 2010. After the date, Sumitomo Forestry Crest will be the surviving company and Toyo Plywood will go into liquidation. However, the notation of “To-Pla” will be strategically kept used for products of Toyo Plywood brand. Sumitomo Forestry Crest, a manufacturer of woody building materials, made Toyo Plywood, a manufacturer and distributor of housing equipment and building materials, its subsidiary in May 2005, and tried to strengthen and expand its business. This decision was made to concentrate and optimize their management resources and to establish effective and stable profit structure for the future when housing starts are expected to dwindle. Toyo Plywood Co., Ltd. was established in 1950 and is manufacturing and distributing housing equipment, building materials, plywood, chemical products, and furniture. It is capitalized at ¥600 million. Its total assets are ¥8,853 million.

Ministry of Land, Infrastructure, Transport and Tourism has announced the outline of “The Eco-Credit-Point System for Houses.” Up to now, the targets of the eco-credit-point were “houses which start construction on and after January 1, 2010 and finish construction and are delivered to the owner after passage of the supplementary budget.” However, for new homes, the commencement date of the construction was brought forward to December 8, 2009 when the cabinet approved the emergency plan. For remodeling works, the eco-credit-points will be given to following cases respectively: (1) Heat insulation retrofit of windows (installation of inner windows, double glass sashes), replacement of glasses (installation of multiple glasses) (2) Installation of heat insulators for outer walls, ceilings or floors (3) Making the house barer-free on the sidelines of the above. On the other hand, new houses will get eco-credit-points when they fulfill the following conditions: (1) They meet the Top Runners’ Standards (energy saving standards plus alpha) of the energy saving law (high-efficiency fuel-feeder and etc.). (2) They are wooden houses which meet the energy-saving standards.

Tokyo Electric Power Company has announced that it will start mixed combustion of coal and woody biomass such as forest waste and thinned wood. To start the project from fiscal 2012, it will start acceptance of woody biomass fuel and construction of infrastructure for mixed combustion. The implementation site is the company’s Hitachinaka Thermal Plant (Tokai Village, Naka ‘Gun’ in Ibaraki Prefecture), which expects to cut 110,000 tons of carbon dioxide by using 70,000 tons of woody biomass fuel per year. This amount is equivalent to 20,000 general households’ annual CO2 emission. Woody biomass is compacted woodchip. The plant will burn the mixture which contains 3% of biomass against coals after it crushes them. A test installation will starts in the Number 1 machine of the plant in fiscal 2011, and operation is planned to start in the Number 2 machine after December 2013.

According to a private credit research organization, Sanwa Home (Showa Town, Nakakoma, Yamanashi Prefecture), which rapidly grew in a short time as a manufacturer of order-made homes constructed with Kiso (area name) cypress wood, filed papers for and received bankruptcy protection under the Civil Rehabilitation Law at Tokyo District Court. With 550 creditors, total debt was about 4.0 billion yen (financial liabilities of 2.7 billion yen). Currently as a sponsor, Morizou Co., Ltd. (Chiyoda, Tokyo) made a proposal and declared to guarantee completion of construction to customers and to guarantee payment after making a statement to the business customers. At its peak in the October 2003 period, the company constructed 800 units with an annual turnover of 25.0 billion yen, but after that, orders decreased, and the amount drastically fell to 14.6 billion yen in 2007 and to 9.1 billion yen in 2008 with deficits accumulating to 3.7 billion yen. During that time, the number of employees and of model houses on exhibit were greatly reduced, but declining orders and a sudden change in business conditions, the company abandoned plans for self-administered restructuring failing to come up with satisfactory business and management plans for the future.

On November 30, Emori Co., Ltd. (head office: Imizu City, Toyama Prefecture) applied for voluntary bankruptcy. Also on the same day, a related company, Emori Kenzai Kogyo Co., Ltd., applied for bankruptcy protection under the Civil Rehabilitation Law. Debt was said to be about 3.2 billion yen and 600 million yen respectively. Emori was established as Emori Mokuzaiten in 1931, and in 1971, the long established store in the Hokuriku area was incorporated as Emori Co., Ltd. As one pioneering company in handling the importing of Russian lumber from the mid-1950's, the company also has joint enterprises in China and Russia and a large business base in the Hokuriku area. As a large stockholder, the president of Emori also holds the position as president of a related company, Takaoka Mokuzai Ichiba Ltd., which will continue with business as usual with a change of presidents.

R. C. Core Co., Ltd. (headquartered in Shibuya Ward in Tokyo), developing a series of nature-friendly designed houses “BESS,” held a press conference to introduce a show house of its new product “BOLLOX.” Characteristics of this product are “Uncompleted, Design as you like.” When President Hutagi considered what his company could do for young first-time home buyers who “want to customize the house in accordance with their own tastes” or “want to acquire a house as cheaply as possible,” he came up with those characters. By using blue-stained lumber as the material, the company defied the common wisdom of the industry that “imported logs used in Japan are all J-grade.” “As everybody knows, blue-stained logs have no problem in quality when they are used as structural lumber. The problem is the color. However, we have decided to call them denim logs and explain our clients the reason for doing so and let them understand our using them.” (A person in charge) In addition, we cut the cost drastically (a 32-‘tsubo’ house is about ¥14,000,000) by using OSB and Japanese larch plywood for interior.

Mr. Kamiyama, the chief director of Timber and Building Material Business Department of Sumitomo Forestry Co., Ltd., gave a lecture at a seminar of Tokai Sumirin Association and said, “As housing starts went below the 700,000 unit mark on an annually adjusted basis and houses are required to become more and more environmentally-friendly, we need to come up with new business models for growth.” And he explained his company’s policies for the future as follows: (1) The company will sell symbiosis plywood. It will build up a private brand of plywood using forest certified wood and plantation wood by more than 50%. It will sell plywood items which it started production in Liaoning province in China on October 18 using poplar as the material in the country for the time being; however, it will start selling them also in Japan in the future. (2) It will increase the number of its shops to 150 in order to cope with photovoltaic generation. (3) It will expand environment-related projects such as active utilization of domestic wood. It will sell “hybrid beams” made of cedar and cypress and “Futago posts (two-ply cedar laminated posts)” in limited areas. (4) It will stimulate demand in the remodeling market. (5) It will deliver all necessary materials for one house in a package using the function of transshipment centers of the company’s housing business department.

On October 23, the government completed Emergency Employment Measures, and promoting the revitalization of forests and the forest industry was raised as one important item, and work on drawing up the Midterm Forest and Forest Industry Revitalization Plan (tentative title) within the year as a goal is moving ahead. The main points of the basic plan for forests and forest industry for the next term are expected to be included in the revitalization plan. The current basic plan with a five year term was decided upon at a Cabinet meeting in September 2006, but moving ahead with a revision is being examined. Concerning forests and the forestry industry, the Emergency Employment Measures will carry out worker training and the consolidation and intensification of forestry management, which will assist forestry revitalization projects and the acceleration of forest maintenance and which stood out in the revised budget for this fiscal year. The policy also will increase employment in this field by promoting items such as new participation from the construction industry. In addition by using projects such as the creation of emergency employment and special funds for the revitalization of "hometown" employment provided by the Ministry of Health, Labour and Welfare, the measures look to create new employment for about 80,000 people with a plan to train and develop jobs such as forestry management planners and road and transport network technicians.

Tostem Corporation (head office: Tokyo) recently announced the closing of its Ayabe factory (Ayabe City, Kyoto), which manufactures interior building materials made of wood, at the end of next March. Following the decrease in housing starts and the move towards overseas production, the closing of the factory was decided as part of a move to reorganize and to concentrate domestic production bases. The manufacturing functions will be transferred to the company's Sukagawa factory (Sukagawa City, Fukushima Prefecture), Nabari factory (Nabari City, Mie Prefecture), and Dalian factory in China. The Ayabe factory began operating in August 1995. The site of the factory covers an area of about 190,000 square meters. The factory manufactures interior building materials made of wood such as doors, closets, and flooring material and currently has a monthly production value of about 450 million yen. The number of employees is 377, of which 171 are full-time employees. The full-time employees will maintain their employment by being placed in companies within the Tostem group, but the contracts for part-time and temporary employees will be terminated with the closing of the factory.

Nippon Paper Industries Co., Ltd. (head office: Tokyo) finalized "The Agreement Concerning the Use of Unused Lumber as a Resource for Paper" between its Fuji factory, the Environmental Protection Division of the Shizuoka Prefecture Government, and the Shizuoka Council for the Promotion of Creating Abundant Forests. With the agreement, the three groups will work in cooperation and in solidarity with the purpose of using unused lumber as a resource for paper and promoting the gathering of wood from forest thinnings. The features of the agreement are: 1) local production, local consumption. Wood cut from forest thinnings by forest owners in Shizuoka Prefecture will be purchased as wood chip by the Fuji factory, which is also located in Shizuoka Prefecture. By using the material as a resource for paper, an objective is also for a "society using a circulatory system" to take root in the region by way of local production, local consumption. 2) Sales of the paper will proceed, and then the gathering of wood from the forest thinning that is equivalent to the sales volume will take place. In this manner, the expenses for the promotion of forest thinnings, which is added to the sales of paper, will be secured in advance, and forest thinnings will be more definitely promoted.

Budgetary requests for fiscal 2010 have been announced. The Hatoyama administration undid the budget requests submitted by ministries and agencies at the end of August. It had ordered them to check their requests again and resubmit revised ones by October 15 in order to cut the budget. The total budget for the Ministry of Agriculture, Forestry and Fisheries has become ¥2,407.1 billion, 6% less than the previous fiscal year. In the amount, a total of ¥338 billion is related to forestry. The figure decreased by more than ¥100 billion or 23.8% from ¥443.3 billion submitted at the end of August. And the budget for general public works was curtailed as largely as 30.3% to ¥221 billion from the former request of ¥316.9 billion.

MINISTOP, running convenience stores nationwide, has announced that it will increase the number of wooden shops which are built with domestic timber certified by FSC (Forest Stewardship Council). By using FSC certified lumber at a rate of 10% in its shops, it is planning to help the Japanese government to reduce CO2 emission as it announced to cut it by 3.8% by forests in Kyoto Protocol. This project is going to be implemented by MINISTOP designing team jointly with KEY TEC (LVL and precut manufacturer) and Kitajima (builder) which obtained FSC certification. The first shop which will obtain FSC certification as a building will be the shop of MINISTOP Koshigaya Lake Town Higashi (scheduled to open mid December). The company is planning to continue opening more than 20 shops per year. It explains the advantages of wooden shops as follows: (1) they can cut CO2, emitted during accessing to resources and producing resources, by 33% compared to steel structures, (2) CO2 fixation of the wooden materials will be 1.4 tons per shop, and (3) used lumber is resolvable and recyclable.

The Forestry Agency recently compiled and made public a report concerning trends in the production of specialty forest products in 2008. Last year, the total value of production of specialty forest products was 302.6 billion yen increasing 8.2% compared to the previous year. Mushrooms, which account for more than half of the value of production of specialty forest products, are on a long-term increasing trend in terms of the overall amount of production. Among the listed items, the value of production of dried shiitake mushrooms and bunashimeji mushrooms had a two-digit increase compared to the previous year. Due to favorable weather conditions, matsutake mushrooms also greatly increased 40.7%. Excluding oyster (hiratake) mushrooms, the value of production of other varieties of mushrooms also increased. On the other hand, the amount of imported fresh shiitake mushrooms decreased 53.0% compared to the previous year. After mushrooms, bamboo sprouts increased a large amount compared to the previous year due to a heightened demand for domestically produced products and to an outstanding year in the major producing regions. For non-food, specialty forest products, the value of production of lacquer trees increased 35.9%, but many of the other listed items decreased in both value and amount produced.

The Japan Federation of Forest Unions recently announced the results of the amount of lumber and lumber products that were proven to be legal and handled in fiscal 2008. The survey covered the time period from April 2008 to March 2009 and targeted .business entities approved by the Japan Federation of Forest Unions and by the federation of forest unions in each prefecture. For the amount of lumber and lumber products (total number, shipped amount) handled, the amount of material production was 34.637 million m³, and the amount of material in distribution was 4.473 million m³. Within those amounts, the amount of material production that showed proof of legality was 2.279 million m³, and the amount of material in distribution that showed proof of legality was 2.118 million m³, and the percentages were 66.3% for material production and 47.3% for material in distribution. On the other hand, for the amount of lumber and lumber products (total number, shipped amount) handled among lumber processing, the amount of material production was 1.394 million m³, and the amount of material in distribution was 0.610 million m³. Within those amounts, the amount of lumber processing that showed proof of legality was 0.883 million m³, and the amount of material in distribution that showed proof of legality was 0.577 million m³, and the percentages were 63.3% and 94.6% respectively.

Hosted by the Council of Forest Industries Canada (COFI), a Japan-Canadian environmental seminar titled "Carbon Footprint of Wood, Structural Material and Long-Life Wooden Construction" was held on September 18 at the Canadian Embassy. With the rising concerning in measures to stop global warming such as the understanding and reduction of carbon dioxide emissions in recent years, an awareness to press for a fixed amount of carbon dioxide and to re-absorb it with trees by the active use of lumber is rising in the field of construction. With this backdrop, experts in life-cycle assessment (LCA) from Canada and Japan were invited to the seminar, and an opportunity was provided to explain concretely carbon dioxide revenue and expenditures in wood constructed housing. The lectures included the following content: 1) survey results of long-life wooden buildings implemented in Canada, 2) introducing an example of urban rental housing with a theme of the possibility of fire-proof, wooden buildings in Japan, 3) LCA survey results of wood constructed condominiums and apartments in Japan, 4) carbon footprint survey of Canadian-made wooden, structural material, and 5) introducing sustainable forestry management in Canada.

The Japan Federation of Housing Organizations (Judanren) recently put together and published the report, "Survey of Customers of Order-Made, Single-Family Unit Homes in Fiscal 2008". According to the results, 1) people in their 30's accounted for 45.3% of the householders of order-made, single-family unit homes, and within that group, people between the ages of 35 to 39 (the junior baby boomers) accounted for 23.8% of the total. 2) "Rebuilding a home" decreased 33.9% while "purchasing to change homes" decreased 6.8%, but on the other end, "purchasing land and a new home" was on an increasing trend of 43.4%, and the increase in first time buyers was remarkable. 3) The annual household income decreased a large amount of 210,000 yen compared to the previous fiscal year. 4) The expense for acquiring a home was 5.83 times larger than the annual household income, which was a decline in the rate compared to the previous fiscal year, but the rate of the annual income to the loan was 3.73, which was the highest ever. 5) The type of housing loan interest rate was "fixed interest rate for a selected term" with 50.9% accounting for half of the total, but "floating rate loans" increased from 11.6% to 23.3% in the fiscal year. Loans with "all term fixed interest rate" declined from 24.6% to 16.8%. 6) Among "rebuilding a home," the average lifespan of a home is on an increasing trend year after year, a home with a lifespan of 30 years or more accounted for 66.2%.

From October 1, Law for the Execution of Warranty against Housing Defects, which ensures that responsibility is carried out in guaranteeing against housing defects, came into effect. This law is a measure that ensures funds are available when newly built homes are handed over beginning on October 1, 2009 by requiring a business to have insurance coverage or a security deposit. This measure to ensure funds are available even if the buyer or the person placing the order does not need it, makes it required regardless of the buyer's will, and as a mandatory clause for housing construction, it will have a large effect. Since it is seen that many businesses will use the method of getting insurance coverage, five specified insurance companies (six companies from October) have been accepting and handling the insurance coverage since June of last year. On September 25, the Ministry of land, Infrastructure, Transport and Tourism announced the current situation for insurance applications for the housing warranty against defects. According to the announcement, from June of last year to September 1 of this year, the number of insurance applications was 184,823 for single-family homes and 150,482 (6,188 buildings) for apartments and condominiums for a total of 335,305 units.

With demand expected to be 800,000 m³ for the year, the change to domestic material for plywood used as concrete form is seen as moving ahead. Comprised of people closely involved in the plywood industry, a committee that examines technology for domestic plywood such as cedar used for concrete forming recently announced their mid-term report including concrete views on the topic of quality and costs and on development. Also in the Forestry Agency's estimate cost for the next fiscal year, a promotion to use domestic lumber in plywood for concrete forming was included, so high expectations are being made on the change to domestic lumber in the plywood field, which is shown to have an overwhelmingly high volume. For plywood used as concrete form, imports from mainly Malaysia and Indonesia account for 93% while domestic products account for 7% (2007), and the amount of demand in 1998, which was slightly under 1.80 million m³, decreased by a half in 2007 to slightly under 0.90 million m³. In addition in recent years, the demand for concrete forms made of metal such as steel and aluminum, which excel in terms of cost, is increasing in the field of civil engineering and construction, and the share of non-wood molding frames has increased to about 30% in the same field.

The Forestry Agency recently released its report concerning damage by pine weevils in 2008. According to the report, the amount of damage from the pine weevil increased from the previous year for the first time in six years to 626,100 m³ (1.1% increase compared to the previous year). Within this amount, privately-owned forests accounted for 591,100 m³, and government forests accounted for 35,100 m³. Excluding Hokkaido and Aomori Prefecture, damage occurred in the pine forests of 45 prefectures and major regions. Among these regions, damage occurred on the coast of the Pacific Ocean in the south central area of Iwate Prefecture and on the coast of the Sea of Japan in Akita Prefecture near the boarder of Aomori Prefecture, so there are fears that damage will spread further north in the future. The region with the most damage was the same as the previous year in Nagano Prefecture with 63,600 m³ (26.2% increase) followed by Kagoshima Prefecture with 58,600 m³ (60.1% increase), both regions increasing a large amount from the previous year. The amount of damage was also 44,900 m³ (16.6% increase) in Iwate Prefecture and 44,100 m³ (11.0% increase) in Fukushima Prefecture. As for a cause to the rise in damage, the Forestry Agency stated that the increase in damage in the most heavily damaged area of Nagano Prefecture, Iwate Prefecture, and other areas was due to the high temperature and low amount of rain during the summer.

Real Estate Economic Institute Co., Ltd. has released survey results on market trends of condominiums in the Tokyo metropolitan area in August. According to the report, 1,914 units (down 6.2% year-on-year, down 40.7% month-to-month) of condominiums went on sale in the same month, registering the 24th month of year-on-year loss. Though the range of drop is smaller than before, there is no sign of recovery. Contract rate dipped below the 70% level to 69.3% (down 1.6 points, down 6.0 points), after it had maintained the 70% level for the previous three months. The price per unit was ¥43,140,000 (down 10.1% year-on-year), and the sales inventories were 7,037 units (down 409 units from the previous month-end). This shows that the industry is trying to reduce its inventories by selling them at low prices. Sales forecast for September is around 2,200 units, which is less than 2,427 units or the result of the same month in a year earlier.

Aiming to spread the use of wood material produced in Nagano Prefecture, the Council for the Development of Outlets for Material Produced in Nagano Prefecture conducted strength tests on 2 x 4 studs for posts in wall frames made from Shinshu larch and Shinshu red pine. As a material of high durability for 2 x 4 housing, to what degree pine produced in Nagano Prefecture could perform was tested under the utilization of the “Project to Promote the Activation of Regional Markets for Housing Built of Wood” by the Ministry of Land, Infrastructure, Transport and Tourism. For the experiment, 480 pieces (240 pieces of red pine and 240 pieces of larch) of material for posts with a water percentage of 15% or less were prepared, and stretching and bending test based on JAS standards were performed. In a non-breakage test, the strength was found to be at a level of E100 to E130 (for 1st grade of red pine) according to a grade distinction of machinery. According to the person in charge of the experiment, "rather high figures were reached" even in the breakage tests. An individual at the company in charge of the experiment, Soyano Lumber (Matsumoto City, Nagano Prefecture), said, "The strength of pine produced in Nagano Prefecture is high compared to the number 2 grade SPF in general distribution. Utilizing a structural design with this standard, long-term excellent housing can be supported by 2 x 4 construction." 2 x 4 housing using posts in wall frames made with Shinshu larch and Shinshu red pine is scheduled to be built with in the year in Aichi, Kanagawa, and Shizuoka.

Wood fiber Co., Ltd. (Sapporo, Hokkaido) recently completed construction of factory in Tomakomai City to manufacture wood fiber heat insulation material made from fir and larch gathered from forest thinnings in Hokkaido. Currently, the factory is undergoing test operations, and shipments to the market will begin in September. A supply of 50,000 m³ is targeted for the first year. The company was established in July 2007 by joint capital from a venture business of Hokkaido University and from the construction, forestry, and machinery industries in Hokkaido, and the company was named after the business field it is involved in "wood fiber." The aim of the company is to produce domestically wood fiber heat insulation material made from domestically produced material. A technological consignment contract was made with Homatherm, a German company that wood fiber heat insulation material, and a production line was built. Preceding the construction of the factory, import sales of Homatherm's wood fiber heat insulation material has been conducted for the past three years. The material for the product to be produced domestically is wood chip made from fir and larch that account for a large part of the man-made forests in Hokkaido. This material is manufactured into a fill-in heat insulation material (bag-type) for traditional wood construction and wood frame construction or into an exterior application heat insulation material (board-type). It will then be processed into a variety of sizes for walls, ceilings, and roofs. The thermal conductivity is assumed to be 0.038 W/mk, the same as Homatherm. With a total floor area of about 6,000 m², the factory can supply 300,000 m³ a year when in full operation. Compared to inorganic heat insulation material such as glass wool and rock wall, wood fiber heat insulation material is expected to effective in terms of thermal storage and sound absorption, but due to the cost barrier, it has not gained in use and popularity. According to the company, it can cut costs by holding down transport costs with domestic production. At the present time, prices have not been decided.

Teikoku Databank, Ltd. recently conducted a survey and analysis regarding major homebuilders. The results showed the total profit after taxes for 129 major homebuilders in 2008 was approximately 110.781 billion yen (44.2% decrease compared to the previous year) falling to almost half from the previous year. With a boom in the market for the past few years in the background, every homebuilder, both large housing manufacturers and small building companies continued to have good business results. However, with the implementation of the revision in the Building Standards Law and with the recession since last autumn, a slump in sales became apparent when consumer psyche became cold and bleak. Recently, many homebuilders are being hampered by the credit crunch. Among the 129 homebuilders, 96 companies continued from the previous year to be in the black, and 21 companies fell into the red. Also in the results, 7 companies shifted from the red into the black, and 5 companies continued to be in the red for two consecutive years.

Katsuno Wood (Nagiso, Nagano Prefecture) began production and sales of "KD hirakaku lumber made from Shinshu larch in Kiso". Larch is difficult to dry, but its strength and durability are excellent. In addition, because it is beautiful and has a relatively low price, it is seen as having potential in being used for cross beams. The amount of accumulated logs from only the local national forests totaled 1.6 million m³. Including privately owned forests, the accumulated amount is enormous, and forest thinnings of this amount will actively move ahead in the future. The wood gathered from the forest thinnings will be used in system sales by the Kiso Lumber Market Cooperative for plywood, laminated wood, lumber products, and public works. Katsuno Wood mainly receives orders through the systems sales for aged lumber over 30 centimeters and has repeatedly conducted empirical experiments on drying and deformation of larch wood. Through the experiments, the company has gained confidence in their dried lumber, which has a balanced water percentage of 15% when finished and has no deformation. Using a lumber drying kiln with a super-heating method, the drying method dries the water percentage to 10%, and with a resting period, the percentage is then returned to 15%. The strength has a Young's Modulus of about E120 to E130. Currently, about 1000 pieces of various sizes are in stock, and the president Katsuno said, "For the time being, we plan to sell the amount for about two or three housing units per month, but next year, we'll build an actual production line."

The research laboratory of the Graduate School of Environmental Studies of Tohoku University recently conducted trial calculations that showed the effects of the carbon dioxide reduction of one wood-burning stove corresponding to five hybrid cars. In cooperation with the Kawasaki-Sendai Wood-Burning Stove Association, which produces firewood in Kawasaki Town in the forest region of Miyagi Prefecture, the research laboratory surveyed the amount of firewood production and consumption and the reforestation conditions of deforested land. With the premise of being "carbon neutral" in that the carbon dioxide emissions are offset by its absorption by the growth process of plants, the advantages of wood-burning stoves was quantitatively demonstrated. The trial calculations showed that when using a wood-burning stove made in Europe or North America, which has a high heating efficiency, one stove consumes about 6 m³ of firewood in one year. To attain the equivalent amount of energy as this, the necessary amount of kerosene was calculated to be 1,200 liters. If the amount of carbon dioxide emitted when this is burned is thought to be reduced, the reduction effect of a wood-burning stove was concluded to be about 3 tons a year. On the other hand, hybrid cars use about 40% less gasoline than gasoline-fueled cars, and the amount of carbon dioxide reduction was calculated to be about 0.6 tons a year. From the above, the amount of carbon dioxide reduction of a wood-burning stove is five times as much as a hybrid car, or in other words, the calculations showed that a wood-burning stove has the reduction effect of five hybrid cars.

From November 21, Daiken Corporation (Osaka, Japan) will put "Fores Hard" into the nationwide market as a limited product; "Fores Hard" is a scratch resistant floor made with "E- Hard Base," an ecological floor base boards made from domestic softwood. General South East Asian material for plywood to be used as a floor base material is forecasted to be in a condition in which acquisition will become difficult in the future from the viewpoint of environmental conservation. Every company in the industry is currently searching to shift to a new foundation material. The company is moving ahead with the change to ecological floor base boards for wood floor materials, and last year, it developed "E- Hard Base," which is a floor base material that combines special MDF and lumber from afforested hardwood trees. Products made from this were put into the market, and the percentage of ecological floor base boards rose. This will be the first time in the industry for ecological floor base boards that are used in "Fores Hard" to be combined with special MDF and lumber from afforested, domestic, softwood trees. By investing in products that use domestic softwood following the use of afforested hardwood trees, the percentage of ecological floor base boards rose faster and is planned to reach 70% by the end of the next fiscal year.

Japan-China Private Cooperation Committee for Afforestation has held its tenth meeting in a meeting room of the Foreign Ministry. The committee was established in November 1999 in order to support Japanese bodies in their planting trees in China after the governments of Japan and China exchanged official documents. It holds a meeting once a year. At the beginning of the meeting, the implementation state and the evaluation of afforestation projects in the previous fiscal year were reported. According to the report, the projects covered a wide area in 28 provinces in China, where various implementation organizations including Japanese private bodies planted trees, and they are appreciated as the leading efforts among the private afforestation cooperation activities in China. With 74 cases or about 5,200 hectares of afforestation in last fiscal year, the committee has afforested about 35,700 hectares of area in nine years since its start-up. The committee has also conducted an investigation on 50 projects which finished the aid about the management conditions of the forests after afforestation. And the conditions were reported to be recognized basically well kept.

On July 14, the Real Estate Economic Institute Co., Ltd. announced the results of a survey of condominium market trends in June. According to the results, the number of condominiums sold in the Tokyo Metropolitan area in June was 3,080 units (23.0% decrease compared to the same month last year and 12.9% increase compared to the previous month). This was the 22 consecutive month of falling below last year. Along with these results, the institute also put together the market trends of condominium in the Tokyo Metropolitan area for the first half of 2009 and made them public. Supplies in the first half of 2009 fell a large amount to 15,898 units (26.0% decrease compared to the same period last year). The average price for a condominium also fell to 44,810,000 yen (7.1% decrease). With future prospects looking severe, the forecast for supplies in the second half of the year is 18,800 units (15.5% decrease compared to the actual results of the same period last year). Due to this, the forecast for supplies for the full year was revised downward from the previous forecast (47,000 units) to 35,000 units.

On July 14 in Miki City, Hyogo Prefecture, an earthquake simulation experiment using an earthquake shake table was conducted on a seven-story apartment building. The experiment on this building, which was constructed of wood from the second story and above, was conducted in collaboration with Colorado State University as part of the NEES WOOD Group and the National Research Institute for Earth Science and Disaster Prevention, an independent government agency in Japan. The test on the building had a seismic magnitude 1.8 times the size of the 1994 Northridge Earthquake that occurred in America. Ainsworth Lumber Co., Ltd., which is headquartered in Vancouver, Canada, participated in the experiment and provided the OSB used in the foundations for the ceilings, walls, and floors. Ainsworth also participated in the "Experiment to Test the Earthquake Seismic Resistance of the Conventional Post and Beam Construction Method" that was conducted on September 25, 2008 in Tsukuba City. For the experiment, the company provided OSB panels for structural use, and the experiment showed that the conventional post and beam construction method has the earthquake seismic resistance performance for an earthquake 1.5 times that of the earthquake in the Hanshin Disaster.

At Emachu Mokuzai Co., Ltd., the amount of logs and wood products handled between April 1, 2008 and March 31, 2009 was 29,000 m³ (-38.6% compared to the previous term) with sales of 761 million yen (-36.4% compared to the previous term) for logs and 69,000 m³ (-15.7% compared to the previous term) with sales of 3.158 billion yen (-10.6% compared to the previous term) for wood products. Among the list of products handled by the company, greater importance is shifting from logs to wood products. At Emachu Plywood Co., Ltd., lumber used for 2 x 4 construction, for conventional construction, and for laminated lumber all decreased in sales, but because specialized plywood for play equipment was a hit product, sales of plywood increased a large amount of 44.3% compared to the previous term. For the company, sales amounted to 1.757 billion yen (-17.0% compared to the previous term) for lumber, 944 million yen for plywood, 2.103 billion yen (-20.4% compared to the previous term) for fiber board, and 565 million yen (+37.5% compared to the previous term) for other products. For this fiscal year, the plan is to put effort into sales of all building materials and products that made of domestic wood.

Six companies including INAX (Tokoname City in Aichi Prefecture) went to Mr. Tetsuo Saito, Minister of the Environment, on June 23 and reported the implementation state of their “Pledge of Eco First” which they made in June 2008. Under “the Pledge of Eco First”, companies promised the minister that they will cope with the issues of environmental preservation including global warming. INAX announced the contents of its voluntary targets in “Environmental Declaration in the 10th Medium-term Management Plan” (started in April 2008) which includes that it will “reduce total CO2 emission in 2050 by 80% compared with that in fiscal 1990.” It is engaged on reduction of environmental burdens. President Kawamoto reported his company’s performances which are being promoted in the flames of “produce,” “use,” and “recycle” as follows – (1) reduction of its total CO2 emission in 2008 by 27.9% from 1990, (2) indication of the reduced CO2 volume of commodities, sold through catalogues, when used, and (3) recycling projects of wood waste left after house remodeling works. Companies which gave their reports this time were BICCAMERA Inc., UNY Co., Ltd., Kirin Brewery Company, Limited, Lion Corporation, INAX Corporation, and Sekisui House, Ltd.

After merging with PWI, a company that manufactures fittings and fixtures in Indonesia, Sumitomo Forestry Co., Ltd. recently established a manufacturing company in Indonesia. The company was capitalized at 5.1 million dollars (the percentage of investment was 51% Sumitomo Forestry and 49% PWI). The number of employees is about 180 people. The company manufactures and sells wood products for the interior to Sumitomo Forestry and to the foreign and domestic markets. By establishing this manufacturing base, the company is targeting a plan to complement the “middle portion” of a vertical, business structure that integrates the forestry business on one end to the housing business on the other end. With this plan, the company is expecting synergy effects such as stably supplying original material for structural parts, expansion of products, entering new fields, and providing material for structural parts to the real estate and remodeling/reconstruction business.

Sponsored by the nonprofit organization, Sainoki, Talk Café was held on June 13 at Seihoku Gallery in the University of Tokyo Yayoi Auditorium, Annex. The theme was "Material from Forest Thinning and the Carbon Business." Plans are being made for national land conservation and reducing CO2 emissions through the use of material from forest thinning and leftover forestry material, which are unused lumber resources. Chiaki Konishi, chief of the second group in charge at Toshiba Corporation's Environmental Systems, spoke about the topic titled "From the Standpoint of a Business." Currently developing a project that uses leftover forestry material to manufacture nano carbon, Toshiba Corporation is already constructing a plant in Hita City, Oita Prefecture. During the presentation that offered a dream such as "if it is a tree, anything can be used" and "if it is put into practical use, tons of lumber will be used each day," many questions were drawn from the audience.

The 5th Japan Credit Certification Committee was held on June 19, and it has accepted 11 applications of emission-reduction projects in the fields related to agriculture, forestry and fisheries. According to the Ministry of Agriculture, Forestry and Fisheries, seven cases among them were projects of sawmills that convert their boiler fuels from kerosene to woody biomass. In CO2 emission trading, potential demand for woody fuels including bark, pellets, and chips seems to be so high that they are eagerly sought after by various fields. This time, all of the 11 applications in the field of agriculture, forestry and fisheries are related to woody biomass. And in seven cases, emission-reducers (sellers of credit) are sawmills including forestry cooperatives. And among three applications of boiler establishment, two are planned by sawmills. Estimated amount of CO2 reduction per year is as much as 18,859 CO2-t in total. The number of applications filed since the first committee meeting reached 118 cases (about 110,000 CO2-t of reduction per year). Among them, 41 cases (about 60,000 CO2-t per year) are related to the field of agriculture, forestry and fisheries.

NCN has started provision of SE construction method for domestic lumber in earnest, jointly with Seihoku Group, Meiken Lamwood Corporation, Cypress Sunadaya Co., Ltd., and Saito Wood Industry Co., Ltd., through builders registered as constructors of this method all over Japan. When NCN was doing business individually with builders, “it was difficult to secure and supply materials having stable strength and quality” (said headquarters). So it could not start full-scale supply of them. By cooperating with Seihoku as the leading plywood manufacturer, Meiken as a manufacturer of structural laminated wood, Sunadaya as a maker of yellow cedar and cypress laminated sills, and Saito as a maker of laminated beams made from domestic larch, NCN has resolved the problems concerning domestic timber and made it possible to stably supply laminated wood of high quality and high performance. In addition, it is trying to secure the traceability by attaching legitimacy proof and certificate of origin issued by forestry cooperatives on laminas as the material for laminated wood. The company says, “Taking the logging timing into consideration, and trying to return our profits to the producing areas, we will supply long-life high-quality houses and contribute to promote the lumber industry in Japan and form recyclable society.

On June 4, the law to promote the spread of long-term excellent housing came into effect. Because certification standards are based on the housing performance display, the amount of homes that have accepted the performance display plan is without a doubt rapidly increasing. However, the initial construction cost will increase, but because rebuilding a home at an early stage becomes unnecessary, the cost burden of the home construction, acquisition, and maintenance slightly decreases, so some financial leeway is created in the lives of the people. In addition, new demand and investments related to housing such as necessary equipment and interior fixtures for renovation/remodeling, maintenance, and the distribution and sales of previously owned homes will be put forth in order for homes to continue to be lived in for a long time. From this point on, building contractors and building companies are expected to raise their technical skills and abilities related to areas such as inspection and examination, repair, maintenance management, as well as home construction that is possible for long term use, and they are also expected to work on employee development and training.

On May 22, Tokyo University of Agriculture, Japan Forest Technology Association, Japan wood energy Co., Ltd., and Hakuhodo Incorporated have started “Mountain Village Rehabilitation Support Center.” At the beginning of this fiscal year, the Forestry Agency started to cope with carbon offset using mountain villages’ resources and started “a project to cope with the rehabilitation of mountain villages by social cooperation” aiming realization of low-carbon society and mountain villages’ rehabilitation. As part of this project, four operating bodies including Tokyo University of Agriculture have established the center. They will support new active usage of mountains’ resources by cooperation between mountain villages and companies. The targets are challenges which actively utilize mountain villages’ resources as follows: (1) reduction of carbon dioxide emissions by active usage of forest resources, (2) stable supply of woody biomass to replace oil, (3) creation of businesses of new materials and energy utilizing forest resources, and (4) development of wellness businesses which feature characteristics of mountain villages. The center will offer support in various ways including matching mountain villages with companies.

The “Certified Log” propulsive movement is likely to become active including forest certified logs and prefecture-certified logs, as they guarantee recycling forests. The Ministry of Agriculture, Forestry and Fisheries has started studying “measures to promote usage of certified logs”, included in the 17th article of the submitted bill to stop global warming, and established a technical examination room on the basis that the bill submitted by LDP’s Kazuaki Miyaji, a member in the House of Representatives, will pass the Diet. At present, if you try to promote the usage of certified logs, their competitive edge at the market will be weakened because their prices are relatively high after the cost for certification is added to the lumber price when they are distributed. The ministry is trying to solve the problem by setting subsidy systems and new laws. In the future, a subsidy system is possibly installed. We should watch carefully.

On May 19, the Japan Laminated Wood Products Association held its 38th general meeting at the Yaesu Fujiya Hotel in Tokyo. The amount of domestic laminated lumber manufactured in 2008 was announced to be 1.29 million m³ stalling at 96% compared to the previous year. The amount manufactured for both structural use and furnishing use decreased compared to the previous year. The wood used as material for laminated lumber was 57.2% from Europe, 18.1% from North America, 17.5% from domestic, and 4.2% from Russia. Comprising mainly of laminated lumber manufacturers, 109 companies are currently participating in the association, and it is involved in work to increase demand for laminated lumber, in work related to the technological development and investigative research of laminated lumber and buildings using laminated wood, and also in surveys regarding the amount of domestically manufactured laminated lumber and imported laminated lumber.

On May 15, Nice Holdings Inc. (head office: Yokohama) announced its business results for March 2009. Sales amounted to 240.614 billion yen (6.5% decrease compared to the same period last year). Due to a drop in real estate value, valued loss totaled 6.88 billion yen with ordinary loss at 10.08 billion yen (2.062 billion yen profit) and net loss at 12.13 billion yen (884 million yen net profit). Based on departments, sales in the leading department of housing materials amounted to 175.941 billion yen (6.3% decrease) due to the motivation of consumers to acquire a home being low and due to the continuation of the softening of the lumber and building materials market. Due to the decrease in the number of sales of both condominiums and single-family houses, sales in the real estate department also stalled at 55.08 billion yen (12.8% decrease). In addition, with cost-cutting and with strengthening of the sales division, the forecast for the next period ending in March 2010 calls for a recovery in sales at 243.0 billion yen (1.0% increase compared to the results of the previous period), ordinary profit at 1.2 billion yen, and net profit at 500 million yen.

On May 25, the Japan Plywood Manufacturers' Association held is general meeting for the 2009 fiscal year at the Hotel Grand Palace. After the meeting, a press conference was held, and concerning the activities for this fiscal year, Chairman Atsuhiro Inoue pointed out, "In order to expand demand for domestically produced plywood, working to secure logs stably and continuously for producing plywood is an important task." Targeting the two major topics of "an industry to create the environment" and "an industry to create housing," he also declared the company will work actively on environmental problems and on making safe housing. Regarding this fiscal year's forecast for new housing starts, which has a huge impact on plywood supply and demand, 1.02 million units are forecasted, and plywood demand will be 6.00 million m³, and within this amount, 3.60 million m³ will be imported plywood, and 2.40 million m³ will be domestically produced plywood. Also regarding the price of plywood, he said that making a market price that takes into consideration the reproduction costs of raw materials (for afforestation costs) is necessary and that in order to achieve the target price, the current decrease in production will be maintained, and plywood production will be narrowed down.

JK Holding Co., Ltd., having Japan Kenzai Co., Ltd. as a major wholesaler of building materials as its core, has basically agreed with Itoki Corporation as a major manufacturer of office furniture to make a business tie-up. Itoki specializes in non-housing fields while JK Group specializes in the housing field. Itoki’s product development is one of the themes of this business tie-up. As development of environmental-friendly wooden furniture is planned, the JK Group will cooperate on it. They will cooperate also in overseas strategy. In China, the JK Group opened business offices in Shanghai five years ago followed by those in Hong Kong and Dalian, and is planning to increase the number of offices there. On the other hand, Itoki has started sales in China when it established a sales office in Shanghai in 2006. With this basic agreement, they would like to cooperate in sales of building materials and furniture in China taking advantage of their strengths in respective fields.

JS Group (Tokyo) formally announced that it has agreed with a leading company of kitchen units Sun Wave Corporation (Tokyo) to enter into a business tie-up with a view of capital tie-up. Having operating companies such as Tostem which specializes in building materials centering sashes and INAX which specializes in sanitary business including sanitary china and system bathroom, JS Group has wide-ranging experience in the total housing equipment business. Meanwhile, Sun Wave holds the top share with 19% (JS holds 9%) in the home kitchen business centering kitchen units. Under the circumstances where demand for the housing market is shrinking, JS Group would like to gain market supremacy by pursuing synergetic effects in development of products and procurement of materials by this business and capital alliance. JS Group will become the top shareholder of Sun Wave holding 30% of its issued stocks.

The Research Institute of Construction and Economy and the Economic Research Institute of the Economic Research Association compiled ‘Forecast of Construction Investment Based on the Construction Economy Model’ at the present time of April and announced the forecast of housing construction starts. According to the forecast, the amount of housing construction for fiscal 2009 is forecasted to be 1,017,800 units. With the largest scale of tax breaks on home loans and low interest rates in 2009 as favorable factors, the possibility of a shift after falling below last year's level is high for the first half of the year, and the appearance of a recovery trend will come after the second half of the year. It is believed that a recovery in the willingness to purchase homes will take time, and an actual improvement in housing construction will come after 2010 because waiting for an increasing trend in earnings to become clear is necessary. Even after entering 2009, owner-occupied houses continued to slump to 302,600 units. Houses for rent will also be influenced by the effects of low interest rates, and its decrease is seen as relatively smaller than owner-occupied houses and houses built for sale, but it will still change to a low level of 453,800 units. In an environment in which the acquisition of capital is severe, houses built for sale will not avoid its continuing slump and is forecasted to be 252,400 units.

DKSH Japan K.K. (Tokyo) has announced on May 1, 2009 that it will take over the Japanese business of Michael Weinig Japan K.K. (Germany), the world market leader in solid-wood-processing machinery and equipment. DKSH Japan, a member company of DKSH Group headquartered in Zurich in Switzerland, runs consumer goods, performance materials, and technology business departments in Japan. It’s sales in 2008 were \35.6 billion. Weinig has been active for 30 years in the Japanese wood-processing market. With this acquisition, both parties intend to unveil substantial synergy potential across all range of products and service offerings. And they are planning to install high-quality products and service offerings which complement products and solutions of each other. Weinig’s business will perfectly integrated in the technology department of DKSH Japan.

Regional banks are also playing a role in creating forests. Made up of 56 regional banks (outlook soon increasing to 57), the "Volunteer Association of Regional Banks to Protect Forests in Japan" recently set up their activity plans for 2009 and announced their efforts in forest conservation activities that have been unified by networking information concerning activities in making forests by all the participating regional banks. In addition, they are scheduled to hold the "Kyoto Summit to Protect Forests in Japan" on December 4 in order to spread word about their activities. An exchange of information about creating forests is also taking place through two subcommittees: "Let's Enter Forests" and "Let's Build a Network." They have also reported on their efforts in tree planting activities and have plans to look into creating related businesses and environmentally related, financial products such as "forest funds".

Sumitomo Forestry Crest Co., Ltd. (head office: Chiyoda Ward, Tokyo), a timber and building materials subsidiary of Sumitomo Forestry Co., Ltd., announced that from May the “Carbon Footprint (CFP)” label will be voluntarily displayed on the domestic plywood manufactured and sold by the company. From 2006 in collaboration with Tokyo University of Agriculture and Technology, Sumitomo Forestry conducted life cycle assessment surveys for the group companies, and in 2007, a survey of the plywood manufactured at the Komatsushima Factory (Komatsushima City, Tokushima Prefecture) of Sumitomo Forestry Crest was implemented. From the results, the amount of greenhouse gas emissions from the time of the procurement of plywood raw materials to the manufacturing was made clear, so the CFP label became possible for the company’s products. Compared to imported lumber, which requires long distance transport, the amount of carbon dioxide emissions of the domestic lumber actively used by Sumitomo Forestry Group in Japan is markedly less at the raw material procurement stage. The company is moving ahead with the substitution of imported lumber for domestic lumber as raw material for the plywood manufactured by the company, and by making this change, the company is looking to reduce 1.2 kilograms of carbon dioxide emissions for each plywood board.

Major house manufacturers such as Sekisui House, Mitsui Home, and Asahi-Kasei Homes have announced policies to withdraw from general house exhibitions, which have received few orders and have had few attendees. Sekisui House will reduce their approximately 500 model houses to about 50 houses by 2010, Asahi-Kasei Homes will reduce their number of model houses by 10% in 2-3 years, and Mitsui Home will reduce their number of model houses by 5% by this autumn. By setting up a model house at a general exhibition area, in general, the maintenance costs such as real estate costs and utility fees are believed to be about 30,000,000 yen per house, and each company is planning to reduce these costs and has decided to put their efforts into exhibition areas that are attracting many attendees. In addition, Misawa Home, a manufacturer of prefabricated wood houses, has frozen the construction of new model houses since last year.

With expectations as a biomass fuel for factory and household use, wood pellets reached a yearly amount of production of 40,000 tons last year becoming 16 times larger than 5 years ago. Along with this increase, the number of factories also increased by 5-fold to 51 factories according to a recent survey by the Japan Wood Pellet Association. Demand for wood pellets for both boiler use and stove/heater use can be seen rising steadily due to an industrial structure of local production-local consumption and as an alternative to fossil fuels. Based on sales of wood pellets, stove/heater use accounted for 5,800 tons, and boiler use accounted for 32,900 tons (including expected amounts for 2008) with an overall sales volume of 38,700 tons. Along with factories, wood pellets used for boilers also increased in demand recently at swimming pools and indoor garden facilities and has doubled in amount since the 16,872 tons of 2006. In addition, demand for use for stoves/heaters has also nearly doubled since 2007.

Ministry of Land, Infrastructure, Transport, and Tourism has recently announced official land prices as of January 1, 2009. The national average land price declined 3.5% from January 1, 2008 in all purposes. Prices for both residential land and commercial land decreased for the first time in three years, with reduction rates of 3.2% and 4.7% respectively. In every prefecture, the prices decreased; and 45 prefectures except for Yamanashi and Kagawa saw larger falls than the previous term. Especially large urban areas saw drastic drops. By area, the average land price of residential areas in three big urban areas fell after an interval of three years with a reduction rate of 3.5%, and that of commercial areas decreased after an interval of four years by 5.4%. Also in local areas, the reduction rates have grown. The reduction in urban areas is remarkable and worse than that in local areas (minus 2.8% in residential area and minus 4.2% in commercial area). It is generally understood that this is because the bubble in the urban areas has been adjusted.

The functions of grading and certifying lumber and lumber factories based on the JAS laws, which were until recently conducted by the Inspection Division of Japan Federation of Wood Industry Associations (JFWIA), were completely transferred to the Japan Lumber Inspection and Research Association (JLIRA), a limited liability intermediate corporation and an organization for registration and certification for the wood industry. As a new registered certifying organization for lumber, JLIRA has continued to inspect factories that have applied for JAS certification, and on February 27, 359 factories (A-type: 35 factories and B-type: 324 factories) were certified for conforming to "the technical standards for certification of manufacturers concerning lumber," which was decided upon by a notification from the Ministry of Agriculture, Forestry and Fisheries. After the certification, the A-type factories will conduct self-inspection and grading, and B-type factories will entrust a third party for inspection and conduct self-grading based on the results of the inspection.

Juken New Zealand Co., Ltd (JNL), a corporate subsidiary of WOOD ONE CO., LTD. (Hatsukaichi City, Hiroshima Prefecture) in New Zealand, obtained the Forest Stewardship Council’s Forest Management certification for all the forests that the company manages. At the same time, JNL also obtained the Chain of Custody certification for all its factories (4 factories). Beginning in 1990, JNL is currently managing 68,000 hectares of “WOOD ONE Forests” in New Zealand. A cyclical system is used to regenerate forests by planting trees, raising the trees, felling the trees, and replanting, and forests resources are used efficiently for products without waste by felling the timber within the growth period. By obtaining these certifications, all the lumber supplied from New Zealand, which accounts for over 70% o f the lumber consumed by WOOD ONE, will be certified lumber.

Japan Acoustic Floor Manufacturer’s Association has released its shipment statistics of acoustic floor materials in 2008. Total shipment of the year was 8,037,000 square meters, which marked as a big drop as 19.8% from the previous year when it went more than the 10,000,000 square meter mark. The result of 2008 is the lowest figure in the last 10 years, and it went lower than the 9,000,000 square meter mark for the first time in six years since 2002 (8,902,000 square meters). By product, shipment of light floor materials with floor impact sound level of LL45, which hold 81.9% of all, decreased 18.1% from the previous year to 6,586,000 square meters. And that of LL40 products, the highest rank, was 300,000 square meters (down 29.3%), that of LL50 products was 354,000 square meters (down 22.7%), and that of LL60 products was 798,000 square meters (down 27.0%). It is said that there is a time-lag from six months to one year between housing starts and floor furnishing. This reduction of the shipment seems to be a direct reflection of housing starts of condominiums, which had sharply dropped since the latter half of 2007 affected by the enforcement of revised Building Standards Law.

The education ministry has newly earmarked a budget of \4 billion for public schools for the coming fiscal year, because ‘Budo’ (martial arts) is going to be made a compulsory subject from fiscal 2012 and it will start building gymnasiums (‘Budojo’) exclusively used for martial arts in junior high schools. It will start construction of those gymnasiums at a fast pace. The span of the project is five years and the number of schools will amount to about 2,300 including both private and public ones. According to the nature of those buildings, a lot of demand for lumber is expected to be created, and the lumber industry will contribute to the project by making active use of local timber. As of May 1, 2007, 4,769 public schools (out of 10,150) and 181 private ones (out of 729) have martial art gymnasiums. By the five-year project, it is planning to make the rate of ‘Budojo’-equipped public schools from 47% to 70%. In 2009, its target is about 180 schools. As this project is to be implemented by the local governments, 15% of the costs will be born by allocation tax. Practically, 65% of the cost will be paid by the national government. The cost for acquiring instructors and purchasing equipment is budgeted in other categories.

Sekisui House Ltd. (Osaka City), known as Japan’s leading housing maker, has released its financial settlement of accounts for the period from February 1, 2008 to January 31, 2009. According to the consolidated financial statement, its sales were ¥1,514,172 million (down 5.2% from the same period in a year earlier), business profits were ¥73,960 million (down 32.6%), current profits were ¥77,072 million (down 32.4%), and net income was ¥11,516 million (down 80.9%). Influenced by sluggish sales caused by the economic recession, its sales made a term-to-term reduction for the first time in six years. Its net income dropped as sharply as 80% from the previous term. By department, sales of construction of industrialized houses were ¥682,862 million (down 3.1%), those of real estate were ¥317,278 million (down 21.3%), those of real-estate rental were ¥357,075 million (up 6.7%), and those of others were ¥156,955 million (up 0.8%). In the section of industrialized houses, sales of wooden single family houses named “Shawood” increased 6.3%; however, overall sales did not grow affected by the worsening market situation. In the real-estate sales department, sales of both single family houses and condominiums were sluggish.

For wooden homes with its strict regulations concerning fire prevention, the possible uses of wood are on an expanding trend with the recent developments in fireproof and semi-fireproof methods and with methods of applying wood material to exterior walls having been determined. Recently, the Ministry of Land, Infrastructure, Transport and Tourism carried out a revision notification of the Building Standards Law in order to take measures to ease the restriction on the use of semi-non-combustible materials for interior use. Limited to housing, the main point is the use of lumber is recognized in rooms that have the use of fire in accordance with the distance of the source of fire. Concerning the four cases of a floor embedded hearth, fireplace, heater, and portable cooking stove, a wood finish is possible if for example more than 80 cm distance is kept from a heater or if a 1 meter radius is kept from a portable cooking stove and ceiling directly above it. Until now, all the walls and ceiling of a room that has the use of fire had to use non-combustible materials, but in contrast, for kitchens, only a part of the ceiling that is near a flame has to be processed with non-combustible materials, so freedom in design is increased. The notification that expands the possible use of lumber in rooms will go into effect from April 1.

The Japan Federation of Housing Organizations recently announced the results of the Housing Business Condition Survey for the 4th Quarter 2008. Compared to the previous quarter from July to September, the results of the orders for single family detached homes from October to December decreased 44 points in the total number of units ordered continuing a decrease from the 3rd quarter. The total value of the orders also decreased 14 points shifting from the 4 point increase in the previous quarter to a minus. Based on region, the total number of units ordered dropped sharply by two digits in all regions with a 70 point decrease in Hokkaido and a 69 point decrease in Chugoku. The results reflected the rapid deterioration of the market. Compared to the results for October to December, the forecast for January to March 2009 calls for a 16 point increase in the total number of units ordered and a 12 point decrease in the total value of the orders (a 7 point decrease in both the total number of units ordered and the total value of the orders in the previous forecast). A large recovery is foreseen as a reaction to the large drop found in the current survey. However, the value is expected to fall into the minus due to the falling trend in the unit price of orders. The percentage of reconstructed homes within the total number of units ordered for October to December slightly increased nationwide to 21% (20% in the previous quarter) for "over 50%". "Under 40%" also slightly increased to 60% (57%), so it was shown that within the falling rate of orders for homes, orders for home reconstruction are putting up a good fight. The forecast for January to March 2009 calls for a 3 point drop in the total number of units ordered and a 10 point drop in value (a 6 point drop in the total number of units ordered and a 3 point drop in value in the previous quarter).

According to Tokyo Rengo Chosa’s investigation, the total number of bankruptcies in companies related to lumber, building materials, furniture and carpentry was 400 (up 24% from the previous year) in 2008, which increased for the second straight year along with the total debts of ¥201,933,920,000 (up 16%). Compared with the increase rate of total debts, the rate of total number is bigger, reflecting that many small and middle scale companies were reorganized or went out of business. Rengo says that about 70% of those total bankruptcies is caused by the economic downturn mainly owing to sluggish sales, unfavorable order reception and piled deficits, and it predicts this trend will continue. By section, the number of bankrupt companies in the lumber industry was 85 (up 9%), that in the building material section was 229 (up 40%), and that in the furniture and carpentry section was 86 (up 8%). The number of the furniture and carpentry section increased for the third consecutive years and that of the lumber and building material section increased for the second straight month. Among them, the increase in the building material related section was overwhelmingly high. The sums of debts were ¥34,711,360,000 (up 9%) in the lumber section, ¥130,955,040,000 (up 14%) in the building material section, and ¥63,686,310,000 (up 132%) in the furniture and carpentry section. The growth in the section of furniture and carpentry was outstanding with an increased number of bankruptcies with debts of over one billion.

Gypsum Board Association of Japan has announced output and shipment of gypsum boards in 2008. According to the report, the production volume decreased 8.6% from the previous year to 520,118,000 square meters, and shipment of them decreased 8.4% to 517,618,000 square meters. According to the production ratios by item, the growing trend in reinforced boards remained unchanged with a growth rate of 6.9%, which is higher than the previous year by 0.5 points. A thickening trend of products is also continuing, and the percentage of products with over 12.5mm thick increased 2.5 points from the previous year to 63.5% of all. Chairman Sudo (President of Yoshino Gypsum Co., Ltd.) said, “I presume this year’s housing starts will be around 1,000,000 units (with a margin of plus or minus 50,000 units). As the shipment volume of gypsum boards is influenced by the fluctuation of housing starts, this year’s amount will be lower than last year (by about 5%).”

Fuji House Co., Ltd. (Hamamatsu City, Shizuoka Prefecture), a builder and seller of wooden custom built home, and its affiliate companies Nikkyo Co., Ltd. and Sunny Co., Ltd. committed an act of bankruptcy to the Tokyo District Court on January 29, and got the decision to start the procedure on the same day. Total debts of those three companies are about ¥63,800 million. Fuji House was established in 1971. Starting from Shizuoka Prefecture, it has expanded its business area of general houses to the Kanto area and the Osaka metropolitan district with 78 branch offices and 44 show house spaces all over Japan. Last fiscal year, it completed 1,610 units of frameworks. In the fiscal year ending in March 2001 as its peak, it recorded annual sales of ¥47,380 million. However, due to environmental adversity, its business went slump with sales of ¥41,800 million in the same period of 2008. Furthermore, business investment of Nikkyo, which had been processing and purchasing construction materials, put a burden to its finance. In November 2008, Fuji House was difficult to collect funds as it became obvious that its business situation was worsening when it asked several business partners for help.

Sekisui House, Ltd. (headquartered in Osaka City) has revised downward its earnings forecast announced in September 2008. Revised figures are ¥1,515 billion (down 4.1% from the prior estimate) as the estimate for consolidated sales for the full year ending in January 2009 (from February 1, 2008 to January 31, 2009), ¥75 billion (down 16.7%) as ordinary profit, and ¥10 billion (down 79.2%) as net income. Compared with the result in the previous term, sales decreased 5.2%, ordinary profit did 34.3%, and current net earnings did 83.4%. A cancellation of a contract related to Daiba Garden City as a city redevelopment project and the slump in the real estate industry centering condominiums had hit the company. Sekisui House will post about ¥35 billion as the difference between the current price and the book value, because the land price of part of the company owned real estate sharply dropped. It also will post ¥9.299 billion as a loss from revaluation of securities. A total extraordinary loss of ¥44.3 billion will be capitalized.

In collaboration with Tokyo University of Agriculture and Technology and Nagaoka University of Technology, Forestry and Forest Products Research Institute, an incorporated administrative agency, has succeeded in manufacturing a high performance adhesive. Lignin, which is derived from wood, is used as a raw material for the useful compound of 2-pyrone-4, 6-dicarboxylic acid (PDC), and after the PDC undergoes polycondensation, an adhesive is formulated that has the adhesive properties (three times the strength of epoxy resin) of bonding together metals. With the results of this research, the use of this highly value-added material made from lignin will be further developed so that an effective method is expected of using not only the approximately 8.6 million m³ of wood waste from forest land each year but also a variety of biomass such as used tea leaves from tea manufacturing factories. In order to make this technology fit for practical use, the collaborative system between the universities, government, and businesses will be further strengthened at the research facility. With plans to bring costs down, work will be conducted on creating price competitiveness with the already existing adhesives.

After examining the restructuring of their management plan from the next fiscal period (January 2010), Sekisui House Ltd. (head office: Osaka) announced on January 16 the integration of the manufacturing department and the reorganization of the head office due to the deteriorating economic trends and future trends in housing construction. For the manufacturing division, the manufacturing system for the five main factories will be re-examined, and manufacturing operations at the Shiga factory will be suspended until the end of March. At the head office, over 300 employees will be reassigned in February in order to plan for the downsizing of the organization and personnel. The Shiga factory began operating in June 1961, a year after the establishment of the company and is the factory with the longest history with the company. The factory covers an area of 174,779 square meters and produces steel-frame structures, wood-frame structures, and exterior wall materials. Production Capacity is 7,600 units per year. As of January 1, 2009, the number of employees was 442. The employees of the Shiga factory are scheduled to be re-assigned to other companies in the Sekisui House group including other factories. In addition, materials and components that were manufactured at the Shiga factory will be conducted at the Shizuoka factory and Yamaguchi factory.

Compiled by Teikoku Databank Ltd., the number of company bankruptcies in 2008 totaled 12,681, a 15.7% increase compared to the previous year, and liabilities totaled 11.911302 trillion yen, a 116.9% increase from the previous year. The amount of total liabilities was the seventh highest level in the post World War II period. With the sudden downturn in the economy, a characteristic of last year's bankruptcies was the increase in the number of recession-induced bankruptcies. Large-scale bankruptcies, unparalleled in history, such as Lehman Brothers Japan Inc. with liabilities of 3.4314 trillion yen and Yamato Life Insurance Co. continued one after the other. In addition, with sluggishness in condominium sales due to the deterioration of the real estate market and with the deepening severity of the financial crisis, large-scale bankruptcies of real estate developers and major construction companies also continued, and bankruptcies in the construction industry increased 17.3%. Looking at bankruptcy trends, 53 cases of bankruptcy occurred among companies in the condominium industry. In particular, these bankruptcies suddenly increased from June due to the influence of the severe financial crisis. In addition, 207 bankruptcies related to the revision in the Building Standards Law also occurred.

Japan Federation of Housing Organizations has held a press conference on January 26 and amended its estimate for housing starts of fiscal 2008 downward from the former estimate of 1,053,000 units, based on the results of a business survey into housing companies. It has also predicted those in 2009 as 1,019,000 units. Mr. Wada, head of the federation, said, “Ministry of Land, Infrastructure, Transport and Tourism announced that the ministry estimates the tax reduction on housing-related expenses including home improvement works will generate 117,000 units of houses, ¥5.5 trillion of money, and 288,000 people of employment. In this way, the housing industry has wide skirts and has a major impact on other industries. Housing sector has huge potential elements. I am sure that it is the key of domestic consumption, which supports sustainable growth of economy, to stimulate family finance to invest to houses, not only in big cities but also in rural areas.”

On January 20, Itou Mokuzai Co., Ltd. (Toyama City, Toyama Prefecture) announced the closing of their lumber factory that specializes in larch wood. With a rise in customs duty for Russian logs moving ahead, problems such as difficulties in dealing with larch logs stably have arisen in the background. The company was established in 1953. In 1972, the company moved to Toyama Port Lumber Industrial Area and began operating a lumber factory specializing in larch wood from Listvennitsa, Russia. As the number of lumber companies in the same area decreased, the productivity of the Itou factory increased, and with the sale of high quality products, the company secured a part of the market, but responding to the problem of the increase in customs duty this time has been difficult, so the company decided to close the curtains on the factory's 55 year history.

On January 9, Toshin Jyuken Co., Ltd. (Inazawa City, Aichi Prefecture), the largest company in developing single family homes with lots in the Tokai region, announced that they filed for Civil Rehabilitation Law procedures for bankruptcy protection with the Nagoya District Court. Debt amounted to 49,179 million yen. According to the company, loans increased, but because new loans could no longer made from financial institutions, the company decided to undergo reorganization after filing for bankruptcy protection. The number of employees at the end of last year was 498. Consolidated earnings reached a peak in the June 2007 period with sales of 104.467 billion yen and ordinary income of 954.0 million yen, but with the decline in the housing market coming after a revision in the Building Standards Law and with the current financial crisis, sales fell into a slump, and business results rapidly deteriorated. Last year for the June period, sales totaled 98.213 billion yen, and ordinary income totaled 448.0 million yen, but in a short period of half a year from summer to the end of the year, prices suddenly changed to drastic fall. The main areas of business for the company are Tokyo, Machida, Hamamatsu, and Okazaki.

Western Forest Products Inc., the biggest forestry company in the coastal district in British Columbia, Canada, has decided to continue to halt operation of its three factories in the Nanaimo area. As the market remains stagnant, the stoppage is anticipated to be long. The company has been suspending operation of almost all its factories since before the Christmas holidays in 2008. It is planning to resume operation of other factories in the near future; however, the number of shifts is to be reduced compared with that before the suspension. With this decision, about 320 employees in Nanaimo Sawmill, Duke Point Sawmill, and Mid Island Remanufacturing Factory will be laid off. In harvesting department, it will stop operation of factories in the Port Alberni district and Queen Charlotte Island, due to the sluggishness of the western red cedar market, although it had been relatively favorable. In total, about 720 employees will be furloughed in the tree felling and log hauling department and the processing department. BC coastal labor union ILWA and the management side are now talking about working conditions with mediators of the federal government, but yet to reach an agreement. In the area, people feel apprehensive about possible strikes and are worrying about the situation that loading and unloading operation of goods except grain will be interrupted.

Japan Wood Preservers Industry Association has announced its member factories’ output in the third quarter (July-September) of 2008. According to the report, total output of preserved lumber decreased 5% from the same term in the previous year to 51,055 cubic meters. The reduction has shrunken compared with that in January-June 2008 when the output was 100,117 cubic meters (down 15.1%). Among building materials, sills for construction decreased to 28,574 cubic meters (down 2.9%) and other building materials also decreased to 13,898 cubic meters (down 6.1%). In addition, the volume of exterior materials including decks and play equipment decreased with 4,641 cubic meters (down 8.7%). On the other hand, railroad ties increased 4.4% to 2,642 cubic meters. Utility poles took an upward turn with 138 cubic meters (up 11.3%), though the growth is slim. “Other items” such as timber for civil engineering works and gardening materials have drastically dropped in the wake of the previous quarter to 1,162 cubic meters (down 35.3%). About the production by chemical, the share of chemicals including copper is 52.5% and that of chemicals not including copper is 34.3%. By item, the shares are 50.8% and 44.8% in “sills”, 58.3% and 28.8% in “other construction materials”, and 67.0% and 14.8% in “exterior materials” respectively. Chemicals including copper are the mainstream holding the majority in every item.

Japan North American Lumber Conference has held its administrative board meeting on December 17 and announced that expected demand for North American logs is 2,717,000 cubic meters and that for lumber is 2,797,000 cubic meters for January-December in 2009. Expected demand for the logs is 1.7% more than the expected shipment in 2008 which was announced to be 2,671,000 cubic meters on the same day. And that for lumber is 1.6% less than the expected shipment which was announced to be 2,931,000 cubic meters. By area, demand for logs in the Keihin area which involves Kashima Port is expected to increase by about 100,000 cubic meters from the previous year due to the full-scale operation of Kashima factory of Chugoku Mokuzai. The top consumer of logs is the Chugoku area with 1,500,000 cubic meters, and that of lumber is the Keihin area with 1,286,000 cubic meters.

Since December, Seihoku Corporation and Seihoku Plywood Corporation, the largest manufacturer of plywood, have implemented a system to cut production by 50% mainly for softwood, structural plywood, their main product. In January 2009, the company also suspended operations at all its factories for a limited time until the 12th in order to achieve a 50% cut in production. Because market conditions have deteriorated more than imagined, a policy to continue the 50% cut in production into February was decided. In recent years, because of a decline in actual demand and the rise in costs such as logs used for plywood, adhesives, and freight and also because of the increase in imported products due to the rise in the yen exchange rate, domestic plywood manufacturers are cutting production for the long term. However, since last autumn, a large drop in price, the likes of which have not been seen in recent years, has occurred, and Seihoku Corporation and Seihoku Plywood Corporation decided to take the lead in planning for stabilization of the market and have carried out a 50% cut in production as an emergency measure since last December. An immediate effect is expected, but both companies are utilizing a subsidy system while moving ahead with reduction in production, and they are working hard on stabilizing the market for the short term.

The Tokyo metropolitan government and Toshiba Corporation (headquartered in Minato-ku, Tokyo) have concluded a comprehensive accord to promote forest maintenance in the Tama area in Tokyo. As a part of CSR to curb global warming and keep biodiversity, Toshiba had offered cooperation to Tokyo. They spent one and a half years to make the concept of this project. Under this accord, Toshiba will plant trees and maintain forest roads in the area, and it will encourage an active use of Tama lumber when its employees construct their private houses. During ten years of validity of the contract, employees of Toshiba and its group companies will extensively do forestation, weeding and thinning operation, in addition to holding events to encourage the use of Tama lumber. Among 4,000-6,000 employees of the group companies in three offices located in Fuchu and etc., first-time buyers of houses in their thirties and forties (20-30% of all) will be the core members who actively use Tama lumber for their private houses. It is the first case in Japan that a prefectural government and a private company conclude comprehensive accord in the field of forest maintenance. At the signing ceremony, Mr. Nishida, president of Toshiba, said, “We will inherit bountiful Tama forests to our Children.” And Mr. Ishihara, the governor of Tokyo, said, “In Japan, Tokyo has the largest number of big trees with circumference of more than two meters. As bountiful forests are important for us to be activated, it is nice to obtain Toshiba’s cooperation.”

Sumitomo Forestry Co., Ltd. will implement a reforestation project in 1,000ha denuded land in the Bromo Tengger Semeru National Park in East Java in Indonesia jointly with forest ministry of the country. This project is a part of CSR activities and will span up to 20 years starting from November 2008. This national park, operated under jurisdiction of the Directorate General of Forest Protection and Nature Conservation of Indonesia’s Ministry of Forestry, is a famous sightseeing area lying at a highland area at heights of 1,700-2,500 meters surrounding Mount Bromo, which is Hindu holy place for the local Tenggerese. At present, most of the area has become grassland after denuded by repeated fire. Though it had been reforested several times, it was hard to improve the situation due to the volcano-emitted gas and recurrence of fire. The company performed “Tropical Forest Regeneration Project” in Sebulu, East Kalimantan, Indonesia. The project which spanned 13 years restored logged areas and land cleared by the slash-and-burn method to a state close to that of their original ecosystem. At the completion of the project, trees were planted in 503 hectares of area. Sumitomo Forestry plans to apply its past record and its various technologies to reforest this area which presents the harsh conditions of an active volcano belt.

The Ministry of Land, Infrastructure, Transport and Tourism announced the forecast of main construction material demand for January 2009. From the report, the amount of demand for lumber products is forecasted to be 1.0 million m³, a 14.4% increase compared to the same month last year and the first shift to an increase in 22 months since April of 2007. For the past 10 years, the amount of lumber product shipments has fallen below the results of the previous year, and the monthly average in 2007 was 993,000 m³ decreasing 44% compared to the amount of 1,759,000 m³ in 1997. This time, the amount forecasted for the January 2009 term is seen as increasing due to a reaction to the steep drop in housing construction in the previous year. The figures targeted the amount of lumber product shipments by domestic manufacturers and included foreign lumber that is to be used as material for lumber products and the amount of demand that is not intended for construction use. The amount of demand for construction material other than lumber for January 2009 was 4.1 million tons (6.1% increase) for cement and 8.5 million m³ (12.6% increase) for ready mixed concrete. The amount was 2.25 million tons (18.7% increase) for regular steel and 530,000 tons (23.8% increase) for section steel shifting to an increase for all four.

Sumitomo Joint Electric Power Co., Ltd., Sumitomo Forestry Co., Ltd. and Fuluhashi EPO Corporation will set up three joint ventures In order to enter the business of biomass power generation, Sumitomo Joint Electric Power Co., Ltd. (headquartered in Niihama City in Ehime Prefecture), Sumitomo Forestry Co., Ltd. (headquartered in Chiyoda-ku in Tokyo), and Fuluhashi EPO Corporation (headquartered in Naka-ku, Nagoya City in Aichi Prefecture) have decided to set up three joint ventures. They are a biomass power generation company that uses fuel wood chips, a chip supplying company which locates adjacent to the above-mentioned biomass power generation company and supplies wood chips made from construction debris and etc., and a holding company of the chip supplying company. The biomass power generation business will be built at a leased idle land in Ogimachi, Kawasaki-ku in Kawasaki City and stably provide electric corporations of specific scales with electricity for long term. The completion of the power plant is scheduled in the latter half of 2010. After making test drives, they are planning to start operation after February 2011.

Nice Holdings, Inc. (headquartered in Yokohama City) has announced its consolidated result for the second quarter of fiscal 2009 ending in March 2009 (from April 1st to September 30th in 2008). According to it, the company’s sales were ¥123,277 million (down 2.6% from the same term in the previous year), current loss was ¥705 million (a surplus of ¥713 million), and net deficit for the period was ¥1,247 million (a surplus of ¥220 million). By section, sales of housing materials were ¥92,069 million (down 6.8%), those of real estate department were ¥26,484 million (up 9.9%), those of construction work department were ¥1,924 million (down 18.9%), and those of other departments were ¥2,799 million (up 110.4%). In business of housing materials, as the main force, a general exhibition of housing materials named “Quake-Resistant for Housing Expo” attracted more than 70,000 goers in Tokyo, Nagoya Sendai and Niigata. By setting exhibition booths for building offices in addition to manufacturers of housing materials, it made an effort to cultivate new demand for houses. To reinforce its distribution basis and business of building frames, it has obtained lands to build distribution centers in the Tohoku and the Kinki areas. By sections, sales of housing materials were ¥81,170 million and those of the lumber market were ¥10,898 million.

Aiming to lengthen the lifespan of houses and to smoothen its stock distribution, the "law concerning the promotion of the spread of long-lasting and excellent housing" also known as "200 Year Housing" was partially revised, and it was unanimously approved at the House of Representatives on November 21 and at the House of Councilors on November 28. As a law under the Ministry of Land, Infrastructure, Transport and Tourism, the revised plan is the first time that "consideration is being made to ensure the proper use of 'domestic material'" and is the first time that the term 'domestic material' is clearly being adopted." By ensuring the appropriate use of domestic material (lumber that is produced within the country) when determining basic policies, "the minister of the Ministry of Land, Infrastructure, Transport and Tourism will plan for the conservation and proper management of our country's forests and take into consideration the contribution to the formation of a recycling society and to the prevention of global warming and will also consider planning the spread of long-lasting and excellent housing that uses domestic material and other lumber." The contents, which were not originally in the government's plan, were decided upon and clearly showed that the road to promoting the use of domestic material was chosen.

Daiken Corporation will switch almost all its high-functional floor materials to ecologically friendly base materials Daiken Corporation (Osaka) is going to switch almost all its high-functional floor materials (70-75% of woody flooring) to ecologically friendly base materials by the year 2011. As Southsea lumber plywood, which has been the main base material for the company’s flooring, has become scarce, it is the most important problem for it or the leader of environmental cycling companies to change its base material. In the future, Daiken will gradually expand its line up of ecologically friendly materials by releasing “new eco-floor” which is made of the combination of environmental cycling type of planted trees and domestic timber, as well as “special MDF” which is MDF having upgraded dimensional stability and water resistance using mill ends of lumber and plywood. According to its plan, Daiken will develop new ecologically friendly base materials with the following techniques: (1) planted trees or plywood made from domestic timber + special MDF (E hard base) (2) special MDF.

Tokyo Plywood Manufacturers Association and Tohoku Plywood Manufacturers Association exhibited domestic timber plywood at “Japan Home + Building Show 2008” Tokyo Plywood Manufacturers Association and Tohoku Plywood Manufacturers Association exhibited their plywood products made of domestic timber and advertised them for demand expansion at “Japan Home + Building Show 2008” which was held at Tokyo Big Sight from November 12 to 14. At the press conference held on the first day of the show, Mr. Seiichi Oikawa, a director of Tokyo Plywood Manufacturers Association, said, “The proportion of domestic timber is rising in plywood. The ratio has exceeded 70% in Seihoku Group. As the consumption of domestic timber is expected to be more than 2,000,000 cubic meters in 2008, it might be possible in two or three years to achieve our goal of 3,000,000 cubic meters.” He also said, “It is the challenge for the future to develop demands for domestic timber plywood” and said that they would conduct study sessions in collaboration with distributors on the usage of that product on a nationwide scale.

Representatives from the Delegation of the European Commission to Japan held a press conference on November 11 and announced the start of a new promotional campaign for trade between Japan and the European Union called "EU Gateway Programme" as part of a government policy to promote EU trade and investment in Japan. With the implementation of the "EU Gateway to Japan" campaign for the past 14 years, the Delegation of the European Commission to Japan has up to now introduced approximately 2,500 companies from the EU to every Japanese industry. With the newly started promotional campaign, "they would like to contribute to further expanding trade relations between Japan and the EU while making use of the results that have been obtained up to now." The new program will continue for five years from 2009 to 2013; during which time, over 1000 companies from the EU will visit Japan. An exhibition with an opportunity for business talks in the field of building materials and construction technology will take place on February 4 and 5, 2009 at the Hilton Hotel in Tokyo.

TOTO, DAIKEN, and YKKAP jointly hold “Remodel Style Fair 2008-2009” until April 29, 2009 at the 7 sites in Japan, starting on 17-18 October in Nagoya. The presidents of these companies attended the opening ceremony at “Port Messe Nagoya,” the event site in Nagoya, which was magnificent. Tadahiro Yoshida, president of YKKAP stated that for the housing, it is emphasized on the aspect of existing houses, in which it is the key how the remodeling is taken in. For this purpose, our three companies collectively suggest new style of living, featuring “green model” as a theme. We are planning to expand it throughout all of Japan, and please come to see it. After Nagoya, “Remodel Style Fair 2008-2009” will be held in Okayama, Kanazawa, Osaka, Fukuoka, Sapporo, and Tokyo whose total visitors are expected to be about 73,000.

The Ministry of Agriculture, Forestry and Fisheries of Japan reported export and import of the agricultural and marine products obtained from Trade Statistics. According to the report, the accumulated exports of Japanese logs from Jan.-Aug. greatly increased to 35,098㎥ (up 36.3% compared to the same period a year earlier). The export amounts are 532.173 million yen (down 17.5%) and the unit-price per cubic meter stood at 19,636 yen. The exports of softwood lumber increased to 24,701㎥ (up 2.1%) and stood at 449.49 million yen (up 99.4%), and the exports of hardwood lumber decreased to 2,672㎥ (down 16.1%) and stood at 490.836 million yen (up 6.3%). Average unit prices of both softwood and hardwood increased.

Ishikari Forest Administration Office of Hokkaido Forest Administration Bureau and Asahi Breweries Ltd. have concluded an agreement on supporting “Nopporo Natural Recreation Villages in ‘Showa-no-Mori’ (1,560ha in Ebetsu City and Kita-Hiroshima City).” They signed the agreement at the conclusion ceremony held at Hokkaido Controlling Office of Asahi Breweries Ltd. Forest Agency has established 100 “Recreational Forests” all over Japan and offers them to enterprises as the places where they make social contributions. And Nopporo Natural Recreational Forest is one of them. For five years from now, Asahi is going to offer backup activities such as financial assistance, forest government activities by its staff, and creation of pamphlets etc.

Talks of Japan-Vietnam EPA reached a broad agreement Talks of Japan-Vietnam Economic Partnership Agreement which have been continuing since January 2007, have reached a broad agreement in primal fields including the accession to markets of the agricultural and marine products after the meetings on September 17-19 in Hanoi in Vietnam. Under the agreement, Japanese sensitive items are excluded from the pact and need fresh discussions. The agreement includes collaboration for a better accession to the market and Vietnam’s additional abolition of tariffs in items it desires to export. Concerning forestry products, (1) tariffs on logs and lumber are immediately abolished (2) those on particle boards (PB) and fiberboards are to phase out in seven years (3) current tariff rates on plywood and laminated lumber are maintained. The two countries will discuss the draft and aim to sign as soon as possible.

Kohoku Veneer Co., Ltd. and Nissin Co., Ltd start a subsidy system within this year Kohoku Veneer Co., Ltd. (headquartered in Matsue City) and Nissin Co., Ltd. (headquartered in Sakaiminato City) is going to start a subsidy system within this year. By establishing the system, the companies are planning to support “Association of Forest Cooperatives on the Iikawa Basin” in reafforestation after logging, which is consists of forestry cooperatives on the Iikawa basin including Nita Gun, the eastern part of Shimane, Matsue-Yatsuka, Ohara, Iishi, Izumo areas. On October 9, the association and the companies have reached an agreement on establishing this system when they concluded a log trade deal agreement. In Shimane prefecture, cedar and cypress trees planted during 1955-1974 have grown old enough to cut. However, as it costs time and money, reafforestation is delayed. As a result, mountains are losing its water-retaining capacity and the soil runoff may cause mountain disaster. To subsidize those land-owners who purchase seedlings for reafforestation, the six forestry cooperatives and the two plywood companies have decided to establish a fund by clubbing ¥100 per-cubic-meter of their each transaction of lumber. They are planning to save about ¥4,000,000 in a year.

Tokyo Board Industries Co., Ltd. purchased all stocks of Maruhi Plywood Co., Ltd. Tokyo Board Industries Co., Ltd. (headquartered in Shin-Kiba, Koto-ku, in Tokyo) purchased all stocks of Maruhi Plywood Co., Ltd. and made it 100% owned subsidiary company. Maruhi, having been manufacturing thin and mid-thick plywood from Southsea logs, stopped production in mid-August owing to the depletion of Southsea logs and the soared market prices of the resource. Tokyo Board and the factory of Maruhi, located next to each other in Shin-Kiba, are both members of Seihoku Group and producing primarily particle boards. By making Maruhi its subsidiary, Tokyo Board would like to manufacture plywood backers (5.5-9mm), as the material for ‘okidoko’, using the production equipment of Maruhi. The production is scheduled to start within this year. Mr. Kichisuke Suzuki, the chairman of Tokyo Board Industries, has become the new president, and Mr. Hiroyuki Inoue, an executive director of Maruhi respectively.

Dainihon Wood-Preservation Co., Ltd. held “Super Sale 2008” Dainihon Wood-Preservation Co., Ltd. (headquartered in Nagoya City, Aichi Prefecture) held “Super Sale 2008” for one month until September 30. The company, one of the largest wholesalers of wood products of Nordic countries and North America, exhibited and sold domestic lumber which is in rivalry with imported ones for the first time, because of the increased costs for imported items and the difficulty in supplying them. The company was provided cedar KD studs, as the main force, by “the Cooperative Kumamoto Lumber (representative director Mr. Koichiro Nakashima)” by the trailer. Cedar KD posts were provided by a major factory in Miyazaki Prefecture which is specialized in cedar. And it offered ‘hinoki’ (Japanese cypress) products with the collaboration of the market sales department of its group company Zaiso Timber Co., Ltd. Dainihon has been dealing mainly in 5-ply studs made from whitewood and redwood grown in Nordic countries and Russia. Its transaction volume of those products was No. 1 in the Chukyo area. Though it is the specialist of imported lumber, it has started to deal with domestic lumber, because the latter is so attractive. And another reason is that “domestic lumber’s price competitiveness has become more advantageous than imported lumber’s”. It modestly suggests “please purchase those products mixed with imported lumber products” to its clients at the present stage. But tags of “Sold” were attached to quite a lot of the lumber items at the sale.

Katsuno Wood Co., Ltd. (Nagiso Town, Nagano prefecture), a major manufacturer of squared posts made with "Kiso cypress", is manufacturing squared posts, which display Young’s Modulus and percentage of water content, at a rate of 1000 per day on two lines using "Kiso cypress" that was planted in 1990 in man-made forests. In addition, as a task for this year, preparations to acquire the new JAS are moving ahead. The company is also looking into manufacturing KD squares and flooring material using larch that was planted in 1980 in Kiso. The Young’s Modulus of the larch square is E130-140 and is strong, and from the price standpoint, it can vie with imported lumber, but with difficulty in drying, production has been delayed. The company has been working on technology to dry larch squares to a water content percentage of about 10%, and has achieved good results. With the promotion of forest thinning by the Chubu Regional Forest Office, the amount to be felled of larch that was planted in 1980 in Kiso is expected to increase and its use for squares and flooring material is expected.

On October 21, Foreign Minister Hirofumi Nakasone held talks with Viktor Khristenko, the Russian minister of industry and trade, in Tokyo and strongly requested reconsideration of measures to raise the export tax of logs that is scheduled to be implemented in January of next year. The Russian minister of industry and trade said, "In order to develop the domestic lumber processing industry in Russia, the measures are necessary," and heading for the implementation in January, there was no change in the government's view, and compromises from both countries were not seen. At the 8th Meeting of the Japan-Russian Government Committee concerning Trade Economics, Foreign Minister Nakasone made the request during discussions concerning improvement of the trade investment environment. This meeting was the second ministry level meeting since talks between Seiichi Ota, the former agricultural minister, and Aleksei Gordeev, the Russian agricultural minister, in August, and expectations of the concerned parties were thought to be high. At the talks, the Russian minister of industry and trade did not drop his firm stance and said, "It is like exporting oil and then buying gasoline; exporting logs and then buying furniture. Development of domestic industry is an urgent matter." In response to this, the Japanese government indicated, "Serious effects will be brought about by the introduction of these actual measures," and strongly appealed for a reconsideration of the measures.

The Tounou Hinoki Product Circulation Cooperative is moving ahead with preparations to be able to obtain the "JAS (Japan Agricultural Standards) Machinery Grade Classification for Structural Use" next February In order to prepare a supply system of lumber products that follows the House Warranty against Defects Implementation Law, which will be implemented in October of next year, the Tounou Hinoki Product Circulation Cooperative (Shirakawa Town, Kamo-gun, Gifu Prefecture) is moving ahead with preparations to be able to obtain the "JAS (Japan Agricultural Standards) Machinery Grade Classification for Structural Use" next February. In addition, progress is also being made in nearly obtaining approval for handling legal lumber. These kinds of preparations are moving ahead because a sign of quality as a JAS product has become extremely important for regional lumber such as Tounou cypress. Recently among consumers, a desire to acquire a home that uses regional lumber is rising in order to stop global warming and environmental problems, and regional builders, who are sensitive to the changes in the awareness of these kinds of consumers, as well as major housing companies such as Sumitomo Forestry are also actively demanding lumber products that can show proof of quality and regional area. In addition, due to the rise in cost of foreign lumber products, the price competitiveness of domestic lumber is achieving a dominance; for example, kiln dried cedar cross beams are relatively cheaper than kiln dried Douglas fir cross beams, and housing manufacturers are keeping an eye on domestic lumber.

The Ministry of Land, Infrastructure, Transport and Tourism is hurrying to prepare "Housing History Information" In order to increase the stock of high quality homes that are excellent and long lasting, the Ministry of Land, Infrastructure, Transport and Tourism, sees the necessity for planned maintenance management and smooth housing distribution, and the ministry is hurrying to prepare "Housing History Information" which will make use of information collected about blueprints and construction work from new home constructions, repairs, and inspections. In 2007, the Housing History Information Preparation and Examination Committee was set up, and the members examined necessary, standard information items for a house's history, common rules, and measures to spread its use. The ministry is moving ahead with its examination and is quickly continuing with its plan to collect housing history information and to prepare the start of providing services. The housing history information will include: 1) performance information, 2) maintenance management information, 3) information concerning land conditions, and 4) information concerning rights.

Wood One Co., Ltd. remodeled its Hiroshima Show Rooms Wood One Co., Ltd. (headquartered in Hatsukaichi City in Hiroshima Prefecture) has remodeled its Hiroshima Show Rooms in the city. By adding newly-released housing equipments such as kitchen units and bathroom vanities in the rooms of interior materials, the place has become a suitable space to suggest total coordination. Exhibited articles are total styling kitchen “Su:iji” NZ class (released in June), which uses New Zealand pine solid lumber grown in the country for the doors, and “Ibuki” series which is made of the same lumber furnished with natural coating materials. There are eight showrooms using those materials. As single items, stair members including railings, fancy flooring veneer wood, solid flooring, and interior doors are displayed. Visitors can touch and feel the quality of most items there. The facility also provides with a business negotiation and planning room. In October, its Shinjuku Showroom is scheduled to restart after renovation.

Compiled by the Forestry Agency, the amount of damage caused by the pine beetles in fiscal 2007 nationwide was 619,000 m³ (3.8% decrease compared to the previous fiscal year) decreasing for the 5th straight month since 2003 with about 800,000 m³. Within this amount, privately owned forests accounted for 579,000 m³, and state owned forests accounted for 39,800 m³. Among the privately owned forests, damage occurred as in the previous fiscal year in 45 prefectures with the exception of Aomori and Hokkaido. The region with the most damage was Nagano with 50,400 m³ followed by Fukushima with 49,500 m³ and Iwate with 38,500 m³. In heavily damaged regions, the damage decreased when compared to the previous fiscal year, but damage increased in Kyushu, Kinki, and the northern part of Chugoku. Damage increases with the high temperature and low rainfall of summer, and new damage is occurring in pine forests where damage did not occur previously such as areas in high elevation. The largest amount of damage caused by the pine beetles was recorded in 1979 with 2,432,000 m³.

Seven Industries Co., Ltd. decided to terminate production of laminated lumber for structural use On August 21 at its board of directors' meeting, Seven Industries Co., Ltd. (headquarters: Minokamo City, Gifu Prefecture) decided to terminate production of laminated lumber for structural use on September 30. The structural lumber department of the company manufactures structural laminated lumber, mainly posts, beams, and ground sills used for housing, but profits have deteriorated due to the effects of the sudden rise in price of resources and the price competition with products from overseas. The department's sales results for the March 2008 term showed an operating loss of 291.0 million yen. After production ends on September 30, the structural lumber department will be ended. The employees of the department will be transferred to other construction material departments. The machinery will be sold, and the building and warehouse will be used as a warehouse for construction material products. Started in 1966 from the Marushichi Shirokawaguchi Sawmill, the company's production of laminated lumber succeeded and was established as Marushichi Juken Industry in 1976 and was listed on the second section of the Tokyo and Nagoya Stock Market.

Tokyo Lumber Retailers' Association reported the Standard Log Price in September. According to the report, the prices of the products were raised from the previous month as follows; 2,000 yen/㎥of green lumber 'hirakaku' of Douglas Fir, 5,000 yen/㎥of KD lumber 'hirakaku' of Douglas Fir, 30yen/each of Russian red pine stiffeners, 20 yen/each of Russian larch rafters and 10 yen/each of the processed furring strips from Russian red pine. The prices of other products such as particle boards, softwood plywood for structural use, concrete form, Lauan plywood for floor foundations and Lauan plywood for structural use are also made markups of 50yen to 100 yen/each. Small local builders which are clients of the Association members have suffered from poor funds due to decreasing inquiries. Also it says there exist many cases where owners misses their payment due date, which some small builders cannot afford to buy materials by cash at home improvement centers have no choice but to purchase the ones on credit from the timber & lumber dealers.

Tokyo Lumber Terminal Co., Ltd. is the base of imported lumber products which are supplied to the Tokyo metropolitan area. In June, the terminal accepted 70,000 cubic meters, shipped 69,000 cubic meters of lumber having 104,000 cubic meters of inventories. In July, it accepted 79,000 cubic meters and shipped 74,000 cubic meters of lumber having 109,000 cubic meters of inventories. The inventories at the end of July break down into 58,000 cubic meters of North American lumber, 11,000 cubic meters of European lumber, 10,000 cubic meters of Russian lumber, 22,000 cubic meters of other lumber products and 8,000 cubic meters of boards. In August, it is expected to accept 61,000 cubic meters and ship 59,000 cubic meters of lumber, and have 111,000 cubic meters of inventories.

In July, the situation of domestic lumber market changed for the better. Prices for Russian red pine studs are expensive because red pine logs are in short and their prices are high. Their product price has increased to the ¥56,000 level per cubic meter. Prices for whitewood studs, which are running short, have also increased to ¥53,000-54,000. In Russian spruce rafter, which is also suffering from shortage of logs and their high prices, prices for KD products are around \64,000 and those of green items are ¥54,000-55,000. A Japanese leading manufacturer’s prices for Douglas fir KD ‘hirakaku’ are ¥55,000-56,000. Manufacturers’ prices for five-ply laminated connective posts have reached the ¥1,900 level. As supply of Russian lumber products decreased, demands for Douglas fir KD rafters, domestic cedar KD studs, domestic cedar KD rafters and etc. are steadily increasing.

As receipt of Russian logs is decreasing in Hokkaido, sawmills there have started using logs of planted trees (spruce and fir) grown in the area as substitutes for Russian ones. Shipment of products toward Honshu (the Mainland of Japan) is active in rafters and etc., but sawmills are suffering from the increased drying cost caused by the skyrocketing oil price. Another big problem for Hokkaido sawmills is that logs of the area are increasingly shipped for plywood manufacturers and sawmills in Honshu. Hokkaido anticipates that sawmills will run short of logs by about 70,000 cubic meters in 2009 when Russian logs don’t arrive as much as now. As shortage of logs is a matter of life or death for the industry, Hokkaido Federation of Lumber Industry Cooperative Associations is planning to request the government and Hokkaido to increase the logging volume of national forests and Hokkaido forests.

Misawa Homes Co., Ltd. started an Internet sales system of houses Misawa Homes Co., Ltd. (headquartered in Tokyo) has started an Internet sales system of houses in the Kanto area named “Misawa Web Direct”. Houses had been sold through show houses and housing magazines traditionally; however, the weight of the Internet has become heavier with the rapid spread of it. The house for sale is a one-storied house “Smart Style A＊Web Direct Model”. Customers can know the house’s estimated prices after changing the room arrangement, choosing exterior, selecting specifications and equipments among the packaged options through the Internet. They can make house planning at their own paces. To cope with inquiries, it has set a web support desk. So customers can consult about their financial plans and commodities without involving sales representatives as they had traditionally done. Sales areas are covered by Misawa Home Tokyo (Tokyo, Kanagawa), Misawa Home Higashi-Kanto (Chiba, Ibaraki) and Misawa Nishi-Kanto (Saitama, Gunma). They will test this system for a limited time from July to December.

Sumitomo Forestry Co., Ltd. has decided to enter into the plywood manufacturing business in China which has become conspicuous as the third largest plywood supplier in the Pacific Rim following Indonesia and Malaysia. After establishing a totally-owned subsidiary company, it will establish a plywood factory in Fuxin City in Liaoning to develop and produce new original products. The company is planning to use planted poplar as the material for the plywood in the factory and manufacture 64,000 cubic meters of plywood and LVL per year. Construction of the new factory will start in September 2008 and the factory will start commercial production in one year. The products’ destinations are Japan and China. In the future, the company would like to develop a tree-planting program in China to supply materials for wood products.

Japan Fiberboard and Particleboard Manufacturers Association has started on August 1 a voluntary indication system of 4VOCs (toluene, xylene, ethyl benzene, and styrene) emitted from fiberboards and particleboards. In Japan, regulations on formaldehyde were enhanced when the revised building standards law was enforced in July 2003. Bodies related to the industry have administered the “voluntary indication system of formaldehyde”. On the other hand, there was a growing demand to control 4VOCs. Japan Testing Center for Construction Materials started “Committee for standardization of emission rate of VOC from building products” and established the standards for VOC emission rate in April 2008. In concert with this, the association participated in “Investigative Commission on Voluntary Indication of VOC Emitted from Construction Products” run by Japan Construction Material and Housing Equipment Industries Federation, and started this indication system.

Japan DIY Industry Association has held a press conference on July 10 about “Japan DIY Homecenter Show 2008” at JA Building in Otemachi in Tokyo. The show is hold for three days from August 28 to 30 in Makuhari Messe in Chiba Prefecture. A lot of media representatives, gathered from related fields, listened to the new outlines of the show as follows: The first and the second days will become trade days in which it will reinforce its function as a trade show. The theme of this year’s show is “DIY, the Power to Reform Our Lives.” The show has received applications for exhibition from 416 companies or 1,019 booths from inside and outside of Japan, and is expecting 100,000 people to visit.

The number of fatal accidents in construction industry has decreased. According to a report of Japan Construction Occupational Safety and Health Association, the number of fatal accidents at construction sites was 200 all over Japan in 2007. In these accidents, 79 lives were lost at building construction sites, 37 at wooden building construction sites, 12 in construction facilities and 72 under other situations. Compared with 2006, the total number has decreased by 25: 12 down at building sites, 11 down at wooden building sites, and 4 down at others (2 up in construction facilities). The reduction can be attributed to the improved rationalization of construction sites and the tightened safety control. In wooden construction sites, it is because of the spread of preceding scaffold procedure and prevalence of precut lumber and panels. However, despite the decrease of fatal accidents, accidents in wooden constructions seem to be increasing. Though some of the groups under National Federation of Construction Workers’ Unions beefed up safety patrols, safety control at some construction sites is poor with increased number of accidents involving young carpenters.

Ministry of Land, Infrastructure, Transport and Tourism has announced its demand forecast for main construction materials for August. Among them, demand for lumber items was estimated to decrease for the 17th consecutive month since April 2007 with a reduction rate of 14.5% from a year earlier to 825,000 cubic meters. These figures are based on domestic manufacturers’ shipment of the products and include the volume of shipment for other purposes than construction and also include imported timber as the material for lumber. In main materials except lumber, demand for cement was estimated 4,300,000 tons (down 0.6%) and that for ready-mixed concrete 8,750,000 cubic meters (down 1.1%). Demand for common steel was estimated to be 2,250,000 tons (up 9.3%) and that for section steel was estimated to be 520,000 tons (up 17.1%). Year-on-year figure of steels has changed its tendency upward.

TAC Hitechwood Group established a particle board factory in Kalimantan Island in Indonesia TAC Hitechwood Group (headquartered in Nagoya City), owning TAC Building Material Co., Ltd. and HitechWood Co., Ltd., etc. has established a particle board factory in Kalimantan Island in Indonesia jointly with a local company by taking over a secondhand factory. TAC has invested a total amount of ¥600 million, and its production volume is planned to be 7,000 cubic meters a month. It is now doing a test operation, and will start commercial-base production in three or four months. They are going to sell their products mainly in Indonesia and are planning to spread the area to Southeast Asian countries. Distribution toward Japan is an item to be studied later. HitechWood, a producer of laminated wood, is now studying if it can use Far East Yezo spruce logs as the substitution for Siberian red pine logs which they are currently using for laminas.

The Japan-China Board of Assistance to Greening Activities held its ninth meeting in Beijing City in China on June 23 with the participation of the committee members from both sides. At the meeting, they discussed about the contents and the evaluation of planting projects conducted in fiscal 2007, and enforcement policies on its subsidiary projects for private bodies in fiscal 2008. In 2007, various bodies including Japanese private groups did afforestation activities in as many as 26 provinces in China. Actual number of performances was 61 covering 42,000 ha of forestation areas. In eight years since the committee started the project, about 305,000 ha have been forested. On subsidized projects in 2008, they discussed (1) Planting trees as dust shields in coastal disaster prevention forests and Northeast desertification areas (2) Continuous implementation of projects such as preservation of natural forests and anti desertification in accordance with Chinese policies on forests and forestry (3) Tree planting on areas damaged by heavy snow and freezing in the Southern part of China and the earthquake struck areas in Sichuan Province (4) Proactive activities of the events such as “Japan-China Youth Friendship Exchange Year.”

On June 26, the Ministry of Land, Infrastructure, Transport and Tourism has announced the estimated demand for main construction materials in fiscal 2008. According to the report, as investment in construction is estimated to decrease 0.5% from the previous fiscal year, and that for building division is forecast to increase 3.6% and that for civil engineering division to decrease 6.1%, demand for cement, ready-mixed concrete, aggregates and asphalt are expected to decrease. On the other hand, demand for common steel products is estimated to increase to 25,100,000 tons (up 0.5% from a year earlier) and that for lumber is estimated to increase to 12,000,000 cubic meters (up 0.7%). Both of them show slight increases. Demand for cement is estimated to drop to 55,000,000 tons (down 0.9%), ready-mixed concrete to 110,000,000 cubic meters (down 1.7%) and asphalt to 2,200,000 tons (down 5.3%). Demand for lumber is calculated on the shipment volume from domestic manufacturers and includes the amount of shipment for other purposes than construction. It also includes imported timber as the material for lumber.

Tokyo Lumber Retailers’ Association has announced the standard prices for wood products in July. According to the report, prices for all the lumber items were estimated to be the same as the previous month, but those for lauan plywood for floor foundations (9mm, 12mm) and lauan structural plywood (9mm, 12mm) were estimated to drop ¥50 per sheet compared with the previous month. Though softwood plywood is scarce in 9mm items, the prices were left unchanged. Russian red pine rafter is also going short, but the price in July was said to be the same as June. However, the report warns “attention necessary” on purchasing prices of softwood plywood and red pine rafters in the future.

Japan Plywood Manufacturers’ Association has held its ordinary general meeting for fiscal 2008 at Tokyo’s Hotel Grand Palace on May 19. At a press conference, held after the meeting, Chairman Atsuhiro Inoue announced that he was reappointed as chairman at the general meeting for the fiscal year of 2008 when election of officers was to take place. Over the coming two years, he is going to steer the domestic plywood industry as the leader as he did heretofore. During the press conference, Chairman Inoue said, “We consumed 1,630,000 cubic meters of domestic logs as the material for plywood in 2007.” He also reported that usage of domestic logs has been expanding from cedar to Japanese larch, Saghalien fir and etc. “I would like to promote the usage of cypress for interior plywood.” He sets a goal of using 2,000,000 cubic meters of domestic logs in this fiscal year.

The 28th ordinary general meeting of Japan DIY Industry Association was held at Dai-Ichi-Hotel Tokyo on June 4. At the beginning, Chairman Yoji Sakamoto made a speech on this year’s activities and said, “We would like to continue activities lively under our slogan for the 21st century “DIY - the power of changing your life”, by coping with the shift of the consumption trend of baby boomers after their retirement and responding to changes of the housing administration.” Recently, housing policies have largely changed. They have shifted from housing improvement putting its stress on the hardware side to housing measures focused on the software side. By the way, to keep “longevity housing”, which is currently in the spotlight from the view points of safety and environmental aspects, the residents’ maintenance and renovation works are indispensable. Those changes on housing policies are an enormous push for the DIY industry.

The Forestry Agency held “a skull session about the usage of Russian timber” On June 9, the Forestry Agency invited people in charge to Ministry of Agriculture, Forestry, and Fisheries and held “a skull session about the usage of Russian timber”. On that day, representatives from Japan Lumber Importers’ Association, Sawmills of Russian logs, plywood factories, distributors of Russian lumber, distributors of softwood plywood, Japan Federation of Wood-Industry Associations, National Federation of Forest Owners Cooperative Association, and sawmills of Hokkaido larch attended the session and reported to the Agency on the current situation of Russia as a producing center, that of sawmills of Russian lumber in Toyama Prefecture, demand-supply environment of Russian lumber, the popularity of Russian logs as the material for plywood, and price trends of the logs. The Forestry Agency published the information of the Vladivostok customs office that the tariff rate, which the government will increase to 80% with effect from January 1, 2009, will be calculated based on the tax exclusive system. For example, when the trading price is $180, its log price is $100 and the tariff is $80.

Domestic Lumber Association has held a symposium named “Changes in the Situation of Construction of Wooden Houses and Lumber Industry”. Chairman Mamehara made a keynote speech “Development Direction of the Domestic Lumber Manufacturing Industry in a New Era of Wooden Houses”. He talked about (1) changes in building method and usage of lumber (2) revanche of domestic lumber aiming at promotion of environment, regional forestry, and regional economics (3) an essential task of domestic lumber manufacturers ~ stable supply of industrialized products (4) requests for the housing industry (5) requests for persons in charge of implementation and administration. In Japan, since the implementation of laws of promoting quality of houses, demands have moved to materials whose quality are clearly indicated, for instance, from green lumber to KD lumber or from solid lumber to engineered wood like laminated lumber. As a result, business performance of middle and small sized domestic lumber manufacturing industry and regional forestry was heavily damaged. Under the circumstances, the association is developing its activities to improve sawing technology by upgrading the quality and lowering the cost of solid lumber, in order to supply logs stably and strengthen the ties with the housing industry.

According to a report published by Ministry of Land, Infrastructure, Transport, and Tourism on May 14, the number of authorized building companies is 507,528 at the end of March 2008 (fiscal 2007), which decreased 3.2% or 16,745 from the same month in the previous year. This figure is less than that in the end of March 2000, when it marked the highest figure at 600,980, by 15.5% (93,452 companies). Due to business recession and shrinking scale of public projects, the number of building companies keeps decreasing. By prefecture, the number is overwhelmingly large in Tokyo with 46,245, followed by Osaka with 38,487, Kanagawa with 27,512, Aichi with 26,079, and Saitama with 24,174.

Consolidated results of Nice Holdings Inc. decreased largely In the consolidated results of Nice Holdings Inc. (headquartered in Yokohama City) as of March 2008, its revenues and profits decreased largely affected by the decreased housing starts caused by delayed application of building certification and construction starts with ¥257,407 million (down 9.4% from the previous term) of sales, ¥2,062 million (down 52.5%) of current profits, and ¥884 million (down 66.7%) of current net earnings. Sales of housing materials were ¥187,810 million (down 7.9%). Among them, those of the housing materials department were ¥163,999 million (down 6.8%) and those of the lumber market department were ¥23,810 million (down 5.5%). Sales of the real estate business were ¥63,162 million (down 13.1%). Those of the condominium department were only ¥37,435 million (down 24.1%). In the single-family house department, sales extended to ¥9,049 million (up 18%) owing to smooth completion and handover.

Dainihon Wood-Preserving Co., Ltd. held reception party for the completion of new head office Dainihon Wood-Preserving Co., Ltd. (Nagoya City) invited 120 clients all over Japan to a reception party to celebrate the completion of its new head office. The new building is a four-story steel reinforced building covering 2,277 square meters, which is divided into the office building (2,135 square meters) and the restaurant building (143 square meters). A lot of oak and teak are used for the interior, and its whole area has tripled compared with the old one. At the party, President Suzuki talked about the history of his company which his grandfather Soichiro Suzuki had established in 1922. He also said the company’s employee increased to more than 200, and its business contents now have a wide variety though it started from a preservation company of utility poles and ties. He added he would like to treasure the company’s tradition.

American Hardwood Export Council has held a news conference titled “Legitimacy and Sustainability of American Hardwood” at ANA Inter Continental Tokyo on April 23. It held the conference to announce their fixed conclusion about “Legitimacy of American Hardwood”, which it has been often asked from the Japanese users in connection with the green purchasing law in Japan. Mr. Alberto Goetzl of Seneca Creek Associates, who investigated this matter at the request of AHEC, published the conclusion saying, “As there are safety nets such as regulations and systems at the federation and state level against illegal activities and bad forest management, it doesn’t seem to be essential requirements for America-produced hardwood products to proof their legitimacy by showing traceability and certifications of CoC and Forest Stewardship by third parties.

Sumitomo Forestry Co., Ltd. has held a press conference concerning its settlement of accounts for the fiscal year ended March 2008 at the company’s meeting room on May 9. It announced that its sales were ¥861,400 million on a consolidated basis, which decreased 5.5% from the same term in the previous year; and that its current profits from its core business excluding special elements remained ¥12,200 million, which decreased 37.0%. President Yano attributed the poor business performances to “the worsening housing market environment”. Sales of its lumber and building material division decreased 9.5% from the previous term to ¥470,900 million. As housing starts decreased and demand for those products was depressed, distribution of lumber and building materials, as well as manufacturing and selling businesses of plywood was forced to face hard time. While domestic sales were terrible, sales of MDF for overseas were good. Concerning house construction, though the reduction in the amount of order receipt was no more than 3.6% term-to-term, business profits have decreased due to the soared prices of building materials. While newly-build houses including 2 x 4 houses are struggling in a harsh condition, house remodeling business and rental house management business marked increases both in sales and profit.

Miyazaki Prefecture Federation Forest Owners’ Cooperative Association has started test export of cedar chips on March 8 in collaboration with Japan Wood-Products Information and Research Center with the help of a subsidiary enterprise of the Forestry Agency. A hundred and two tons (5 x 40’ containers) of cedar chips left Hososhima port in Japan bound for Mawei port (Fujian) in China. Those chips, which are made from the association’s remainder materials (slabs), are going to be sold at local distribution prices. They are scheduled to arrive at China in late March, and are going to be sold to a paper manufacturing company in Fujian, which will process them into cardboard etc. The association is planning to start studying the feasibility of the export jointly with JWPIRC by the beginning of July, and compile a report on conclusive results and problems.

Forest Tree Breeding Center developed 50 breed types of anti hay fever Forest Tree Breeding Center in Forestry and Forest Products Research Institute has been studying about hay fever as a national disease in collaboration with prefectures, and newly developed one breed type of non-pollen cedar (sterile male flower), ten breed types of less-pollen cedar, and 39 breed types of less-pollen zelkova in fiscal 2007. Until now, they have developed two breed types of non-pollen cedar such as “Soshun” developed in 2005 and “Cedar Mie Sterile (Kansai) No. l” developed this time. The number of breed types of less-pollen cedar which produces almost no pollen has become 131 in total and that of less-pollen cypress has become 55. In future, the developed varieties are going to be distributed to seed orchards and scion gardens managed by prefectures as original races for land development and breed improvement.

On March 24, Ministry of Land, Infrastructure, Transport and Tourism has announced appraised value of land as of January 1, 2008. The national average of residential areas went up for the second consecutive year with a growth rate of 1.3%, and the increase has also expanded. Though it continued to grow in the metropolitan area centering Tokyo, growing rates of some other areas began to slow down. In rural areas, especially in suburban areas, land prices are unstoppably falling affected by their decreasing population and their economic slump. Gaps between cities and rural areas are widening. Though the average land price of rural areas in general has fallen by 1.8%, prices of the central cities of local blocks such as Sapporo, Sendai and Fukuoka are showing a strong upward tendency. Funds’ buying spree is now moving to district capital cities, and their land prices are affected by this trend.

April 15. Sumitomo Forestry Co., Ltd. has announced that a particle board factory of its subsidiary company PT. Kutai Timber Indonesia, which is manufacturing wooden building material, started a sales-level operation. Its production capacity is 128,000 cubic meters per year. It produces 4 x 6, 4 x 7, and 4 x 8 products with 6-40mm thick, and is planning to develop and sell lightweight particle boards utilizing the wood residue of lightweight planted trees. As Indonesia government has recently tightened regulations on deforestation of natural forests, it has become difficult to procure logs as the material for plywood. This factory is going to make a good use of wood wastes of surrounding facilities including plywood factories, sawmills and woodworking plants; as well as small-diameter logs and branches of fast growing trees or planted trees.

April 15. Japan 2 x 4 Lumber JAS Council held “The 25th Ordinary General Meeting” and “The 24th Grading Competition of Two by Four Structural Lumber” at Wel Sunpia Chiba on March 7. In this competition, many qualified persons selected from 68 factories of the conference’s 50 member companies competed with each other in grading skills based on the Japan Agricultural Standards. The highest award or the Agriculture, Forestry and Fisheries Minister’s Prize went to Mr. Masato Sakurai (Mitsui Home Components Co., Ltd.). He was also given an invitation card from Council of Forest Industries Canada to The Interior Grading Championship which is scheduled to be held in BC, Canada in May. He is going to visit Canada with the council’s 18th delegation which will observe the lumber manufacturing techniques and the products in the country.

April 15. “A Presentation Party on Development of New Products for Houses Using Local Wood” was held on March 12 and 13 at Shin-kiba Hall in Shin-kiba, Koto-ku, jointly hosted by Japan Housing and Wood Technology Center, Japan Wood Preserving Association and All Japan Wooden Housing Machine Precut Association. At the party, concerning to promotion of new usage of local wood, results of studies related to granted projects of Forestry Agency were reported as follows: “Development of new products in the fields of interiors for condominiums and exterior for houses (6 companies)”, “Development of new products utilizing local wood for foundation materials, for which a huge demand is expected (4 companies, 4 groups)”, and “Study on modularization of common lumber’s sizes and specifications, which is currently manufactured in small quantities with a wide variety (1 group)”.

March 31. Japan’s top house maker Sekisui House Group, with Sekisui House Ltd. (headquartered in Osaka City) as its core, has announced its medium-term business plan on March 3. The group announced a medium-term business plan on March 2006, and was trying to expand its business and performances. However, due to the sharp decline in the housing market, it has formulated a new plan ending in January 2011. It will try to increase its annual sales by 16% from those in the fiscal year ended in January 2008 to ¥1,850 billion and to achieve ¥125 billion of operation earnings, with cost curtailment by abolishing or merging show house sites from existing 548 to 70 all over Japan.

March 31. According to the market research in March by Tokyo Lumber Retailers’ Association, movement of wood products is still inactive. Though housing starts of wooden two-storied general houses are recovering to the level of the previous year, large size buildings are still suffering from the revision of building standards law and it takes time to get the certification for construction. Therefore, part of landowners started to give up their land, and land prices began to drop. At the retailing stage, the price for hemlock preserved sills (105mm x 105mm x 4m) has increased about ¥5,000 per cubic meter. Supply of lauan structural plywood 12mm is running short.

March 31. Japan Wood Preserving Association has authorized “Timbor”, a wood preservative agent and repellent for ants mainly consists of borate manufactured by US Borax Inc. (Colorado), as a wood preserver for pressure treatment which meets JIS K1571 standards. Until now, no borate-type wood preserver was authorized in Japan. From now on, a door is opened for the usage of the preserver just like in the USA and New Zealand. For Japanese housing industry and consumers, a new wood preservative agent has been added to the choices.

March 15. A symposium was held with a view to promoting utilization of “Miyazaki Cedar” at Yayoi Auditorium of the Tokyo University on February 12. Production of Miyazaki cedar has increased drastically since the beginning of the ‘Heisei’ era in 1989, and it currently achieves 1,000,000 cubic meters a year, which is seventh part of the Japan’s total cedar production. Forests in Miyazaki store 40-50 year old cedar the most, and the use of those timber is a very important issue. In a lecture titled ‘Is cedar strong or weak?’, the lecturer explained, “What is important for cedar is young modulus (modulus of longitudinal elasticity) and to provide appropriate data on strength etc. He also stressed that it is necessary for users to check them so that they can expand applications of cedar properly for posts, sills, and beams.

March 15. Gypsum Board Association of Japan has announced that gypsum board production in 2007 is estimated to be 568,773,000 square meters, which falls below the previous year’s result for the first time in five years with a year-on-year reduction rate of 3.1%. This figure is the January-November result plus an estimate for December. The production was largely affected by the situation of housing starts which have drastically decreased. By thickness, output of 9.5mm thick items holds 39.0%, that of 12.5mm ones does 55.6%, and that of items thicker than 15mm does 5.4% of all.

March 15. Repeal of the special exception for two stories wooden house is put off Ministry of Land, Infrastructure, Transport and Tourism has decided to put off obliging builders of small-size wooden houses up to two stories (so-called “No. 4 buildings”) to submit documents on their structure, though it had intended to install the policy in June 2009. Influenced by the tightened building standards law which was enforced in June 2007, housing starts have drastically decreased. If the ministry adds more screening, further trouble will be caused. After making the information known to architects and everyone in the industry, it will determine the timing of introducing the new rule again. From April, the ministry will try hard not to cause troubles again by keeping everyone in the construction industry, architectures and certification bodies informed of changes of procedures when the special law is abolished, and by showing the screening standards early.

February 29. Japan Federation of Housing Organizations held a press conference at Toranomon Pastoral Hotel Tokyo on January 28 and announced about its activities for this year which include long-life housing, environmental issues such as global warming, and housing tax systems. After enforcement of housing life standard law, Japan’s housing policy has drastically changed by the proposal of “200 year durable housing vision” in May 2007. The federation is planning to cope with (1) life-span expansion of houses, (2) environmental issues caused by global warming, and (3) housing tax system to enrich housing life – in order to improve housing lives of the people.

February 29. “Thanksgiving Party - 100th Anniversary of Plywood” was held by Japan Plywood Manufacturers Association at Hotel Grand Palace in Iidabashi, Tokyo on January 31. JPMA held this event to express its appreciation to people involved in machine manufacturing companies and adhesive makers which have contributed to plywood industry. Mr. Inoue, the president of JPMA, offered letters of appreciation to The Japan Woodworking Machinery Association and Japan Thermosetting Plastics Industry Association saying, “Although materials for plywood have variously changed during the 100-year history, we have overcome difficult problems in collaboration with machine manufacturers and adhesive makers such as usage of small diameter timber and variation of dryness according to wood species.”

February 29. An actual condition survey on medium sized builder's offices in the Tokyo area According to “Income and Expenditure of Individual Forest Managers in Fiscal 2006” compiled by the Ministry of Agriculture, Forestry, and Fisheries of Japan, gross profit of Japan’s individual forest managers was ¥2,603,000 (up 8.6% from a year earlier) per unit. Farming expenditure was ¥2,125,000 (up 0.8%). Their income (earnings minus expenditure) increased to ¥478,000 (up 66.6%). In expenditure, growths of labor cost and log expense was not so big, and rent expense and contract fee have decreased. In earnings, the reduction in production of materials, holding the majority, was as little as 1.9% (¥1,635,000). Sales of timber have largely increased to ¥409,000 (up 53.8%).

February 15. Daiken Corporation (headquartered in Osaka City) is going to raise manufacturer’s suggested retail prices of some interior construction materials from the shipment on February 21 by about 7%-12% because of the soaring prices of materials. Targeted products are insulation boards, rock wool sound absorption boards (sold by the name of “DAILOTONE”), decorated wooden ceiling boards, and members for construction of flooring and walls. The company says, “Manufacturing cost of products has largely increased due to the soaring prices of materials such as fossil products (adhesives and resin materials) and wooden chips. It is beyond the limit of our efforts to eliminate the expenses.” Range of price increase is between 8-10% in general.

February 15. The Japan Wood Working Machinery Association held a New Year’s lecture on January 22. It invited Mr. Koichi Koshiumi, Director of Wooden Housing Promotion Office of the Ministry of Land, Infrastructure and Transport and Tourism, as the lecturer. He talked about a revision of a law and explained that the concrete enforcement date for the detailed regulations is not decided yet saying, “We have decided to start workshops from the next fiscal year about the revision of the law which allows exceptional treatment for wooden two-storied houses. But the following schedule has not been decided yet.”

February 15. Kansai Precut Council, as an organization of wooden frame work precut factories in the Kansai area, has officially started on January 28. As the chairman, Mr. Genji Sato (president of Okamotomeibokuten Co., Ltd.) was elected. Though the wooden frame work precut business is playing an important part in lumber distribution at the present, the market will inevitably shrink due to decreasing housing starts caused by declining birthrate. Under the circumstances, this council was established in order to develop the industry by sharing information and having wholesome competition between each company. Its members (29 companies) cover mainly Osaka and also seven prefectures such as Kyoto, Nara, Wakayama, Mie, Hyogo, and Tokushima. The council is planning to increase the number of its member companies still more. At its inaugural meeting on the day, officers were elected and rules were decided. As a program for fiscal 2008, Accident Investigation Board is planning to hold an explanatory meeting of precut insurance (briefing the method of utilization) on February 18. The conference was established because companies in the precut industry have problems in common such as numerous hurdles to ensure the security of buildings. There have been cases in which construction was suspended due to a mistake of a factory. To cope with those cases in which Factories have to pay a large amount of money for compensation, it established Accident Investigation Board with Mr. Takuo Akino as an in-house counselor who is familiar with housing disputes. The council is also planning to establish a “Precut Insurance”. 【Board Member】Chairman: Genji Sato

January 31, “Gifu-moriren plywood”, 5-layered of cedar and larch Gifu Prefectural Federation of Forestry Cooperative Associations has started selling “Gifu-moriren plywood” manufactured from the prefecture produced cedar and larch. This product is five-layered plywood of 12mm thick. Its face, back, and the third layers are made of larch veneer; and its second and the fourth layers are made of cedar veneer. Hayashi Plywood Industrial Co., Ltd. (headquartered in Osaka City) is manufacturing the product in its Nanao factory and it has got JAS certification (F-4 stars). There is also nine-layered plywood with 24mm and 28mm thicknesses. They are planning to sell those products for public buildings and general houses.

January 31, “Liaison Conference of Responsible Ministries and Agencies Related to Building Certification Issues” To cope with the plunge in housing starts after the building certification made stricter, “Liaison Conference of Responsible Ministries and Agencies Related to Building Certification Issues” has been inaugurated by Ministry of Land, Infrastructure, Transport and Tourism, Ministry of Economy, Trade and Industry, Ministry of Internal Affairs and Communications, Ministry of Agriculture, Forestry and Fisheries, and etc. By sharing information, they are going to check results of previously conducted countermeasures for a certain period. They will jointly monitor the situations to recognize the progress of talks for dissemination of those policies and support programs for small and medium-sized corporations. In addition to cross-sectoral support measures such as financial assistance they have prepared up to now they will become ready to take prompt actions by keeping in closer contact.

January 31, Government budget draft for the 2008 fiscal year has been fixed. Budget for Housing Bureau of Ministry of Land, Infrastructure, Transport and Tourism decreased 3% compared with that in the previous year at ¥989.1 billion. In order to promote the featured scheme “200-Year Durable House” which seeks to prolong the life of houses and make a circulating use of them, ¥13 billion was earmarked. In addition to this, budget for earthquake retrofit works for “Securing Safety and Security of Houses and Buildings” was largely expanded. In the priority fields as “Dissemination of Eco-friendly Houses and Buildings”, “Enhancement of Safety Nets for Houses”, and “Support to Let Regions Vibrant”, new projects were created or added.

January 15, Western Red Cedar Export Association has held a seminar “Basic Knowledge on Red Cedar Products” at Canadian Embassy in Aoyama in Tokyo on December 4. A specialist of western red cedar from B.C. Canada gave a lecture about its characteristics, logging situation (situation of resources), the standards of products, finishing of the products, sales and the marketability of the products, and etc. Western red cedar growing in B.C. occupies 20% of total standing timber, and its annual logging volume is stable. At the seminar, western red cedar’s supreme stability of dimensions and durability were introduced.

January 15, MLIT’s new technical support for minor enterprises Ministry of Land, Infrastructure, and Transport has announced on December 7 a new plan that it will establish support centers for application of building certification and offer technical support for minor enterprises in order to cope with the delay occurring in the process of building certification. At the planned support centers, members of Japan Structural Consultants Association and prefectural architect office association will directly advise the ways of coping with the reexamination of the structural criteria and the ways of making new application figures, on the basis of the fact that some of small building companies, carpenters, and building offices which are doing practical building works are having trouble with the application procedure.

January 15, Total shipment of acoustic floor of Apr.- Sept. 2007 Japan Acoustic Floor Manufacturer’s Association has reported that its total shipment of acoustic floor in the first half of 2007 (April-September) were 4,651,899 square meters (0.6% of increase from the same period in the previous year). Though it marked a record shipment in the 2006 fiscal year with 9,970,000 square meters, its demand environment is tough because housing starts of condominiums during January-September 2007 showed a double-digit reduction (down 16.5%) compared with a year earlier with 143,389 units. However, demand for acoustic floors of high sound insulation performance is popular, so the result shows a fractional increase in general.

December 31, Rengo Chosa has reported that the total number of bankruptcy related to lumber, building materials, furniture and woodworking showed an increase in October after an interval of three months with 30 cases (up 13% from the previous month). Compared with the figure in a year earlier, it showed an 11% of growth and the trend took an upward turn. Their total liabilities were ¥21,174.79 million. Analyzing them by the size of debts, 47% had less than ¥200 million of debts, 27% had ¥200 million ~ ¥500 million, 10% had ¥500 million ~ ¥1,000 million, and 16% had larger than ¥1,000 million. And more than 70% of all the bankruptcies were of small and tiny companies. Breakdown by industry group is as follows: 10 cases were in lumber related industry (up 233% compared with both of the previous month and the same month in a year earlier), 15 cases in building material industry (down 6% both in month-to-month and year-on year), and 5 cases in furniture and woodworking industry (up 25% month-to-month, down 38% year-on-year).

December 31, Commemorating its 100th anniversary, a general trading company of lumber Asano Enterprises Inc. (headquartered in Osaka City) held a party to show its gratitude in Rihga Royal Hotel (Osaka) at five p.m. on November 30. To the party, about 550 of its business partners from all parts of Japan as well as from abroad were invited. President Asano said, “The founder of our company Kichizaemon Asano reclaimed the land from Kuwana in Mie Prefecture through Hokkaido in 1899, and Sakujiro Asano started afforestation and lumber business in 1907. We owe our present prosperity to the accumulation of our predecessors’ bloody efforts and warm cooperation of clients. We would like to keep growing by founding solid basis.”

December 31, Yano Research Institute Ltd. estimates that last year’s house remodeling market shrank 7.7% from a year earlier to the ¥6,000 billion scale. As family finances seem to have been spent for other objects than house remodeling, the scale of the market shrank in 2006. The previously made medium-term prospects till 2020 have been revised downward taking into account the effects of deflation, the reduction of working income, and the trends of money interests and stock prices. However, the expected scale of the market is no less than ¥6,900 billion in 2010 and ¥7,900 billion in 2020, considering that houses built after 1990 will reach the remodeling age, that the number of households will reach the peak, and that the society will put stress on existing house maintenance rather than new house construction.

December 15, Seven Industries Co., Ltd. (headquartered in Minokamo City in Gifu Prefecture), a laminated lumber manufacturer, announced its midterm account settlement and reported ¥8,869 million (down 10.9% from the previous term) as sales and ¥124 million as ordinary loss. The main reason for this poor performance is the sharp reduction in sales of commodities for single-family houses. As a part of its operation reform, the company has expanded its monthly manufacturing capacity to 10,000 tsubo with three lines including an added metal precut line. And it also started production of hybrid laminated ‘hirakaku’ (300 ㎥ per month) using lamina made of Russian larch for the outermost layer and Japanese larch for inner layers.

December 15, On November 21, “Exhibition and Business Negotiation Fair of Lithuanian Housing Materials” was held at World Import Mart Building in Ikebukuro on the sidelines of the Lithuanian housing-related industries trade delegation’s visit to Japan. On that day, eleven Lithuanian companies and bodies with Japanese companies centering the members of Imported House Industries Organization exchanged information and had intimate conversations on the feasibilities of their exporting wooden housing materials and building materials toward Japan. Volume of imports of wooden products from Lithuania is increasing year by year. And Japanese companies’ interest to the import is growing.

December 15, It has been revealed that as many as 88% of people would like to live in a wooden house after all. This is the result of an inquiry survey on the Tokyo residents who went to a fair related to the life with wood on October 6 and 7. Among the 669 respondents, 161 were younger than 40 years old, 505 were older than 41, and 3 didn’t show their ages. According to the result, 202 were living in wooden houses and 415 in non-wooden houses (condominiums). Among the latter, 29% answered that they want to own a single-family-house or rebuild their houses in the near future. It is also worthy of attention that 31% of them answered they would like to use Japanese wood.

November 30, Bankruptcies appears by the effects of revised Building Standards Law Due to the effects of the revision of the Building Standards Law, bankruptcies in the building industry have begun to appear. According to Teikoku Databank, a corporate credit research company, with a decrease in public works and trend for free market competition, the construction industry is shifting to a high level of bankruptcies due to a decline in the amount of orders being made. Adding to this, construction has reached stagnation due to delays in confirmation inspections following the revision of the Building Standards Law, so financing has deteriorated, and cases of bankruptcies have arisen.
The person in charge at Teikoku Databank said, "The effect is still not all that big, but the talk surrounding it is increasing little by little. And it's expected that these kinds of cases will increase in the future, so the trend should be watched closely."

November 30, October research of “managers’ business sentiments” by JFHO Japan Federation of Housing Organization seasonally conducts (January, April, July, and October) survey of “managers’ business sentiments” about low-rise houses for its 16 member corporations. According to the October research, their business confidence indexes for the result of the second quarter (July-September) of the 2007 fiscal year indicated a 40 point drop in the total unit number of order receipt and a 47 point drop in the total amount of order receipt compared with the same period a year earlier. Both the number and the sum of order receipt showed big falls in the wake of the previous research made in July (47 points down in number, 40 points down in amount), betraying the industry’s expectation to recover for the fourth consecutive period. The survey forecast the order receipt in the third quarter (October-December) to increase with expected growth rates of 13 points in both the number and the amount. Average number of the 2007 fiscal year’s housing starts forecast is 1,195,000 units (1,263,000 units in the July survey). Expected numbers of houses by use are: 333,000 units (353,000 units) in owner-occupied houses, 350,000 units (367,000 units) in built-for-sale houses, and 515,000 units (535,000 units) in rental houses.

November 30, Nagao (headquartered in Osaka), a laminated lumber manufacturer, has stopped its business on November 2 and went bankrupt. The company seems to have owed around ¥1,600 million mainly from financial institutions. Nagao, established in 1983 as a joinery company, began to manufacture laminated lumber and marked annual sales of ¥3,700 million in 2004 mainly in structural laminated lumber. However, due to the aggravated business environments, its sales of 2006 decreased to ¥2,660 million. This term, too, it was in a quite tight cash-flow situation due to intensified competition among laminated lumber manufacturers and declining demands as the result of the stagnant housing starts.

November 15, MLIT notified additional measures for Smooth building authorization operation Ministry of Land, Infrastructure, and Transport has notified its philosophy to lubricate the building authorization operation in order to settle down the confusion caused by the tightened examination procedure. And it has published additional measures as follows: it will provide consultation before the applicants apply for the authorization, and it will support building companies’ funds management by lending safety net loans. Though the Minister Fuyushiba says he would be prepared to ease operational restrictions, it seems difficult to calm down the building companies’ discontent and uneasiness.

November 15, Demand forecast for main construction materials in November Ministry of Land, Infrastructure, and Transport has compiled a demand forecast for main construction materials in November. According to it, the demand for lumber commodities is prospected to show an 11.4% of year-on-year reduction with 1,000,000 ㎥. Including this forecast figure, the demand is to show four consecutive months of decrease by double digits since August. The fall is continuing for eight months since April. (See the table) The figures are based on domestic manufacturers’ shipments of lumber and include those for non-construction purposes. And they also include imported timber as the material for lumber. For your information, demand for other materials are also decreasing as follows: cement decreased 5.5% to 5,200,000 tons, ready-mixed concrete did 2.2% to 11,000,000 ㎥, general steel products did 3.3% to 2,150,000 tons, and shaped steel did 4.3% to 470,000 tons.

November 15, Press conference on the strike by forest industry people in Canada Due to the strike by people in the forest industry that has continued in Canada since July, Rick Jeffery, CEO of Coast Forest Products Association in Canada, came to Japan and held a press conference at the Canadian Hemlock Partner Association office in Toranomon, Tokyo on October 29. At the press conference, Jeffery emphasized that the problem of the strike in Canada was nearly resolved and that production of Canadian hemlock products was already being restarted. Also regarding the logs that are used as the material for products, Jeffery said the felling of logs in the region has exceeded the levels of the same period last year, and he made it clear that in the future Canadian hemlock products intended for Japan will be smoothly supplied.

October 31, Yoshino Lumber stops to production of Russian red pine lumber Yoshino Lumber Co., Ltd. (Iwaki City, Fukushima Prefecture), a leading red pine lumber company, has announced that it will stop production of lumber from Russian red pine logs at the end of October. In the future, it is going to manufacture lumber from Russian red pine, hemlock, and Douglas fir rough lumber. It has manufactured 5,000 ㎥ of lumber from logs monthly in its two sawmills. They are to be closed at the end of October.

October 31, Chugoku Lumber Co., Ltd. (Kure City, Hiroshima Prefecture) has announced that its sales marked the record high with ¥70,929 million in the report of account settlements as of June 2007. The company attributes this growth to the expanded sales of expensive products such as KD lumber and laminated lumber. The breakdown of the sold products are as follows: 503,000 ㎥ of dry beam (KD ‘hirakaku’), 30,000 ㎥ of KD batten products, 114,000 ㎥ of laminated lumber products, and 500,000 ㎥ of green lumber products. The proportion of dried lumber against the total production was 60%. The volume of precut lumber manufactured in its four factories amounted to 373,500 ㎥.

October 31, The protracted strikes in the coast area of BC in Canada are going to be concluded. According to Japan Wood-Products Information and Research Center’s source in Seattle, FIR (Forest Industry Relations, Ltd.), a representative of 31 forestry and lumber related companies in the coast area and USW (United Steel Workers) have reached an agreement on October 16. FIR is going to ask the member companies for their approval toward this agreement, and USW will try to gain its union members’ approval. FIR seems to have made concessions on issues questioned by the union side such as work shifts, security, and separation allowance. The strikes, continuing since July 21, will finally be put an end. For your information, USW will negotiate with three non-member companies of FIR so that it can draw concessions of the same sort from them.

October 15, The close rate of condominiums, which holds a large share in housing starts, is showing a declining trend. According to a report on the condominiums’ market trend compiled by Real Estate Economic Institute Co., Ltd., 3,337 units of condominiums were newly put on the market in the metropolitan area in August. Though the number showed a year-on-year growth after an interval of eight months with an increase rate of 1.9%, their close rate went down to 65.6% (down 11.7 points Y/Y or down 8.5 points M/M). The facts that the close rate is going down and that it has dropped below the 70% mark as a sales target seem to mean that buyers are losing their motivation.

October 15, MLIT forecasts demand of construction materials In the demand forecast of primary construction materials in October issued by the Ministry of Land, Infrastructure, and Transport, the prospect for timber showed the seventh consecutive month of drop (since April) with 1,075,000 ㎥ (down 5% year-on-year). This figure is based on the lumber shipment volume of domestic manufacturers and includes the volume shipped for non-construction purposes. It also includes imported timber as the material for lumber. Expected consumption of general steel increased 0.9% to 2,300,000 tons, and that of mold steel increased 1.4% to 520,000 tons, and that of small bar steel decreased 1.2% to 970,000 tons.

October 15, Five associations handed demand to director Tsuji, of Forestry Agency Five bodies including Japan Lumber Importers’ Association, Japan Federation of Wood Industry Associations, Japan Plywood Manufacturers’ Association, Japan Russian Wood Products Association, and Japan Laminated Wood Products Association have put forward a demanding paper titled “About ‘the decree that gradually raise the export tax imposed on unprocessed timber’ in Russia--For a stable supply of Russian timber” to Chief of Forestry Agency Mr. Kenji Tsuji on September 21. Regarding the Russian announcement of increasing the export tax on their logs up to 80%, anticipating crucial damage on the Japanese lumber industry, the associations called for the ministry’s support as follows: (1) Try to convince Russia to reconsider the export tax revision (2) Try to let Russia disclose its information.

September 30, Order receipt of the 2 x 4 component companies in the Tokai Area has seriously decreased. New construction starts of 2 x 4 houses throughout Japan last year was brisk breaking the 100,000 unit mark, and in the first half of this year (January-June), their order receipt slightly increased from the previous year supported by the firm transactions. However, after hitting the ceiling in July, the reception will certainly take a downward turn. A factory owner of 2 x 4 components concerns about the big drop of profits saying, “Though monthly sales of the products up to July increased in comparison with those in the same period last year, the increases of materials from the end of last year to this year have not fully been passed onto the products’ selling prices.” In sales, it is concerned that unsold stocks are increasing in major housing companies since the latter half of 2006.

September 30, Currently it takes a very long time to get a certification for construction as the result of the revision of building standard law which was put into effect in June 20. The revision aimed at tightening certification and inspection of constructions was made in order to cope with the problem of fabrication of structural calculation sheets in 2005. But at present, both of architects who make the documents and the municipalities who accept them are suffering from this change resulting in the delay of works. This problem has directly affected the July’s housing starts which decreased 23.4% year-on-year. This situation is anticipated to continue for another several months.

September 30, Retailing prices of many wooden products have dropped in September. The weakest item is plywood: prices of 12mm plywood for concrete forming, lauan plywood for floor foundation, lauan structural plywood, and softwood structural plywood made ¥100-450 of drops per sheet. Prices of Russian red pine rafters and domestic lumber items such as cypress posts (105 square, 120 square), cedar long posts, and cedar rails were also indicated to be lower than the previous month. Retail prices of lumber are really bearish.

September 15, Forestry Agency has set a goal of expanding domestic lumber supply by 35% to about 23,000,000 cubic meters by 2015. It will put “Supporting Measures for Production of Locally-Produced Lumber and Improvement of Distribution Centers” into execution from the next fiscal year in order to improve the quality of local lumber and efficiency of distribution systems. Though formulation of “New Production System” aimed at supplying competitive lumber for housing companies has already started, the agency is planning to support supplying lumber even for construction companies by adopting the above-mentioned supporting measures. It will help projects which will improve quality of products and efficiency of physical distribution, and those which will establish facilities for quality improvement and bases for efficient distribution.

September 15, JFHO reports the actual conditions of custom-build single-family house 2006 According to the result of an investigation made by Japan Federation of Housing Organization, the average purchaser of custom-build single-family house in the 2006 fiscal year is aged 43.7, has 3.63 families, and earns ¥8,780,000 per year. Gross floor area of the house is 142 square meters, and the construction cost is ¥33,480,000. The proportion of two-family homes is only 14.8%. Its construction cost is on an increasing trend in recent years. The percentage of house rebuilding which had been on a downward trend till last year has increased as largely as 2.8% to 38.7%.

September 15, The leading plywood manufacturer SEIHOKU (headquartered in Tokyo) has announced that it will reduce the production of domestic softwood plywood by 15-20% in September in the wake of August due to the sluggishness of actual demands. Since the beginning of this year, housing starts are showing year-to-year reduction and there is delay in the issue of construction certification due to the revised building standards law. Consequently, market situation of plywood has been bearish since July. To cope with this situation, manufacturers are doing adjustment of distributors’ inventories by production curtailment of softwood plywood as the main force. Among them, Seihoku Group is trying to rebuild the market condition by output cut in September following July and August.

August 31, As price reduction is expected to be accepted in contract negotiations of North European lumber for the third quarter, domestic prices of whitewood five-ply connective posts and white wood studs have remarkably dropped. “We need to reduce the high-priced inventories, or we will make big losses after the local prices take a downturn.” (A person in charge of laminated lumber) The market is in chaos as price of white wood studs are between ¥50,000 and ¥55,000 per cubic meter while those of five-ply laminated connective posts dropped below ¥2,200 per piece.

August 31, Hokkaido Lumber Importing Forum has compiled the importing situation of lumber in Hokkaido for the first half of this year (from January to June). Total imports of Southsea lumber, Russian lumber, and American lumber decreased 7.3% from a year earlier to 259,306 ㎥. In Southsea lumber, those of common lumber decreased 22% to 15,741 ㎥, and sawn lumber showed a 27.9% of drop to 1,406 ㎥. In Russian lumber, common lumber increased 22.7% to 90,560 ㎥, materials for AB pulp decreased 30% to 1,438 ㎥, those for C pulp decreased 20% to 37,779 ㎥, and sawn lumber swelled 6.8% to 14,120 ㎥. And in American lumber, common lumber (softwood) grew 0.9% to 31,311 ㎥, and sawn lumber showed a 25.8% of reduction with 66,951 ㎥.

August 31, Wood One (headquartered in Hatsukaichi City in Hiroshima) has set up a private website named “Wood One Net Users” (http://www.woodone.co.jp/won/) as an online ordering system for its members only. This is a website which various types of registered member corporations (builders’ offices, shops, and wholesalers) using the network can log in and browse the site after they receive user IDs and passwords issued by the company. This site presents information of new products, events, and campaigns and also revised information of the company’s products. The company, at the same time, collects messages from the members and tries to promote company-to-member and member-to-member communications.

August 15, 2007 Statistics Bureau of Ministry of Internal Affairs and Communications has released flash reports on "2006 Statistical Survey on Establishments and Enterprises". According to it, Japan's total number of wooden building construction establishments is 83,700 and that of other construction establishments (except for wooden buildings) is 30,776. Compared with 2001, both of them decreased about 10%. On the other hand, the number of house remodeling establishments has almost doubled in five years (10,212). As for others, carpentry ones have decreased 24.1% to 30,658 (down 9,722), plastering ones did 17.0% to 19,655, and iron frame/reinforcement placing ones did 17.0% to 12,286.

August 15, 2007 Unit prices of cypress logs are decreasing. According to Kinki Chugoku Regional Forest Office, the average selling price for the logs in June was ¥13,689 per cubic meter, which is only 84% of the preceding month. The reason for the drop is that lumber manufacturing companies have lost their enthusiasm for purchasing logs, because demands for construction have decreased since March. A similar tendency is seen in cedar logs. The office forecasts that an uncertain situation like this will continue till the beginning of fall.

August 15, 2007 Forest Agency has developed "Targets for Technical Development of Wood Products" for the next five years. Based on "basic policy to improve the system of timber industry and expand utilization of domestic timber", which includes concrete plans to go ahead with the basic plans for forests and forestry, Exploratory Committee (headed by Nobuaki Hattori, professor of graduate school of Tokyo University of Agriculture and Technology) has compiled the targets after a lot of discussions. It picks up tasks such as improvement of quality and performance, development of processing technology, development of new products, and expansion of utilization of woody biomass.

July 31, 2007 Ministry of Land, Infrastructure, and Transport Japan has published the final result of Home Design Performance Indication System in the 2006 fiscal year (from April 2006 to March 2007 ). According to the report, the number of houses which got the qualification increased 30.8% year-on-year to 255,507 units. It accounts for 19.9% of the total housing starts in the same period (1,285,246 units), and is steadily increasing from 5.3% in the 2001 fiscal year when the system started.

July 31, 2007 JRWPA, asked government to halt Russia's export tax rise Japan Russian Wood Products Association (Chairman Kazuhiro Tsuzen) visited the Forestry Agency in Kasumigaseki in Tokyo on June 29 and handed Administrator Kenji Tsuji a letter demanding that both countries talk about Russia's increase in log exporting taxes. In the letter, the association requests that the government of Japan persuade the Russian government to do away with the tax increase saying, "If 80% of export tax is imposed, exporters' burdens will be too heavy that no contract of logs could be made."

July 31, 2007 Processed volume of precut post & beam in June According to a report published by Aichi Wooden Housing Precut Committee, the processed volume of precut lumber for traditional (post and beam) construction wooden houses (16 member companies, 17 factories) in June decreased 0.8% from the previous month or 9.6% from a year earlier to 63,181 tsubo (1,672 units). Refer to the graph. The cumulative performance during January-June this year has also decreased 3.3% from the same term last year to 360,657 tsubo (9,473 units). Usually, precut factories' manufacturing volume increases in the full-level demand season of summer and autumn. The question is how the poor result in the first half of this year affects the latter half.(*1 tsubo=3.3·)

July 15, 2007 Japan Southsea Lumber Conference has held its regular general meeting (the 50th) on June 14, 2007 and reported the business results and the settlement of balance in the 2006 fiscal year. It also deliberated business plans and the budget draft for the 2007 fiscal year which were approved unanimously. The conference has also reviewed the Demand Forecast of Tropical Logs (Southsea plus African Timber) by Area for 2007 made in December 2006 , and announced revised figures. According to them, Japan's total demand for tropical logs in 2007 will decrease 1.9% from the shipment in 2006 (1,319,000 cubic meters) to 1,294,000 cubic meters.

July 15, 2007 Lumber arrived in June at Tokyo Lumber Terminal In June, lumber from North America (34,000 cubic meters), Europe (20,000 cubic meters), Russia (11,000 cubic meters), China and other items (12,000 cubic meters), and 4,000 cubic meters of boards were expected to arrive in the Tokyo Lumber Terminal. And in July, 33,000 cubic meters of North American lumber, 21,000 cubic meters of European lumber, 7,000 cubic meters of Russian lumber, 14,000 cubic meters of Chinese lumber etc., and 4,000 cubic meters of boards are scheduled to arrive there. Total inventories of products are prospected to be 179,000 cubic meters at the end of July.

July 15, 2007 Mr. Erik Aasheim and Ms. Ida Weider Hagemo in charge of JAS in Treteknisk (NTI), an overseas JAS accreditation organization in Oslo in Norway, came to Japan and visited Ministry of Agriculture, Forestry and Fisheries and Food and Agricultural Materials Inspection Center to exchange JAS related information. They visit Japan every year in this season to make follow-up talks about JAS. The number of European laminated lumber factories, which are JAS-certified by Treteknisk, already reaches 20. And the quantity of structural laminated lumber supplied by those factories was 460.000 m3 in 2006 , which is more than 50% of the total volume of structural laminated lumber imported to Japan.

June 30, 2007 Forestry Agency, in May 23, has announced that Japan's production (preliminary figures) of special forest products in 2006. Production of mushrooms, holding the majority of them, has leveled off with 3,861 tons of dried shiitake mushroom (6% down from a year earlier) and 66,251 tons of fresh shiitake mushroom (2% up). Production of enokitake mushroom, holding the largest part of all mushrooms, was almost the same as the previous year with 114,542 tons. Regarding bunashimeji and eringi mushrooms, their production has increased in the wake of the previous year. Production of matsutake mushroom has expanded to 1.7 times or 65 tons. As for imports of mushrooms, those of dried shiitake mushroom were 7,217 tons and its percentage of imports has become 66%. Imports of fresh shiitake mushroom were 16,394 tons and 20%. Other than mushrooms, imports of bamboo shoots were 23,201 tons (16% up). Those of white charcoal, black charcoal, and bamboo charcoal were lower than the previous year.

June 30, 2007 Earthquake proof furniture by France Bed France Bed Co., Ltd., furniture making and selling company headquartered in Tokyo, has released 21 models or 38 types of "Earthquake-Resistant Furniture (FB-M6) Series" in May this year for the wooden house market such as building and remodeling companies. Furniture of this series helps minimize its tipping accidents and physical damage by earthquakes. In the anti-seismic remodeling construction market, where vast needs exist, the company is planning to find a measures of survival in furniture combined proposals for builders in earthquake proof remodeling constructions. It is predicting sales of ¥1,500 million for the first fiscal year.

June 30, 2007 Prices for Nordic and Russian timber products have increasingly become high compared with those for domestic cedar and Douglas fir ones. For example, Douglas fir KD 'hirakaku' is ¥57,000-58,000 while European red wood laminated 'hirakaku' is ¥70,000 per cubic meter. Cedar KD studs are ¥55,000 while whitewood studs are ¥60,000. Against ¥60,000 of Yezo rafter, cedar rafter is ¥55,000 (the Chukyo market). Along with the expansion of price differences, clients' demands tend to shift to domestic cedar and Douglas fir products.

June 15, 2007 Hokkaido to build a visitor center in Okhotsk Sea Ice Park In Okhotsk Sea Ice Park, which is under construction, Hokkaido government is going to build a visitor center named "Blue Sky Communication Center" as a prefectural facility filled with woody fragrance. This center is equipped with facilities such as an indoor play ground, a work-study room, and an administration office. Hokkaido will build the center in hybrid structure, combination of wooden construction and reinforced concrete construction (one-storied RC structure). It will use 93 cubic meters of Japanese larch laminated lumber for beams; and also softwood plywood and flame-retardant Japanese linden plywood for floors (581 square meters), walls (244 square meters), and ceilings (981 square meters). The government is planning to start the construction in the 2007 fiscal year and complete in 2009.

June 15, 2007 A law regarding guarantee against defects, which requires all the builders of newly built houses to take out insurances or to reserve damage deposits and guarantee money, was passed in the Lower House on May 24. During the rest of the year, an appointment of insurance companies and the preparation of punitive clauses will be done. And in two and a half years, it will be put into effect.

June 15, 2007 Nice, ¥284.2 billion sales recorded favorably In its consolidated balance sheets as of March 2007 , Nice Corporation (headquartered in Yokohama City) recorded ¥284,190 million of sales (8.3% up) owing to the increased sales in condominiums in housing materials and real estate projects. Its ordinary profit was also favorable with ¥4,346 million (22.7% up) owing to the largely increased profits in housing materials and the improved profit rate in real estate business. Sales of its housing material business were ¥203,919 million (10.2% up). The corporation has positively made capital investments in opening facilities like Nagaoka office (Niigata), San-in office (Shimane), and Shiga precut factory, and in acquisition of land for general distribution center (Kita-Kyushu City).

June 15, 2007 Ministry of Land, Infrastructure and Transport reported that number of wooden three-storied single-family houses in the 2006 fiscal year increased 4.1% from the previous year to 31,451 units. Among them, 110 units are in fire-prevention areas and 18,706 units are in semi-fire-prevention area. Compared with a year earlier, they have increased by 7.8% and 4.3% respectively. As for wooden three storied collective houses, the number of buildings increased 14.8% to 473 or houses increased 32.2% to 3,962.

June 15, 2007 Japan Plywood Manufacturers' Association held its 30th ordinary general meeting in Nagoya on May 25. About 220 members attended to the meeting from all over Japan and confirmed the association's spirit, "Cooperation and Solidarity". The association became an authorized body last year when the green purchasing law was put into effect, and the number of its members is rapidly increasing. It is planning to increase the number of member companies to 800 within this year, and 1,000 by the end of 2008.

May 31, 2007 Price increase of Hokkaido wood chip and pulpwood On April 26, forestry and timber concerned entities in Hokkaido called on relevant parties such as the head office of a paper company to understand "increases of the purchase prices in wood chips and pulpwood of Hokkaido produce". They requested Oji Paper Co., Ltd., Nippon Paper Industries Co., Ltd., and also Ministry of Agriculture, Forestry and Fisheries as the competent authority for their understanding and cooperation. Regarding wood chips and pulpwood produced in Hokkaido, the entities asked the organizations to give due consideration to keep appropriate prices in order to facilitate the demand and supply. They expect the prices to increase more than ¥1,000 per cubic meter.

May 31, 2007 Koshii and Co., Ltd. (headquartered in Osaka City) started a plantation business of young acacia hybrid trees in Sabah in Malaysia by establishing a local joint venture, K.M. Hybrid Plantation SDN BHD in 2005. Recently, Asahi Woodtec Corporation (headquartered in Osaka City) has made capital participation to Sabah Plantation Co., Ltd., which is supporting KHP's project. Sabah Plantation was established in December 2006 as a Japanese company with ¥300 million of capital which was wholly invested by Koshii. With Asahi's participation, capital ratio has become 80% (Koshii) and 20% (Asahi Woodtec).

May 31, 2007 Hida-Takayama Forestry Association (Gifu Prefecture), formed by an amalgamation in wide area in June 2005 , is working in 230,000 hectares of forests in Takayama City and Shirakawa City. Recently, construction of a timber processing facility named "Lumber Distribution Center" was finished and its completion ceremony was held. This center was built by the association at a site adjacent to "Kinosato Danchi"(the town area developed) in order to expand the usage of local timber. In its first year, 22,000 · of cedar logs are planned to be consumed. It is now producing 1,000 · of lumber every month centering structural lumber like beams and cross beams of "SD15" level.

May 15, 2007 Forestry Agency and Federation of Japan Forest Owners Associations have decided to establish "Domestic Timber Stable Supply Council" to provide a stable supplying system of domestic timber from both private and national forests. Under current conditions that supply of foreign timber resources are stringent, active utilization of domestic timber has gotten a lot of attention. However, there are many problems, for example, scales of private forests are small and their thinning operations are not done systematically. In order to supply domestic timber stably from private and national forests in cooperation to answer the users' needs, the council was founded with the participation of the related central bodies.

May 15, 2007 Sales results latter half 2006 reported by At Home At Home Co., Ltd, a real estate information service company, has surveyed the sales results in the latter half period of 2006 in the metropolitan and other three prefectures. According to the report, the total number of contracts for construction of new single-family houses decreased in all the areas to 9,719 units (down 20.2% from a year earlier). Contrarily, the sum of the contracts has increased 5.2% from the same period in the previous year. The percentage of contracts for the houses of more than ¥50,000,000 has increased to over 10% of all. Especially in the 23-Wards in Tokyo, the average has exceeded ¥50,000,000 after an interval of nine periods.

May 15, 2007 Domestic softwood plywood manufacturers are trying to reduce the use of Russian timber as the material, prices of which are hovering at high. Instead, they are trying to expand the use of domestic timber centering cedar as the replacement. To use cedar timber, which contents high level of water, they are planning to install more dryers. Machine makers are happy with the rushing orders saying, "We will be fully occupied with those jobs for coming one or two years."

April 30, 2007 Nice established subsidiary company in Niigata Nice Corporation (headquartered in Yokohama City) has acquired operation, land and buildings from Kanesan Co., Ltd., which is the largest manufacturer and distributor of Siberian wood in Niigata Prefecture, and started operation of the newly established 100% subsidiary company "Kanesan Co., Ltd."(President: Jun Suzuki) in March.
Kanesan was founded in 1968. Having its base in Niigata East Port Industrial District, it has been dealing with Siberian wood since early stage of its establishment. The company also has sales networks centering the Sea of Japan side as well as physical distribution function to the Tohoku and the Kanto areas.

April 30, 2007 Arrivals of North American wood products to Tokyo Lumber Terminal (No. 15 pier) are not growing. Those in January were 41,000 ·, February 41,000 ·, March 32,000 · (estimate), and those in April are expected to be 39,000 ·. Warehouse stocks have finally become less than one month at the end of March. North American timber has attracted attention from the market again as the replacement of European and Russian timber, prices of which are soaring. But suppliers don't seem to be highly interested in this item.

April 30, 2007 A movement that dimension lumber for North American 2x4 construction should be actively used as the member of wood frame houses is growing. There have been cases that wooden house building companies and housing franchises use two-by lumber for rafters and joists in wood frame construction. Usage of 2x4 lumber is now expanded to studs and diagonal bracings, owing to soaring European lumber. The SPF Group of Council of Forest Industries Canada is making a booklet which explains the way to make use of SPF lumber in wood frame houses.

April 15, 2007 Emachu Mokuzai Co., Ltd. subsidizes lumber-related research projects through the Japan Wood Research Society. As two projects were finished, a meeting was held to announce their results at Yayoi Auditorium of Faculty of Agriculture, the University of Tokyo on March 14. Titles of the subsidized projects are "Strength performance evaluation of structural lumber using the drying schedule as an indicator" and "Current situation and future view of effective use of cascade in woody biomass for establishing recycling-oriented society". The company also encourages contribution of treatises from overseas by supporting their manuscript submission fees. Following presentations of those projects, five foreign articles which were selected to receive subsidies were introduced.

April 15, 2007 To cope with hay fever, which has become a social problem as a national affliction, Forest Tree Breeding Center has developed 16 breeds of Japanese cypress which product little amount of pollen. They are going to be delivered to Tokyo and other prefectures as the original species to grow and to be improved in their tree-seed orchards and scion gardens. 112 species of less-pollen cedars have already been developed in Japan (except for Hokkaido). In addition to them, nine of new species have been developed to make the total 121.

April 15, 2007 National Forest in Kyushu Office has made a second price revision in accordance with the sales treaty of stable supply system in the fiscal 2006. Consequently, it has decided to raise the mountain prices of cedar logs by ¥500-800 per cubic meter from the shipment in March. In this treaty, the prices are to be reexamined with the partners basically in every quarter. This time, following the price revision in November last year, it made another big increase of prices due to a growing tendency in prices of all the domestic timber products and imported lumber and the reduction of processing costs. Cedar logs' price (straight and bent mixed) for Imari Timber Market Co., Ltd. used as lamina of laminated lumber has been revised to ¥8,600 per cubic meter, and the selling price of "straight and bent set" for Shin-Ei Plywood Manufacturing Co., Ltd., to ¥9,300.

March 31, 2007 Breed improvement of Myanmar teak Forest Tree Breeding Center concluded an agreement with Forest Bureau of the Myanmar Government to support breed improvement of teak which requires long time. This agreement is to be renewed every three years with view of long term cooperation. The center is going to help Forestry Bureau of the country make a long term plan and implement it.

March 31, 2007 Arrival port of Russian locally-sawn lumber has been shifted from Kawasaki Port to Tokyo Port. Ships used to unload this item at Kawasaki Port for a long time from the beginning of the import. However, "a major sawmill in Tokyo has shifted the landing port to Tokyo Port", commented by a person of The Tokyo Lumber Terminal, and handlings of Russian locally-sawn lumber have rapidly increased at the port. This port is equipped with many warehouses with roofs, where managements of stocks and storage and delivery of goods are speedily and precisely done by computers.

March 31, 2007 Shipped volume of domestic logs, 15% up against a year According to lumber statistics reported by the Ministry of Agriculture, Forestry and Fisheries, shipped volume of logs for lumber to factories has increased 2.8% from the same month last year to 1,618,000 cubic meters in January. While imported logs drastically decreased showing 20% down in Russian logs and 10% down in American logs, domestic logs which have been growing since august 2006 , marked a 15.9% of expansion. As the result, the percentage of domestic logs has increased 0.5 points from the previous month (December 2006 ) to 63%.

March 15, 2007 Forestry and Timber Division of Hokkaido Government announced that its total production of larch logs in the 2005 fiscal year decreased 2.5% from the previous year to 1,692,000 cubic meters and that of the lumber increased 2% to 512,100 cubic meters. Out of them, 5,400 cubic meters were used as construction materials. And production of Sakhalin Fir logs reportedly increased 15.7% against a year earlier to 860,300 cubic meters and that of the lumber also increased 8.4% to 281,500 cubic meters. Among them, 149,100 cubic meters were used for construction.

March 15, 2007 In "JAS standards for laminated lumber" which are revised every five years, the possibility has been increasing for the young modulus of cedar lamina as the material to be eased from "more than L50" to "more than L30". And it will allow the thickness of lamina as the material of laminated connective posts "up to six centimeters" from current "up to five centimeters", and will accept two-ply laminated connective posts as JAS products. Those two revisions will largely contribute to demand expansion of domestic cedar.

March 15, 2007 In Hokkaido, prices of timber products are increasing. "Prices for Russian logs were ¥5,700-5,800 per koku in December, but are ¥6,800-7,000 per koku in February. They are 48% higher than the same period of the previous year." (A lumber manufacturer) The manufacturers are planning to raise the prices of Russian lumber products by ¥2,000-3,000 per cubic meter in March. With the announcement of the export tax increase of Russian logs, the consumers' movement to buy domestic logs has become brisk. For example, "Plywood manufacturers in Honshu (Japan's main island) are looking at resources in Hokkaido."

February 28, 2007 Hokkaido Timber Import Association has published a report on the result of the prefecture's timber import for January-December 2006. According to it, total import of the year decreased largely (21.2%) from the previous year to 519,177 ·. The major reason for the drastic decrease is that Japan is losing Russian logs as the main force to active demanders of China and Korea. Imports of Russian logs, not only common materials but also pulp materials, are decreasing considerably.

February 28, 2007 Minister of Agriculture, Fishery and Forestries, Toshikatsu Matsuoka visited China on January 18 in order to talk about issues related to exports of agricultural products and held a summit meeting with head of China Forestry Industry Bureau in 19. Both leaders discussed generally about issues of forests and forestry between the two countries. At the meeting, Mr. Matsuoka requested China to utilize Japanese wood products in the country. And he also asked China to make active efforts and cooperation to restrictions against illegal logging as a measure for global environmental protection.

February 28, 2007 Tokyo Lumber Retailers' Association published standard prices of wood products of February. According to it, those of cypress posts, cedar posts, yellow cedar sills, pine LVL studs, cedar LVL studs, red pine rafters, Yezo spruce rafters etc. showed month-to-month increases. The association comments, "Especially, prices for Russian timber items and cypress sills are strong". As for plywood, though prices of softwood plywood are continuously increasing, the growth in lauan plywood has stopped. Owing to the stop, "Prices for softwood plywood have reached near to the ceiling".

February 15, 2007 Price hike of European wood products is unstoppably going on. According to a leading domestic wholesaler, a major European wood products supplier who is supplying the largest amount to Japan has offered ¥2,360 per piece of whitewood five-ply laminated connective posts shipped from February to April. The forward purchasing cost for studs has also gone over ¥56,000 per cubic meter. In domestic laminated lumber manufacturing factories, lamina stocks have been depleted. Therefore, distributors are complaining, "Laminated connective posts are preferentially supplied to major housing companies and large precut factories."

February 15, 2007 Chugoku Mokuzai Co., Ltd. (Kure, Hiroshima Prefecture) held a New Year's party of its Nagoya office at International Hotel Nagoya on January 6. President Horikawa gave an account of the situation of its Kashima factory, which can saw up to 1,800,000 · of Douglas fir logs into lumber per annum saying, "We will make a momentous step this year. Kashima factory is going to start its test operation this May." In full-scale operation, the factory's sawing capacity per month is 50,000 · in one shift or 150,000 · in three shifts, and its annual maximum production capacity is as big as 1,800,000 ·. This is the birth of a large sized Douglas fir factory having global competitive power including cost reduction at the distribution stage of logs and sawn products, and improved yield ratio materialized by the state-of-the-art sawing lines. Manufactured commodities are to be sold in the areas from its Nagoya office over the northeast region.

February 15, 2007 Housing Renovation Promoting Council has published a report on the estimated scale of the house renovation market in the 2005 fiscal year. According to it, the scale of the market has expanded ¥400,000 million from the research made in the previous year (¥6,000,000 million) to about ¥6,400,000 million. Since the 2003 fiscal year, scale of the housing renovation market has been showing a recovery trend with an upswing in total house completion by the building industry. Breakdown of house-type shows that the construction of single-family houses holds an overwhelming share of 84.4%, followed by common use space of built-for-sale condominiums (2.5%), private use space of the same (2.9%), rental condominiums (7.9%), and others of the same (2.4%).

January 31, 2007 National Forest in Kyushu Regional Office has drastically revised the prices of cedar logs in line with the agreement of a stable supply system made in the 2006 fiscal year, and raised the mountain price for cedar straight lumber including bent lumber toward Imari lamina factory by ¥600 per cubic meter to ¥7,800 with effect from November 2006.
According to the agreement, the prices should be verified and reexamined quarterly. This price revision was agreed among the members in view of the prices of domestic and imported wood products, which have been increasing since September.

January 31, 2007 Fancy Tuda (headquartered in Nagoya City) has become a fully owned subsidiary company of Nippon Paper Lumber Co., Ltd. (headquartered in Kita-ku, Tokyo) by selling all the issued stocks owned by its executive team. At an annual meeting of stockholders held in December 2006 , Mr. Nakai became president. At the beginning of a new regime, the company is going to change its name to "Nichimoku Fancy Material" in February 2007.

January 31, 2007 Director-General of Forestry Agency newly appointed As of January 5, the Ministry of Agriculture, Forestry and Fishery of Japan appointed deputy manager Mr. Kenji Tsuji (aged 57) as a successor to Mr. Hidesaburo Kawamura who had retired from his position of Director-General of the Forestry Agency in order to run in the gubernatorial election of Miyazaki Prefecture on December 26. In a New Year speech, Mr. Tsuji appealed his intention to make the agency active to the office staff saying, "Let's implement steadily the planned basic program for forestry, and get results."

January 15, 2007 Mitsui Bussan, to be 100% subsidiary of JK Holdings JK Holdings Co., Ltd. resolved in making Mitsui Bussan Forestry Co., Ltd. its 100% subsidiary company December 8 and concluded a stock swap contract. By cooperating with this subsidiary company, which deals with timber and wood products and is running environmental and greenery businesses, JK Holdings would like to strengthen timber-related business owned by companies under the umbrella of JK Group. This is based on JK Group's strategy which aims to put its timber-related business on a sound footing.

January 15, 2007 Demand forecast for building materials in January by MLIT, Lumber will increase for four months running According to a demand forecast for main building materials by Ministry of Land, Infrastructure, and Transport, demand for lumber in January 2007 will be better than the previous year for the fourth consecutive month showing a year-on-year growth rate of 2.9% to 950,000 cubic meters. This figure includes domestic manufacturers' lumber shipments for both building and other purposes, and also includes imported timber as the material for lumber.

January 15, 2007 Log House " Big Foot", to start its selling this March A major log house company R. C. Core (Tokyo) is going to start ready-built housing business of "Big Foot", which is an urban type of log house of the company, jointly with a real-estate developer Yamaman Co., Ltd. from March 2007. As the first project, they are planning to sell 15 lots in Sakura City in Chiba Prefecture. In this joint venture, Yamaman (the seller of the land) will act as the selling agent for R. C. Core (the seller of the houses). R. C. Core, that would like to develop same sort of business all over Japan, is looking for partners.