After taking a trip to China that included one-on-one meetings, seminars and tea aplenty, Larry Krueger pictured an expanding market for the lumber company he owns.
Krueger, owner and sales manager of Krueger Lumber Company in Valders, participated in the Wood Business Development Mission to China in the spring of 2013. Organized by the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) along with other organizations, the 10-day mission allowed companies such as Krueger Lumber to interact with potential customers in a country where the import of wood products is growing tremendously.
The trade mission, led by the DATCP’s International Trade Team, is just one of the tools being used by the department to help bolster the state’s timber industry both internationally and domestically. Krueger, for one, was impressed.
“The most beneficial thing for me was the hands-on, practical nature of our meetings,” Krueger says. “We spoke with companies, toured their facilities, and had meals and tea – plenty of tea – with them. The trip was very focused and very productive.”
Not long after returning from the trip, Krueger landed two new customers and was soon negotiating with a third. His company had already exported to China – as well as to Italy – but the trade mission put Krueger in touch with “literally dozens of potential new customers.”
“The trip allowed us to actually see and appreciate their needs, concerns, product usage and culture,” he says.
U.S. wood exports to China grew by 71 percent in 2012, and Wisconsin companies exported $18 million in timber products to the country. But much more can be accomplished, says Jennifer Lu, the DATCP economic development consultant who led the mission.
“In the last 10 years, China’s construction industry has boomed, and the state has not done enough to help wood companies to export there,” she says. “This mission benefited small companies and the ones in the rural areas of state. We would like to continue our efforts and help the smaller companies explore international markets, and this is one of the first initiatives.”
Wisconsin has 16 million acres of forest, with 54 percent privately owned, and the number of acres has increased by 640,000 since 1985.
Forestry is the state’s second-largest manufacturing industry, generating nearly $20 billion a year in shipments and another $15 billion indirectly. The industry employs 74,000 people at 1,292 wood product companies. Wisconsin has been the top paper-making state in the country for the past 50 years.
But like other industries, timber manufacturing has experienced economic challenges in recent years. Profitability for loggers has been a particular concern, according to Henry Schienebeck of the Great Lakes Timber Professionals Association.
“With the high cost of equipment and fuel, we’re just not seeing the profit margins that need to be there to keep the logging community complete and whole,” says Schienebeck, executive director of GLTPA, which represents forestry industry members from both Wisconsin and Michigan.
Steps are being taken to address the concerns, Schienebeck says, and he’s especially pleased the industry has caught the attention of decision makers in the state capital, Madison.
“It’s nice to have them engaged,” Schienebeck says. “They go out in the woods with us and see our operations. That’s really important, to have that group of legislators and others to come out and actually seeing what we’re doing.”