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Replies to post #3489 on The Rising Influence of Rising Affluence
11/06/11 12:17 PM
Gail Glazerman (UBS): …can you give a tiny bit more color on what you're seeing out in China? I mean, are the issues and the weakness that you're seeing now more reflective of just demand, or is it just kind of logjams throughout the supply chain at this point?
Rick Holley, CEO: …the building activity has been just unbelievable throughout China. And I think the government is trying to slow it down a bit for the next 2 years. But I think that—at least the numbers I saw and everyone I talked to—they think over the next 15 to 20 years, their GDP is going to be in excess of 7% and their needs for wood in particular because of the need for…affordable housing in the country is going to continue to grow.
And as you know, historically, most of the wood or at least a big piece of it came out of Russia and New Zealand. And clearly, getting more wood out of Russia is somewhat constrained due to infrastructure, and there's no more wood they can get out of New Zealand because they're kind of cutting at their highest levels. So as their needs grow, they have to come to North America. So I came away feeling very, very positive about the future prospects for continuing business relationship with the Chinese.
Gail Glazerman: But is it fair to say in 2012 given what you're seeing right now, it could be down?
Rick Holley: Yes, I think that construction activity in China over the next 2 years would be a little slower than it was the last 2 years but still going to be at pretty good levels.‹
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