Lumber and Wood Industry Japan Vs Netherlands

...

is the main product manufactured by the company. Different proportions and dimensions of lumber, that is used in structuring or construction of buildings is manufactured from the raw wooden logs. A standard size (length and breadth) and shape (square or rectangle) is produced out of the trunks of the trees or logs.

4.6) Strengths and Weakness

Strengths

• Healthy relationship and respectable understanding amongst all the partners,

• Best infrastructure to accommodate high production volume,

• Leading lumber manufacturers in the Canadian market,

• Revenue of the company has been growing steadily over years,

• Highly experienced staff in the industry.

• Respectable number of networks and connections with suppliers and distributers,

• High quality research and development team, and

• State of the art technology and advanced technology.

Weakness

• No control over supply chain,

• Suppliers and distributed are not trust worthy or loyal.

• No proper forestry information about flow of inventory, and

• A particular raw material or inventory, the plant has to be planted approximately 15 years prior.

5) MARKET UNDERSTANDING

We at Maker Lumber are aiming to enter two foreign markets for the first time in company history. This comes as a result of us being able to create a very substantial stake in our domestic market. The competitive nature of the Canadian lumber market makes us fully aware that market stake retention is very difficult, henceforth we will have to make our products more internationally available in order to ensure continuous cash flow and profitability for the sake of our investors.

Our choices of Japan and The Netherlands have brought us to seek out information relating to the Market environment. It is very important that we understand the market environment especially due to the fact that we will be conducting our operations on a business to business basis. Factors such as the political environment, legal Environment and economic environment are issues that will be discussed in this presentation.

5.1) The Political Environment

Japan

Japan’s constitution is quite similar to that of Great Britain, it firmly established a democracy in form of a constitutional monarchy which has an emperor as a diplomatic figure head. The emperor is the head of the country but he has no control over the governance of the nation. The prime minister of the country is the head of the nation’s executive branch. The Prime minister has to be an elected representative of the Diet; A system consisting of an upper house, The House of Councilors, and a lower house, The House of Representatives. It is the highest level of state power in the country, and the only section of government that can enact new laws.

At this current moment the political environment of Japan seems to be in a mode of growth. This is as a result of post 2008 financial meltdown recovery which has caused the country to pass through the leadership of 5 different prime ministers in the period of 8 years. The country seems to be happy with the current prime minister as his political prose has created investor confidence whenever he scores political points. Such has been noticed quite recently when his part won the upper house elections.

Netherlands

The political system of the Netherlands is very similar to that of Japan. Both have a Constitutional Monarchy and a parliamentary system which is governed by a prime minister. The difference is however that the Netherlands has a king while japan has an emperor. The political structure of the Netherlands is very stable as the system is built on a political structure that calls for inclusiveness due to the fact that the country is very culturally diverse.

5.2) Legal Environment

For Maker Lumber to operate in both countries we would incorporate locally. The incorporation in Netherlands would be a bit different as we would not only have to comply with Dutch law but also European Union laws.

The government of japan needs to enact tougher laws to tackle illegal lumber trade.

On the other hand, due to The Netherlands inclusion in the European Union, they have to comply to rules that are set out by the European Council. The European Union has strict rules that prohibits trade of illicitly harvested lumber. Our product is completely legitimate therefore we have no need to worry about this legislation. What this legislation does for us is eliminate competition from companies that trade illegally harvested timber.

In terms of taxation measures relating to lumber, Japanese taxation has been a bit discriminatory towards Canadian lumber but the newly signed trans pacific partnership agreement will make it more easy for Canadian lumber producers like Maker Lumber to supply the market.

In the past, quotas and tariffs for imported lumber existed in the Netherlands and the wider European Union. However today the nations have a free trade agreement which allows for free movement of products including lumber. The only thing that Maker would have to meet in order to enter the market is to ensure that we maintain a product that is suitable for importation in the European union.

5.3) The Economic Environment

Both countries continue to have highly sustainable and stable economies. The japanese economy and the Dutch economy are two of the most prosperous economies in the world. Both countries at this moment are experiencing negative inflation. This is a point that prices are remaining relatively stable.

Both countries also have relatively strong currencies. This is a positive sign as it is important that we trade with countries with stable currencies so as not to have to suffer losses due to exchange rate risk. The open market economies of both countries allows for ease of doing business and repatriation of profits.

5.4) Market Infrastructure

• Climate: In Amsterdam, the temperature varies from 0 to 21 degrees Celsius throughout the year. In Tokyo, it varies from 2 to 27 degrees Celsius.

...